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zdo

Beyond Livermore

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Beyond Livermore

 

Distilled, purified, simplified -‘Beyond Livermore’ = ‘keep what you take’

By

1. Finding a way NOT to break your own rules.

 

 

 

 

 

 

 

 

 

ps hopefully the 'Beyond' tag will have mitsubishi's blessings. Let us know if you don't think it's appropriate and we'll change the title " and everything"

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I just skimmed a book BobC recommended …

The Inner Voice of Trading by Michael Martin

thx BobC

 

My first comment about the book“… somebody’s been reading my mail”

 

…and that reminds me of an old song about beating the devil – I don't know that it has much to do with the topic at hand but - for free associa's sake, it even has the “reading my mail” phrase in it (and everything ;) )

[ame=http://www.youtube.com/watch?v=faF0wOsVucw]Kris Kristofferson ? To Beat the Devil (1970) - YouTube[/ame]

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:)

Subscribed.

I just downloaded the book.In the introduction it mentions the 80/20 rule..as in 80% in your head.

 

I think I've finally accepted that no amount of theory/backtesting/tehnical stuff etc will silence the voice that is constantly in my head insisting that I do the wrong thing.And boy is that voice a needy character:weak,fearful, pessimistic..sometimes I think he's a demon but I call him Mr Pink and I visualize him as a childrens TV show puppet.That way it's easier not to take him seriously.

 

But there's actually 3 of us here,because I became fed up dealing with Mr Pink,he really was taking up waaay too much of my time and screwing things up.So I invented another character- the voice of reason,Mr Sensible,but I call him Mr Blue.And he is there to deal with Mr Pink so I am free to attend to the things I need to do without so much distraction.

 

This seems to work ok,but I never assume that Mr Pink will give up and go away.At one time I thought he would quit,but he knows he only has to wait for a weak moment to start causing mischief,and the game is never over unless I quit trading and go do something else.And that is not gonna happen.Which means that Mr blue occasionally has to go on refresher programmes and motivational seminars- so I will read this book and follow this thread with interest.;)

 

‘keep what you take’

By

 

2- ignoring Mr Pink

 

Mr. Pink represents all things that are not real. Any compromise between Mr. Pink and Mr. Blue is a profit for Mr. Pink. Phuck Mr. Pink.

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is mr pink a lesbian trapped in a… ? :confused::)

 

 

 

 

 

 

 

Lü Dongbin - Wikipedia, the free encyclopedia

 

 

 

 

 

 

 

 

Besides the ‘trading exploits in the head’ parallels, imo it is helpful to look at Jesse in some other, but irrevocably linked to going Beyond ( as in keeping your take) , areas of our lives. It is not meaningless to look at and compare one’s relationships with the other ‘sex’ ( the feminine in most our cases herein…etc.)

 

His trading talents and distinctive trading perceptual and choice acumen (neural net development and 'wiring', etc), his chronic depressive fluid net states, his relationships, etc etc. are all inextricably linked...esp. to 'keeping the take'...

Edited by zdo

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If JL had made such a deal,a compromise,then it may not have been necessary to blow his brains out...maybe.

 

may be ... but

(even though I linked things ‘inextricably’ dynamically, I did not make a strong link in his experiences of ‘his story’, etc. ie)

I doubt his experiences of trading triggered the ‘necessity’ to blow his own brains out. More likely they prevented it, diminished the ideations of suicide… for many, many years.

 

 

 

 

 

 

 

 

Here's a thank you note

[ame=http://www.youtube.com/watch?v=tdVAqxNLXiw]Yellow - Coldplay - YouTube[/ame]

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(In this crazy tl world, I don’t know if it should be said that it should be noted or not - but erring on the side of caution...)

 

It should be noted – we are NOT discussing ‘drawdowns’ in this thread.

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Mits, these inner colored people (and no, not being racist :) )… these ‘figures’

how much are they literal? with 'dialogue', etc

how much are they figurative? illustrative of tendencies, oscillating tensions, etc.

Thanks.

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Indeed.....how?

 

The message you've entered is too short.Please enter more characters....

 

Ok,ladies and gentlemen (and idiots),please give a warm welcome to.... Mr Mantra.

