One final thought - often learners will think what have these old guys have to teach us in the modern age, the market is way different in the 21st century.
On Aug 25 2013 I wrote:
"I’m not yet 100% sure what he means his constant reference to ‘time’.
Livermore advocated a “time” SL - these very words echoed somewhere in the recesses of my brain in a CHF trade a few years later.
I employed the time stop and exited - days before the SNB unpegged.
Hmm - I see he had 3 wives as well as making and losing several fortunes - do you think he was Bipolar ? I often wonder whether a propensity to bipolar or Autism can produce an intensity of study and the “insight” to make a great trader.
Monday morning look at my EURUSD:
Last week put in a much lower close on the week and the low of the week was also put in on Friday. This was followed by a substantial, but not necessarily significant, pullback from the lows back up to the 1.1400 area.
This, naturally, leaves the long-term charts from weekly down to 4H still negative.
But the short end, 1H and below, finished last week neutral to mildly positive and has remained so in early trading this morning.
Price is sandwiched here between Friday’s close and Friday’s daily pivot and testing Friday’s highs here. But this is typical early Monday stuff and it is prudent to wait for a direction to solidify before entering prematurely.
If we break on the upside then that 1H 200 SMA is an attractive target. But if we drop through the bottom then I am still looking for a possible test of that weekly 200SMA at 1.1311.
Monday mornings are often a deceitful time in trading so I am maybe waiting to see what NY does first… maybe! 
1H chart:
Whilst I don’t want to jump around too much from one stage in Jesse’s life to another, this was an interesting comment"! 
I can’t help wondering whether his later huge swings in fortunes arose from an (almost?) inevitable distraction from his core methodology as a result of his own success. We know that he was not a recluse and that he enjoyed the best of life and friends. And, as a result of great wealth, he must have inevitably been influenced by the “crowd” and opinions. And maybe that was one influence that should not have been allowed into his analytical process.
By becoming an avid reader of newspapers, he was no longer purely looking at price. Things had changed.
In our trading world today, we watch Bloomberg, Reuters, newspapers, specialist journals, internet sites, blogs - all the time seeking something more, hoping for that “tip” that the young Jesse had no time for. But, interestingly, he did not, even as a young man, actually deny the value of “tips” he just felt that they only belonged in the world of the rich):
“To me the only people who played or could play tips were the customers old jiggers with oodles of dough.”
Maybe it was his success in joining the ranks of those with “oodles of dough” that led to his distraction and erratic success.
We could compare his “avid reading of news” with his early thoughts:
“Prices either were going the way I doped them out, without any help from friends or partners, or they were going the other way, and nobody could stop them out of kindness to me. I couldn’t see where I needed to tell my business to anybody else. I’ve got friends, of course, but my business has always been the same a one-man affair. That is why I have always Played a lone hand.”
And his “lone hand” in those early years was based purely on his journalling of prices which was:
“…a sort of record of my hits and misses, and next to the determination of probable movements I was most interested in verifying whether I had observed accurately; in other words, whether I was right.”
Maybe success was the factor that caused him to lose sight of the KISS in his trading…
PART 4: Jesse arrives in NY with some money and some reflections
Some time prior to his decision to move to NY (a move forced on him by his own exceptional success in the local bucket shops, who now refused to take his business because of it) Jesse told us:
”I was only twenty when I first accumulated ten thousand dollars in cash.”
But when the time actually came to move there he says:
”I came to New York at the age of 21, bringing with me all I had, twenty-five hundred dollars.”
One year older and only 25% of his earnings left! So what happened? Tell us, Jesse:
”I told you I had ten thousand dollars when I was twenty. But I didn’t always win. My plan of trading was sound enough and won oftener than it lost. If I had stuck to it I’d have been right perhaps as often as seven out of ten times. In fact, I always made money when I was sure I was right before I began. What beat me was not having brains enough to stick to my own game that is, to play the market only when I was satisfied that precedents favored my play. There is a time for all things, but I didn’t know it…….there is the Wall Street fool, who thinks he must trade all the time. No man can always have adequate reasons for buying or selling stocks daily.
