The Legendary Trader, Jesse Livermore

Jesse Livermore was an legendary trader of stocks and commodities during the early 20th century. At the height of his fame, he earned more than USD 100 Million. He earned and lost millions of Dollars in his career.

At the young age, he left his house to work in bucket shops. Bucket shops are nothing but gambling house and their bets are based on the actual movement of stocks in New York Stock Exchange. Soon he mastered that game and started betting real money on stocks and earned windfall profits. This led to the banning of him from most of bucket shops. He earned more than what he gave to them.

One fine morning he moved to New York to try his luck. His experiences in the bucket shop had helped in making a good fortune in 1909 and 1929 crashes. Most of the time he played the Bear. He was known at that as a big Bear in the stock Market circles.

His famous strategy was to add further positions in winning trades and cutting the losses quickly. Some times he did not follow his own rules. So he lost all his fortunes. He died by killing himself and he was in huge debt when he died.


He has written a book  called ‘ Reminiscences ' of a stock market ‘ under a pseudo name. This Book is considered as a classic for its depiction of speculation in an interesting way, even now.

W D Gann, A Legendary Trader of Markets

 

Gann was born on June 6, 1878 in Texas, USA. His father was a cotton industrialist. He started trading the stocks in 1902 when he was 24.

An avid reader of charts, he developed over the years a Technical Analysis method to determine the movement of stocks. He never revealed the method to anyone but he hinted that his forecasts were based Law of Vibration. He accurately forecasted where a stock would sell.

In 1909,  'The ticker and Investment Digest" Magazine reported they had oversaw his trading for October of that year and it included 286 winning trades and 22 losing, a win rate of 92%, which is unthinkable even now.

He also hinted what ever happened in stock market had happened earlier. He said, ‘History always repeats itself’. Later, he used astrology in predicting the stock market movements. And also Gann described the use of geometrical angles in the stock market.
After acquiring a huge fortune, he started teaching students of Technical Analysis. He wrote the following books;-

• How to Make Profits Trading in Puts and Calls
• 45 Years in Wall Street
• Truth of the Stock Tape
• How To Make Profits in Commodities
• Truth of the Stock Tape and Wall Street Stock Selector

Any Student of Technical Analysis should at least have some insight about his method to be a successful Analyst.

Some Useful Trading Resources of Traders

For successful Investing or trading, one needs knowledge. A good and through knowledge about the financial Market is necessary for a successful financial life. You need to get quality inputs about the market to enhance your knowledge below I have given some resources which I felt best to my knowledge.

If you are interested in Technical Analysis, then these following sites would be of more helpful to you.
1. www.Stockcharts.com
2. www.Elliottwave.com
3. www.neowave.com
4. www.traders-talk.com

Here are some of the must read books on Technical Analysis and Investing

1. Technical Analysis explained – by Martin Pring
2. Elliott Wave Principle – by Robert Prechter
3. Reminiscences of a Stock Market Operatior – by  Jesse Livermore

Still, there are some more interesting books. I will mention it in the next post.

Which sector is going to lead the next bull market?

The million dollar question that is being raised more often during Bear Market is, which sector is going to charge the next bull Market. Everybody has their own answers to this question. Let me have my answer here. My predictions are based on Technicals.
If you look at the charts of any sector  which has undergone a bull market, we would find the previous bear market to that bull market would be mild one. Which means, the sector that is going to undergo bull market is likely to see a not so strong bear market.
If it sees a strong bear market, it would not be possible for that sector to climb such a big height to lead a big bull market. So, the previous bear market should be a mild one. Going by that case, then we can find Pharma, FMCG, Banking Sector didn’t see a big bear market during 2008 bear market.
This indicates this sector is likely to lead the next bull market which is likely to start in 2 or 3 years, worldwide. Investments in this sector is likely to give good returns in coming years. Be smart when it comes to investing.

Types of Trading Styles of a Stock Market Trader

Many people who are new to the stock Market might have heard about the words Intraday Trading, Swing Trading, Momentum trading and etc. To understand the concept simply, I have here given some explanations to these terms.
Intraday Trading
If any body buys stocks using margin money and sells the stocks on the same day itself, then it is Intraday Trading. Here buying and selling is done on the same day itself. The quantity may vary according to the trader. The intention of a day trader is to use the movements in the intraday to make money. Personally, it is the toughest trading in the Market.
Positional Trading or Swing Trading
If a trader takes a long (buy) or short (sell) position in the futures market and holding it for more than one day, then it is positional trading. The intention of the positional trader is to make use of the short term price movements of the stock, either in the downside or in the upside. The difference between day trading and positional trading is, in day trading one can use the intraday movement only and the positions are closed on that day itself and also the intraday movement will be less when compared to short term movement but in positional trading the swing in short term would more than the intraday movement.
So automatically, the profit or loss potential is high in positional trading. Those who has high capital can trade the market positionally.

Momentum Trading
Momentum trading is done by traders who interested only in big moves in the downside or upside. They wait till they anticipate a big move. They don’t trade all the time. This trading also has its high risk. If the trader fails to anticipate the correct direction of the market, they he will end up in huge loss unless he cuts his positions immediately.
Select the trading style that suits well your personality. Happy trading