 

:applaud::cinema:

 

Thank you.Today i'd like to talk about what i'm always talking about....

 

I will rephrase my statement and replace not real with irrational. Mr. Pink represents all your irrational thoughts.

 

He sabotages your trade plan.

 

This is not to say that I do not have a version of Mr. Pink, nor to say that I am a level headed trader. I am euphoric when I have a wining trade, and pissed off when I have a loser. There is no point in attempting to suppress those feelings when they occur quite naturally in me.I completely think my next trade will be a loser after I have a losing trade. Why wouldn't I think that? However, my euphoria or anger have little to do with whether or not I will take the next trade.

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That's a very good question Bob.thanks,i really had to think about that for quite a while

What you suggest would seem very logical.But i'm just not sure things are that simple.

If a discretionary decision is made that turns out to be a great call,then Mr Blue will claim the credit since he assumes he always does the right thing regardless of how things turn out.And he believes that there is an X factor to trading that comes with experience.Blue believes there must be a payoff for the 1000's of hours of screen time beyond doing things by the numbers.

Whereas if a discretionary decision is made that turns out to be incorrect Mr Pink will get the blame.

So that hypothesis suggests that they are both capable and willing to make discretionary decisions.

Perhaps Pink feels we could be 100% discretionary and Blue knows(?) we can't.

 

Hi Mitsubishi

So Pink and Blue are interchangable?

We can be wrong both ways.

bobc

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...

So I do think that "interchangeable" is a factor.And I also think that it's not a simple case of Blue=good guy,Pink= bad guy.

.

So how would mrpink and mrblue blow up an account?

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Finally, Now I know behind Mr. Jesse Livemore is Mitsubishi!!! Ha Ha Ha.

 

“Jesse Livermore, the legendary "Boy Plunger" and "Great Bear of Wall Street" in his office in 1929 just after the "Crash"--when he went short the market and made over 100 million dollars. His powers were at their highest. His life slid downhill from here--ten years later he would kill himself. “

 

Why he can do it right in trading, but he can not do it right in life? Is he a successful trader?

 

Honestly it's quite different experiences what I learned from Market, market teaches me to embrace simple life happily since every successful trades always comes with thankfulness, and mindset do thing righteously in time.

 

“Livemore sometimes did not follow his own rules strictly.”

 

In trading, probably you can only control your own rules, but the rules will start to change once it starts to interact with others which is not controlled by you. So is there any rule become the truth? Even there is rules, there is always a parameter that you can not control, I bet you can not sustain the lost of 62% like Mr. Buffett, am I right? Cheers.

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Mits....as I know you like simplicity....

Maybe Mr Pink is simply impulsive and acts purely on the latest thought.

Mr Blue is able to stop and think beyond a few steps.

 

From Mr Livermores point of view.....Mr Pink sounds like he ran roughshod over Mr Blue in the final decision of his life...but that it was likely Mr Pink that both allowed him the ability to be able to amass the fortune and the skills to loose it.

 

We all have Mr Pinks and Blues....often they mix and become Mr Lilac, but hey where is the fun in being Mr Lilac.....

 

The best Mr Blue is one who is really in control BUT also knows when to let Mr Pink on and off the leash.....some people need an external Mr Pink or a Mr Blue.

 

.............

given the current house renovations.....colour choices are topical at the moment. We are going all white!

 

(for those interested - research Phillip Matthews hedge fund manager....he does not mind letting Mr Pink work for him in trading)

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One stop I have is called the momentum stop.If the market makes a quick move against me that is relatively large within recent context then that is a good sign that I have read it wrong.If it moves slowly towards my stop,then I have more time to evaluate the situation.

 

 

Hi, Mitsubishi, It's a real good learning from your wisdom. I think it is very useful! Here is the way I used, I was using the Art of War to deal with it. I sent scout to verify the situation to see whether the market is really very strong against me or if it's a trap, in particular after I made a significant profit from market. On the other hand, I always kept this in my mind, “ A clever general, therefore, avoids an army when its spirit is keen, but attacks it when it is sluggish and inclined to return. This is the art of studying moods.” Chap 7, Art of War. Cheers.