I proved it Whenever I read the tape by the light of experience I made money, but when I made a plain fool play I had to lose. I was no exception, was I? There was the huge quotation board staring me in the face, and the ticker going on, and people trading and watching their tickets turn into cash or into waste paper. Of course I let the craving for excitement get the better of my judgment. In a bucket shop where your margin is a shoestring you don’t play for long pulls. You are wiped too easily and quickly. The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages. I was only a kid, remember.”
At this stage in his career, the young Jesse had developed a great system that had good positive expectation and was bringing in consistent profits. But he was also losing much of his gains through typical overtrading and non-system trades that no doubt were purely intuitive or just plain reckless, ”for the sheer fun of it”.
It is at this point in the story that Jesse comes out with some interesting observations and truths about speculating and the human condition:
The trader’s learning curve:
”It takes a man a long time to learn all the lessons of all his mistakes.”
The market:
”They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side.”
Account preservation:
”All my life I have made mistakes, but in losing money I have gained experience and accumulated a lot of valuable don’ts. I have been flat broke several times, but my loss has never been a total loss. Otherwise, I wouldn’t be here now. I always knew I would have another chance and that I would not make the same mistake a second time.”
Self confidence:
” I believed in myself. A man must believe in himself and his judgment if he expects to make a living at this game.”
Demo accounts:
”I have heard of people who amuse themselves conducting imaginary operations in the stock market to prove with imaginary dollars how right they are. Sometimes these ghost gamblers make millions. It is very easy to be a plunger that way. It is like the old story of the man who was going to fight a duel the next day.
His second asked him, “Are you a good shot?”
“Well,” said the duelist, “I can snap the stem of a wineglass at twenty paces,” and he looked modest.
“That’s all very well,” said the unimpressed second. “But can you snap the stem of the wineglass while the wineglass is pointing a loaded pistol straight at your heart?”
How long does it take to become profitable:
”I know from experience that nobody can give me a tip or a series of tips that will make more money for me than my own judgment. It took me five years to learn to play the game intelligently enough to make big money when I was right.”
A definition of Speculation:
”….when I am wrong only one thing convinces me of it, and that is, to lose money. And I am only right when I make money. That is speculating.”
Hmmm, now where were we, aah yes: ”Anyhow, I came to New York with twenty-five hundred dollars.”
And then what, Jesse?..
”Well, it wasn’t six months before I was broke.”………………
Hi Manxx,
Well played Sir, brilliant book isn’t it!
Read it when i first started out and continue read excerpts from it now and then. Probably get more from it now tbh.
An unusual quote which has stuck with me and which i think says alot about the man himself is:
“It does not take a reasonably young and normal man very long to lose the habit of being poor. It requires a little longer to forget that he used to be rich.”
More to that than meets the eye haha.
I’m very well thanks Manxx. Meant to get back to you about the Chocolate factory…seems like the founder was an interesting Guy.
Looking at my trading plan and what i set out to do at the beginning of the year It’s been a pretty good year overall. We learn, we learn, we learn.
Then again there are so many levels to this thing we call Forex. Every year it feels like “WOW thats deep!!! now i’m “REALLY” getting it.”.
When you turn around and look back you can’t see the shore anymore so we must be getting closer
Guess that’s what keeps me in the game.
How about yourself?
Thanks for asking
Not really much to report tbh. I still keep an eye on Crude Oil but since I only trade it from the long side there has only been a couple of periods when I’ve been active there. These trade war/tariff impacts on various global economies is helping to keep a lid on oil prices and I am drifting away from it.
I have also dabbled with the idea of including other pairs instead of just EURUSD but I have to accept that some people are broad thinkers and others are specialists - and I am clearly the latter…so I am still staring at EURUSD through the microscope! 
But it has been a very good and consistent year and my method has not changed at all, so I feel pretty settled with that.
We had a really great holiday in Scotland on the shores of Loch Ness, and it really didn’t rain (except once). That was my first time there, which is a sad admission from a Brit, but now its done, another challenge ticked off the list. Rome is one of the few left now and that might be a target for next year
He definitely suffered from depression as witnessed from his suicide notes.
He was very focused in trading - would usually average in, hated the term bullish/bearish and disliked giving tips.
He gave a tip to a lady who had pestered him, the stock abruptly rose, then later he saw the “danger” sign to sell - got his wife to call the lady telling her to sell quickly.
