Who is the Greatest Trader of all time?

Yes it's a very brief book with about four chapters that he wrote, and another few that were added by a later author. Three main points are

1. risk management

2. the pivot

3. when a stock is acting right (going up, of course)

Follow on topics are follow the leaders, don't take tips, the danger signal (and we saw one about a week ago, warning the end of the trend was likely), and some memorable trades (good and bad).

The other book written about him has a lot of insights too, but I didn't get as much out of it.

I'm pretty sure at least one famous trend following guru was inspired by Livermore. :)
 
Wide Tailz said:
Livermore actually wrote a book that was very helpful for me. He wrote it in the 40s and the concepts still work. And yes I made money followng his advice, but I lost it later being careless and not obeying the trend of the market. Kept trying to buy the dip after the party was over. :(
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Well Livermore was a bottom fisher and a contrarian so it's not surprising that his method would not work in a trending market.
 
Wide Tailz said:
Yes it's a very brief book with about four chapters that he wrote, and another few that were added by a later author. Three main points are

1. risk management
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I am not sure Livermore and risk management went well together.

Although he talks at length about cutting losses short and scaling into positions. I always got the impression he liked trading way too big. And this was the cause of his blowups as well as his massive profits.

He studied price action and could time entries well, but he liked to bet really big, probably because he didn't care about the money. The 'Boy Plunger' nickname was very apt.

That is the big difference i noticed between his two books which were written in the 1920's and 1930's, and Market Wizards written 60 years later. Traders in Market Wizards really emphasised the importance of risk and money management.

Still Livermore got to enjoy the big profits that came from his plunging: the mansions and playboy lifestyle. But the blowups didn't help his depression.
 
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Maybe the question should be who is the greatest known trader of all time?

I'm wondering if there are some private individuals who's done even better, but whose results are not known to the public.

In Norway, there was a former electricity broker who started out on his own with 200K NOK (18K USD today) and built that all the way to 1.1 billion NOK trading mostly electricity futures - before he went on to lose it ALL and then some on one single bet. Quite the story. Of course, considering how he lost it all on one trade it goes without saying that he probably took massive risks in order to build his fortune. For years end he was the top contributor of taxes for individuals in Norway as those lists are publicly known here.

Einar Aas confirmed as source of Nasdaq default fund loss | Montel (montelnews.com)

The Japanese trader CIS who's been mentioned a few times on these boards also seems to have accumulated some amazing returns.

Meet CIS, Japan’s market-moving enigma who can make millions of yen in his pajamas - The Washington Post
 
Pekelo said:
Yes he is a good mention specially that he still has the money. The Norwegian guy, not so much. That one looks like he just had the good strategy and leverage for certain times, and didn't notice when tides turned.
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About the Norwegian guy, my hunch is that he would average down to infinity and win 90 % of the time until one day it didn't work. The same as any high win rate strategy where your initial risk is large. Eventually it blows out if you don't scale down.

EDIT: Very little is known about his strategy as he's known to never talk with the press. The only thing we know is that his colleagues spoke very highly of him a being a skilled broker/trader.
 
Overnight said:
Isn't that the guy from 110 years ago, before the central bank existed?

The hell you think he is God's gift to trading?!?

Have you made any money following his advice?
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Yes, he is from a hundred years ago. Thread didn't specify we need contemporaries. :)

Yes, he is mentioned the most by HF managers

Yes, I have made money following his advice. And this was not a requirement for listing him here, so WTF are you talking about? Anyway, for education purposes his pivot points are basically double tops/bottoms. He talked about waiting for a second one. And that was 80-100 years ago, something just never changes.

So first read the thread title, second educate yourself about the greatest trader. His book is an easy read.

Edit: 2 quotes from his wiki page:

- " Some observers have regarded Livermore as the greatest trader who ever lived, "

- "At one time, Livermore was one of the richest people in the world; "

I think we can close the thread. :)
 
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Pekelo said:
Yes he is a good mention specially that he still has the money. The Norwegian guy, not so much. That one looks like he just had the good strategy and leverage for certain times, and didn't notice when tides turned.
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Hello Pekelo,

Yes, over using that leverage is always higher risk and cost.
 
Pekelo said:
Yes, he is from a hundred years ago. Thread didn't specify we need contemporaries. :)

Yes, he is mentioned the most by HF managers

Yes, I have made money following his advice. And this was not a requirement for listing him here, so WTF are you talking about? Anyway, for education purposes his pivot points are basically double tops/bottoms. He talked about waiting for a second one. And that was 80-100 years ago, something just never changes.

So first read the thread title, second educate yourself about the greatest trader. His book is an easy read.

Edit: 2 quotes from his wiki page:

- " Some observers have regarded Livermore as the greatest trader who ever lived, "

- "At one time, Livermore was one of the richest people in the world; "

I think we can close the thread. :)
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Good Morning Pekelo,

Question please:

Do you know where Livermore initially received his trading capital from?
 
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