Jesse Livermore - Market Key
- Thread starter pjones2012
- Start date
I do not know the percentage of capital Jesse Livermore allocates to an individual trade. A 10 % stop loss policy is convenient for my modeling studies because both fluctuation parameter and reversal parameter can be 10 % under some circumstances. All three parameters can be treated as one parameter.
If I make some assumptions and use the percentage idea that we discussed above then I can write a computer program that simulates Jesse Livermore's Market Key method.
My assumptions are:
1) Buy if price values increase X %. (X is the fluctuation parameter)
2) Sell if price values decrease X %.
The other day I came across a simulation that showed that 15% would be the best percentage long term.
(Unfort. I don't recall where it was).
Might be worth a try.
If I make some assumptions and use the percentage idea that we discussed above then I can write a computer program that simulates Jesse Livermore's Market Key method.
My assumptions are:
1) Buy if price values increase X %. (X is the fluctuation parameter)
2) Sell if price values decrease X %.
The other day I came across a simulation that showed that 15% would be the best percentage long term.
(Unfort. I don't recall where it was).
Might be worth a try.
=================Quote from Compulsive:
Here we go agaiin...LIVERMORE the great trader
....divorced three times. bankrupt 4 times and "dies" (sounds better than suicide) flat broke.....sounds like a winer to me
Com-pulse;
great points, he was a top trader, thanks. Jack Schwager couldnt interview him.Time & space restrictions,LOLRecommended his book.......................................................................................
Lousy/emotional ruled business man to go bankrupt/broke 4 times;
but some of that ,may be due to stubborn creditors &
him breking his rule of ''getting rich quick/improper position size'';
which most of us made that mistake @ least once................
Also just did another speed read on him, Wall Steeet Wisdom by Samson Coslow,apparently Samson is his real name.
Also disagree with something Samson wrote about him;
''people hate bears & still do'' Nope, people hate oil bulls that are arrogant enough to grind the faces of the poor. Actually you average Joe may be long in his IRA, word to the wise;
but admire the oil bears,Gosdspeed to the gas / oil bears.LOL
And despite his nickname''boy plunger'';Jesee made more on bull market side than bear trades/investing.
And a bit more contraversial than last post , so separate;
he quit grammer school to trade. Somewhat of a common pattern;
Bill Gates, Richard Dennis,Joe Girard, quit school..................
Actually Joe Girard was ''thrown out of high school,''LOL
he quit grammer school to trade. Somewhat of a common pattern;
Bill Gates, Richard Dennis,Joe Girard, quit school..................
Actually Joe Girard was ''thrown out of high school,''LOL
i am sure someone has already mentioned it, but livermore wrote a book after he went destitute for the last time (b4 the suicide) that details everything about his market key... here it is on amazon:
http://tinyurl.com/67h7gm
http://tinyurl.com/67h7gm
The other day I came across a simulation that showed that 15% would be the best percentage long term.
(Unfort. I don't recall where it was).
Might be worth a try. [/B][/QUOTE]
Here it is:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=147576&perpage=6&pagenumber=9
(Unfort. I don't recall where it was).
Might be worth a try. [/B][/QUOTE]
Here it is:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=147576&perpage=6&pagenumber=9
Even traders need "heroes"...
I find Livermore fascinating and illuminating to read. He was the quintessential trader. It boils my blood that all these "nobodys" on ET would put him down. First off, it is not easy to come back once time in your lifetime but what this man did was above most mortals. It takes tremendous courage and determination to stage a comeback as many times as Livermore did. I do not condone suicide but it is a personal choice. Those morons who say "who he dies with most toys, win" forget the idea that there is nothing noble leaving much behind after you die. You are dead, after all. Divorce? Fools again say this is a bad thing, when today's world it is commonplace act. The sanctimonious fuckheads who like to put other people (especially dead people) down, need a large mirror to look into every single day.
I find Livermore fascinating and illuminating to read. He was the quintessential trader. It boils my blood that all these "nobodys" on ET would put him down. First off, it is not easy to come back once time in your lifetime but what this man did was above most mortals. It takes tremendous courage and determination to stage a comeback as many times as Livermore did. I do not condone suicide but it is a personal choice. Those morons who say "who he dies with most toys, win" forget the idea that there is nothing noble leaving much behind after you die. You are dead, after all. Divorce? Fools again say this is a bad thing, when today's world it is commonplace act. The sanctimonious fuckheads who like to put other people (especially dead people) down, need a large mirror to look into every single day.
What fascinated me are individuals like andrasnm that truly believes that a mans success is based on material items, such as money. Livermore just like any other HEAVY gambler had their massive ups and massive downs and NEVER control of their destiny. They think they do, they get a high on winning and a higher high of losing and trying to get it back. Buy hey I could be wrong about andrasnm, maybe he has true value in life
Compulsive,
I have never said that. I like livermore because throughout his life he demonstrated a strong will and character! Not his achievment in terms of money. He knew how to spend and live as well....
He always paid back his debts even when it was not required of him. That is rare too.
I have never said that. I like livermore because throughout his life he demonstrated a strong will and character! Not his achievment in terms of money. He knew how to spend and live as well....
He always paid back his debts even when it was not required of him. That is rare too.
Quote from Compulsive:
What fascinated me are individuals like andrasnm that truly believes that a mans success is based on material items, such as money. Livermore just like any other HEAVY gambler had their massive ups and massive downs and NEVER control of their destiny. They think they do, they get a high on winning and a higher high of losing and trying to get it back. Buy hey I could be wrong about andrasnm, maybe he has true value in life
It seems that Livermore made his biggest $$ during high market volatility and sharp trends. His ideas about "scaling up" as trades moved in his favor would have been extremely advantagious during such periods, as he would have been applying maximum leverage during those times when the market was moving sharply in his favor. This style allowed Livermore to amass several fortunes...and in all likelihood, also caused his accounts to get hit pretty hard during choppy market conditions.
HooknSinker, I doubt that Livermore applied such a rigorous statistical analysis to the actual long-term benefit of "scaling up", I think it just fit his style of going all in when he felt sure he was right.
Had Livermore used some more conservative capital management techniques, likely we wouldn't remember him at all and the debate between "great trader" and "compulsive gambler" would never have arisen. Personally, I'm still on the fence. I do think Livermore was a gifted "day trader" as he proved in the "bucket shops" where he could get "instant" fills. Moving up to the exchanges where he suddenly had to deal with slippage, Livermore necessarily moved to a swing-trading style. Excessive use of leverage on overnight positions led to his amassing and losing several fortunes.
I think the moral of the story is that overuse of leverage will catch up to even the best of traders.
HooknSinker, I doubt that Livermore applied such a rigorous statistical analysis to the actual long-term benefit of "scaling up", I think it just fit his style of going all in when he felt sure he was right.
Had Livermore used some more conservative capital management techniques, likely we wouldn't remember him at all and the debate between "great trader" and "compulsive gambler" would never have arisen. Personally, I'm still on the fence. I do think Livermore was a gifted "day trader" as he proved in the "bucket shops" where he could get "instant" fills. Moving up to the exchanges where he suddenly had to deal with slippage, Livermore necessarily moved to a swing-trading style. Excessive use of leverage on overnight positions led to his amassing and losing several fortunes.
I think the moral of the story is that overuse of leverage will catch up to even the best of traders.