in his wonderful book Wall Street Ventures and Adventures. He devotes almost a chapter about Livermore. The book is not available at amazon.com, but at traderpress:
http://www.traderspress.org/detail.asp?product_id=174
On page 254 from this booK:
Livermore says to Wycokff in 1910:
I wait until conditions prove that I am right or until my intuition tells me I am wrong. Very often I'm wrong. When that happens I change my position by getting out altogether or sometimes I reverse and take the other side of the market. My judgement gets me in, but my intuition gets me out....
I never go into a trade unless I see at least ten points profit...
ON page 256, Livermore says to Wycokff:
I make it a practice to locate the danger point and then buy or sell as close to it as I can. If the danger materializes, I take my loss and close the trade, especially when I am short....
It's great book. Wyckoff writes it like a diary year by year from 1888 to 1928. I think he died in 1935 or so.
On page 170 , about tape reader:
Such a trader might be long of a stock one moment, then neutral, then short. Often (tape reader) he would be out of the market for hours or days, watching every possible turn, detecting what appeared to be opportunities, only to see them fade out, but taking....
This ideal tape operator should have no hopes or fears. He must play the game without sign or nerves or mental strain; look upon profits or loses with equal equanimity. He must develop the kind of intuition that becomes a sixth sense in trading...
Such an operator... was generally evolved from a series of failures over many months or years; his education could be completed only through a long series of transactions, spread over long periods, which would perfect his operating personality into one that could play the game cold. He must have persistence to carry him through adverse times without discouragement, until his expertness and self-confidence match that of the surgeon who performs many operations, losing some patient but never losing his nerve. Such a man, with such a character and with that experience, should be a success at reading the tape....
On page 171 and 172:
In many offices, active traders, more or less expert, scanned every transaction that appeared the tape, evidently trying to scent out coming moves. They ignored statistics or earnings or such information, but they had great respect for previous swings, high and low prices, and other technical indications.
Many of these traders siting on high stools by the tickers had no other vocation; they devoted their entire time to this business of trading in stocks. as they become more expert, they seemed to operate a good deal on intuition...
They were among the best of my clients because they were always trading. They made far more money out of the market than the average customer....
END of the writings from that great book.
Hope, you enjoyed reading this post.