The lady didn’t buy - wanted to wait to see if he was right. This annoyed him big time.
He was short black Tuesday (lived/worked out of his office) made around 100m - his family were sure he would be one the losers, imagine their surprise.
He, along with JP Morgan started to buy, then others followed - they wanted to stabilize the market - which they did.
PS - he used correlation to help with decision making, but that’s a long story.
PART 5: The turning point
Jesse had a system! The problem was that it only worked in a certain trading environment. What had worked in the bucket shops, where one’s trade entry and exit prices were those showing on the ticker tape, did not work at all in the real stock market world where the ticker tape prices lagged the actual share prices in the market.
”I could beat the game my way only in a bucket shop…When I bought the price was there on the quotation board, right in front of me. Even before I bought I knew exactly the price I’d have to pay for my stock. And I always could sell on the instant. I could scalp successfully, because I could move like lightning.”
”what was a perfect system for trading in bucket shops didn’t work in Fullerton’s office. There I was actually buying and selling stocks. The price of Sugar on the tape might be 105 and I could see a three-point drop coming. As a matter of fact, at the very moment the ticker was printing 105 on the tape the real price on the floor of the Exchange might be 104 or 103.”
Jesse was soon well-aware that something was wrong with his approach but could not work out what, exactly, what was the source of the problem.
”It didn’t take me long to realise that there was something wrong with my play, but I couldn’t spot the exact trouble. There were times when my system worked beautifully, and then, all of a sudden, nothing but one swat after another.”
But although Jesse was still an exceptionally young person, he had an extremely mature and objective approach to the problem and didn’t for an instance assume the problem was himself and just throw in the towel. He did not blame himself or swear at the markets (as we are so easily inclined to do!), he recognised that it was in his trading method.
”There I was, a mere kid, who had never before been away from home, flat broke; but I knew there wasn’t anything wrong with me; only with my play. I don’t know whether I make myself plain, but I never lose my temper over the stock market. I never argue with the tape. Getting sore at the market doesn’t get you anywhere.”
In 1901, Jesse finally made some good money, being carried along more by the big boom than his trading skills. Even so, he still gave back by periodically calling tops and going short, only to have to cover them very soon after at a loss.
”We ran into the big boom of 1901 and I made a great deal of money that is, for a boy. But every time I sold I lost money, and if it hadn’t been that I ran darn quick I’d have lost a heap more. I looked for a break, but I was playing safe making money when I bought and chipping it out when I sold short so that I wasn’t profiting by the boom as much as you’d think when you consider how heavily I used to trade, even as a boy”
He reached a record balance of $50,000 equity - and it was just at this point that the problem with the lagging prices on the ticker tape hit him hardest. Only a few days later he foresaw a big break in prices coming and anticipated a fast recovery to follow it. So he planned to sell into the break and then buy back at the lows and benefit in both directions.
And the result?:
”Everything happened as I had foreseen. I was dead right and I lost every cent I had! I was wiped out by something that was unusual.”
What happened was that when the ticker tape was showing the typical signals indicating the start of the break, the actual prices of the stocks had already fallen to the exact level where Jesse was intending to buy back into them. By the time he received confirmation of the prices he had actually sold at he had no other option but to buy them back. Naturally, the real price was again already way ahead of him and he paid far more than he has sold them for.
Jesse was wiped out again. But then we read an interesting observation from this man showing his attitude to trading, which is a lesson to us all. Whereas most of us would have just given up after such a set back, Jesse looks at the positive aspect here:
” If the unusual never happened there would be no difference in people and then there wouldn’t be any fun in life. The game would become merely a matter of addition and subtraction. It would make of us a race of bookkeepers with plodding minds. It’s the guessing that develops a man’s brain power. Just consider what you have to do to guess right.”
This must be one of the most valuable quotes so far - I have to repeat it!!!:
"…Just consider what you have to do to guess right.”