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“Livemore sometimes did not follow his own rules strictly.”

 

If Mr. Benjamin Graham did not follow Mr. Buffett's rules, he just made less money as he expected. If Mr. Buffett did not follow Mr. Benjamin Graham's rules, result is then he becomes the greatest investor. It looks like more preplex that Mr. Livermore did not follow his own rules and resulted in failure then suicide for he had been a great trader. Are there some impacts from trading affect the attitude of our life or the attitude of life impact the ways of our trading? I may be wrong, but I rather have peace and righteous trading than speculation with uncertain risks. Cheers.

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...

Rule 4 zdo should decide which zdo imposed thread rules he's going to stick to...

 

(In this crazy tl world, I don’t know if it should be said that it should be noted or not - but erring on the side of caution...)

 

It should be noted – we are NOT discussing ‘drawdowns’ in this thread.

 

...a little unfair of me to bring that up maybe..;)

 

 

 

mits, in the 'we're not discussing drawdowns' post the intention was to keep us on topic. Beyond Livermore is not about drawdowns. Beyond Livermore is about blowups - even if they are 'slow' ones. Drawdowns are normal system bound series of losses that have little to do with the mistakes of the misters. Livermore took huge returns then blew them up instead of 'keeping' them. Simply being a good consisten trader, even taking large returns is not beyond livermore. Beyond Livermore is about taking large returns and then keeping them.

 

...and 'how mrblue and mrpink are involved in blowups' was a sincere question about your insights how these two 'voices' would be involved in blowups... more Beyond Livermore

 

...

At this point you'd think a professional would turn up here........:roll eyes:

professionals tend to require a certain level of deferment, obsequiousness ... fat chance of them getting their requisite levels of that in here...:rofl:

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Some more random and hurried thoughts…

 

 

"From Mr Livermores point of view.....Mr Pink sounds like he ran roughshod over Mr Blue in the final decision of his life..." Suiya,

I continue to think we would get more traction giving less emphasis to the suicide part of the story… and more to his early blowups…

….

 

How you trade, what you trade, and the frequency

of the trades you make all come down to who you are

as a person, not what you know about a specific financial

instrument. That’s the gaping hole in the training of

traders.

 

 

People are drawn to the vehicles

that will give them the emotional

return they seek, whether they’re

aware of it or not.

From The Inner Voice of Trading Michael Martin

 

Mits, these ‘colored voices’ are a hit with about 1 in 5… Cover Story: Maira Kalman's 'Blue Dog' : The New Yorker

the rest of us will have some trouble relating… and I’m wondering if Suiya’s simplification

"Maybe Mr Pink is simply impulsive and acts purely on the latest thought.

Mr Blue is able to stop and think beyond a few steps."

is it … or enough… or how it related to Jesse’s tape reading acumen, etc. ????

(note i'm not discounting the 'voices' - just trying to relate them to beyond jesse...)

more from The Inner Voice of Trading Michael Martin

...For traders who

lack harmony

between

technique and

self-awareness,

the voice they

hear comes

from the most

antagonistic

person in their

life.

 

...

When a trader

lacks emotional

intelligence and

has no inner

voice to listen to,

he is more of a

philanthropist

than a trader.

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Zdo - if you want to talk about inner voices then ignore suicide you are not going far beyond. It seems an integral part of his story, and would be for many who suicide (I would surmise from what little I know of this)

I do agree with you that if you want the thread to focus more on his blowups then you might want to focus on technical aspects of why he did......not sure how you could ignore his mindset/voices though in order to do this.

I also agree as for other suicides - think Kodak Eastman.....successful, never blew up....

 

.......................

As for simplifying - thats just me. My wife likes to complicate and create dramas, I like to simplify and avoid them, and as for anyone else they probably best work that out for them selves. (I have also been accused of not seeing the world in the same way as others)

 

What are you really trying to get beyond Livermore?

 

Focusing only on the blowups...

 

If he was self destructive then he might be deliberately seeking the pity from losing, he might simply be be a part of the active v passive argument and that everyone reverts. Hell these days he might be ADHD, manic, bipolar, depressive or simply a chronic gambler.

He also might have excelled in particular markets - a one trick pony, but could not really know when to fold in other marketrs.

