If Technical Analysis doesn’t work, how do you define a bull market?

[Saigyou_123]

It is possible to use the terms "bull market" and "bear market" without belief in technical analysis. For instance,

(1) One may refer to a "bull market" as having taken place during the past three months in reference to the fact that most stocks have gone up. This usage of "bull market" does not involve a prediction as to whether stock prices will continue to go up the next day, the next hour or even the next minute.

(2) Conceivably, one may subscribe to a fundamental-analysis-only approach, in which, after analysing various economic data, one predicts that the market will largely go up or down within a specific period of time.​

That being said, point (1) above is not particularly meaningful except as a shorthand description of historical market activity. With regard to point (2), many people attempt to predict future market direction using fundamental-analysis-only approaches. Those, who believe in technical analysis, would point out that such fundamental-analysis-only approaches are often less-than-reliable in practice.

Based on Reminiscences of a Stock Operator, for a trader, the most important question to answer at any point in time is whether we are in a bull or bear market. Based on Al Brooks's book, the most important question to answer is whether today is a trend day or a non-trend day. These are in fact the same questions.

I would answer that technical analysis obviously works. Otherwise, how would one explain how Jesse Livermore correctly predicted two market crashes and profited from them each time?

 

[Overnight]

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I would answer that technical analysis obviously works. Otherwise, how would one explain how Jesse Livermore correctly predicted two market crashes and profited from them each time?

He was involved in market manipulation, was divorced twice (?), and killed his own hedge fund of some shit. Oh, and then put a bullet through his own head in 1940. Why is this guy the go-to for TA again, exactly? From 1940, to 2021, a period of 80 years. TA has worked flawlessly? Or is it that we just don't see it the way he did, during the WORLD WARS?

 

[Saigyou_123]

He was involved in market manipulation, was divorced twice (?), and killed his own hedge fund of some shit. Oh, and then put a bullet through his own head in 1940. Why is this guy the go-to for TA again, exactly? From 1940, to 2021, a period of 80 years. TA has worked flawlessly? Or is it that we just don't see it the way he did, during the WORLD WARS?

Based on Reminiscences of a Stock Operator, Jesse Livermore was not very much involved in market manipulation. If Jesse Livermore is to be believed, then what the public perceives as "market manipulation" is often no more than a natural consequence of large operators having to buy or sell in large blocks (and as a result having to time their purchases and sales strategically).

Jesse Livermore went broke four times. The book explains the reasons behind him going broke the first three times.

There is reason to believe that the last time was due to depression. His son committed suicide. His grandson also committed suicide. There is a fine line between genius and madness, after all.

......

Regarding so-called market manipulation, I would note that Jesse Livermore's explanation of how the market works matches up well with Al Brooks's explanation. Their views are quite different from Wyckoff (and his spiritual descendant Anna Coulling)'s views.

After consideration, I believe that Jesse Livermore and Al Brooks's explanations make more sense, although some may argue that strategically - particularly if one uses their systems - it may make sense to act as though Wyckoff and Coulling's explanations were correct.

 

[Overnight]

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Jesse Livermore went broke four times. The book explains the reasons behind him going broke the first three times...

Far as I know, if he was such a brilliant stock trader, his TA should have saved his ass from going broke the first two times. Then he goes broke a third time.

He could not handle the stresses and went nuts. So did TA truly work for him? We have lots of people in the interceding EIGHTY YEARS that have figured out how to use both TA, and other methods like FA to make money.

Why the hell is Jesse Livermore held in such high esteem? Because he wrote a book that showed how he failed four times in his life, and finally a fifth time when he blew his brains out?

"Reminisces of a "stock Operator"". The title itself makes no sense.

 

[Saigyou_123]

argue

Far as I know, if he was such a brilliant stock trader, his TA should have saved his ass from going broke the first two times. Then he goes broke a third time.

He could not handle the stresses and went nuts. So did TA truly work for him? We have lots of people in the interceding EIGHTY YEARS that have figured out how to use both TA, and other methods like FA to make money.

Why the hell is Jesse Livermore held in such high esteem? Because he wrote a book that showed how he failed four times in his life, and finally a fifth time when he blew his brains out?

"Reminisces of a "stock Operator"". The title itself makes no sense.

With even one of Livermore’s big wins, many traders can retire for life.

I believe that part of the problem came from position sizing. If he traded like most traders today using the 2% risk-management rule, he would never have gone broke. He would not have won the amounts he won either, however.

 

[oraclewizard77]

Far as I know, if he was such a brilliant stock trader, his TA should have saved his ass from going broke the first two times. Then he goes broke a third time.

He could not handle the stresses and went nuts. So did TA truly work for him? We have lots of people in the interceding EIGHTY YEARS that have figured out how to use both TA, and other methods like FA to make money.

Why the hell is Jesse Livermore held in such high esteem? Because he wrote a book that showed how he failed four times in his life, and finally a fifth time when he blew his brains out?

"Reminisces of a "stock Operator"". The title itself makes no sense.

When price fucks with you:

 

[volpri]

Far as I know, if he was such a brilliant stock trader, his TA should have saved his ass from going broke the first two times. Then he goes broke a third time.

He could not handle the stresses and went nuts. So did TA truly work for him? We have lots of people in the interceding EIGHTY YEARS that have figured out how to use both TA, and other methods like FA to make money.

Why the hell is Jesse Livermore held in such high esteem? Because he wrote a book that showed how he failed four times in his life, and finally a fifth time when he blew his brains out?

"Reminisces of a "stock Operator"". The title itself makes no sense.

People love a hero. Someone they can relate and aspire to become. Jesse was raised DIRT POOR farming land filled with rocks. He determined to get out of that life at a young age. He did so GOT OUT …CHANGED HIS LIFE and started in the markets from a HUMBLE position writing prices on the board. He observed price action as he did so, making notes of it. HE TAUGHT HIMSELF.

He became FEARED in the bucket shops and denied entry time after time.

He had to start over outside the bucket shops. Again teaching himself. He had PERSISTENCE.

His is an inspiring story from ashes to riches. Unfortunately he was lacking in taking his losses when he needed to. This was his downfall. His lack risk management was undergirded by his belief in “sitting tight”. Waiting for the “big” move. He did much better when he was scalping the bucket shops, and over time, could have seen his capital grow had he not been prohibited to trade in them. Instead (because of being forced or likely feeling forced to by circumstances) he got on the bandwagon of “the big ride” the “large move”. He got a taste of big money. In the end his beliefs became his undoing.

But he was driven and passionate about trading. Two things aspiring traders likely have, to some degree or the other.

 

[SimpleMeLike]

Far as I know, if he was such a brilliant stock trader, his TA should have saved his ass from going broke the first two times. Then he goes broke a third time.

He could not handle the stresses and went nuts. So did TA truly work for him? We have lots of people in the interceding EIGHTY YEARS that have figured out how to use both TA, and other methods like FA to make money.

Why the hell is Jesse Livermore held in such high esteem? Because he wrote a book that showed how he failed four times in his life, and finally a fifth time when he blew his brains out?

"Reminisces of a "stock Operator"". The title itself makes no sense.

Hello Overnight,

I agree with you. Not sure why anyone even waste time reading books on trading. Jesse Livermore is weak and crappy trader who loss all of his money and killed himself. LOL HAHAHHA I do not want to read a book from a trader like this.

I never read a trading book. Seems like a waste of time.