As I understand it the story JL never reveals enough info as to explain the blowups

 

If it applies to us....well first to have the relevant blowups you have to make the money - this applies to so few as most never make it.

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Zdo - if you want to talk about inner voices then ignore suicide you are not going far beyond.

 

not ignoring suicide at all… check the early posts in the thread… it’s all connected.

 

However, the only Beyond that is salient to us is NOT bluing up…

for one, most of us herein do not have the seeds of suicide sprouting.

for two, we may be folding “suicide” this and “suicide” that in here in every other dam post… meanwhilebackthen, his trading may have actually intervened in 'suiciding' for many many years or just as likely (and unknown (at least to me)) he may have run into life issues that triggered the previously dormant ‘suicidals’ only ‘shortly’ before he did it.

How the hel is anyone going to really focus on his early blowups – where some important lessons are - if we keep elevating the suicide later in life up to the dominant thang… and fuss everytime someone suggests let’s step away from suicide for now… ?

 

 

If it applies to us....well first to have the relevant blowups you have to make the money - this applies to so few as most never make it.

Yes. All true. And you're here to discourage us from even discussing it... ??

 

I don't want to stifle where the color misters might go esp in relation to "his [JL's] mindset/voices" ... mits is the real deal...

but I would like to get into the big picture stuff at some point.. like how Dr. Lewis Lipsitz explains in his article of the same name that “Aging is a Process of Complexity Loss” (Complex Systems Science in Biomedicine; Topics in Biomedical Engineering, 2006, Part III, Section 7, 641-654). Lipsitz continues that, our nervous system

craves complexity, and therefore, lacking complex challenges, aging accelerates. The

corollary is also true, that complexity slows, halts and reverses the accelerated aging

process, for our brains evolved to thrive by developing and refining complex and adapted

movement.

etc etc 'aging' being just one label... that's not exactly spot on for NOT blowing up and thriving in trading... still... to everything turn turn turn

 

... but sht, we can't get into that cause we're immersed in his eventual suicide. and can't allow that dam suicide to drop down even a single notch in importance.. ;)

 

The other day I was chiding my programmer and I quipped “this is the kind of sht that makes me want to put a gun to my head” … he came back “this is the kind of sht that makes me want to put a gun to your head too”

 

;)

Edited by zdo

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Dear Mr. Jesse Livermore,

 

Thanks to you to teach me how to cut unfruit(or few fruits) branches in trading........and patient! You have a great day!

 

and math. It's a great gift. Thanks.

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Yes. All true. And you're here to discourage us from even discussing it... ??

..............

 

Not at all, but i do think that if you dont define what you are trying to get to then its open slather. Hard to ask to shy away from something that everyone seems to refer to the one hand, but then want to discuss something that most dont have any experience to on the other. But I get your point....often following open discussions and what the point is, if there is any can be either interesting or completely way way off what was originally intended.

 

Lipsitz continues that, our nervous system

craves complexity, and therefore, lacking complex challenges, aging accelerates. The

corollary is also true, that complexity slows, halts and reverses the accelerated aging

process, for our brains evolved to thrive by developing and refining complex and adapted

movement.

 

This is interesting, while i have not read this it seems the same as something else i have read about the key keeping a healthy brain is giving it new complex things to learn. eg; learn a language, new concepts, music etc;;;; not just do the crossword or sudoku when you get older. It also relates to the ides Taleb (Antifragile) talks about that lots of little stresses to the muscles are a good way to make them stronger which also has a medical base. Not sure how it relates to blowups, unless you think of it in terms of JL keeping it together somehow with some complex and ever more complex rituals until eventually his system blows up.

In which case there may have been a flaw in his ultimate system of wealth generation in the first place? as opposed to a mental characteristic of desire that causes the blowup.

eg; the rattling old spaceship built to go fast, and it does but its also designed to burn up rather than return.

 

...............................

Love it....as I know you just went through the building process, and we are renovating here, can I substitute builder here and reverse the roles....

 

The other day I was chiding my programmer and I quipped “this is the kind of sht that makes me want to put a gun to my head” … he came back “this is the kind of sht that makes me want to put a gun to your head too”

 

;)

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