But Jesse’s problems were far from over. He still could not make the adjustments to trading real markets and later that year he hit rock-bottom. Not only was he again cleaned out but he had also got used to an expensive living style - and his faith in himself was broken:
”Early that fall I not only was cleaned out again but I was so sick of the game I could no longer beat that I decided to leave New York and try something else some other place. I had been trading since my fourteenth year. I had made my first thousand dollars when I was a kid of fifteen, and my first ten thousand before I was twenty-one. I had made and lost a ten-thousand-dollar stake more than once. In New York I had made thousands and lost them. I got up to fifty thousand dollars and two days later that went. I had no other business and knew no other game. After several years I was back where I began. No worse, for I had acquired habits and a style of living that required money; though that part didn’t bother me as much as being wrong so consistently. ”
So, understandably, and as many of us would also do, he gave up! He went back home ………… but to do what? … well, actually, this:
”Well, I went home. But the moment I was back I knew that I had but one mission in life and that was to get a stake and go back to Wall Street.”…
Its been a slow and rather undecisive week so far for the EURUSD, but the downside bias has been dominant. But, on the other hand, one can hardly talk of a downtrend when we have only just managed to retrace Friday’s upmove and are now sitting on the same lows as last week. But a break through this level should see more on the downside.
It was interesting to witness Monday’s indecisive whipsawing in the short timeframes. These are times when traders in the microcosm world of 15m=>1m charts can get whipped and whacked repeatedly while the market actually goes nowhere at all. Here is the 30m chart:
But all that short term commotion just disappeared on the 4H chart into that one long-legged bodyless candle (red-ringed) and the following down candle was a good sell signal. The 4H chart is still maintaining an uninterrupted steady downward bias that started already about 2 weeks ago with that strong bounce off the SMA 200:
Being otherwise engaged today, I closed out all my positions for the month yesterday. In addition to my EU shorts, I also bought USDJPY’s break above its 200 SMA and sold into Dennis’ SW trade on GBPJPY on a down signal - but since this gave an almost immeidate 25 pip gain, I just took the money and ran! 
- I still do not trust exposure to GBP pairs, too much risk of the unexpected and the Pound has gone a long way already…
There is no rational reason for closing positions at the month end, but I just like to see where I am at that time and it is my point for checking metrics.
October has been somewhat interesting. The EURUSD has not been a difficult pair to trade from a directional point of view, its been predominantly a sell all month except for that retracement back to the 4H 200SMA around mid-month. But it has been a slow development with many hiccups that create uncertainty with the longer term picture and leads to more frequent trades and a tendency to jump out of trades prematurely. This showed up in my metrics for October:
Total trades were 55, including 9 non-EURUSD which were either spontaneous opportunist trades such as yesterday’s two, or were checking out someone else’s thread. in this case, someone’s live signals thread (that resulted in a few pips profit, but showed the weaknesses in it overall (at least to me)).
Win rate was typical at 73% but the shorter profit runs showed up in a reduced average R:R, which was closer to 1:1 than normal. This reduced R:R also resulted from a greater tendency to close half positions early and run the rest. I don’t often do this because if my target is based on a strong analysis why jump out before it? But October’s uncertainty increased the prudence in closing out half and thereby covering the potential stoploss on the remainder (or moving the stoploss to B/E and sealing in a part-profit). The effect of this is to end up treating the two halves as separate trades with a lower average R:R.
But the upside of this approach is being able to take larger positions than normal. This is probably more psychological than factual, but with an intraday expectancy and regular monitoring, there is less exposure time wise and therefore the risk of unexpected “accidents” is reduced.
The logic in that is rather flawed, though. It is a bit like the old argument that the faster you drive the less time you are on the road and therefore the less likelihood of being in an accident. Therefore the faster we drive the safer we all are…
Six days ago:
Wait for it…
Five days ago
Wait for it…
Two days ago:
Wait for it…
…and…
…here we are at last! smack on the Weekly 200SMA 
Whoever said the EURUSD is slow!!! 
I was short in EU since 29th October. But, unfortunately, after reading your last post / analysis I have closed the deal 
In spite of that I have also closed USDJPY and CADJPY.
Edit: It’s purely my fault and not yours. I breached my own rule/discipline.
Why???
I thought i was quite clear on the downside direction:
I know I said that I had closed all my positions for the month-end yesterday but that was only because I have a lot to do today around town and I did add:
I don’t see what I said that would have prompted your exit decision?
Perhaps I wasn’t attentive that’s why I misunderstood your post.
Well I am truly sorry if I have caused you to lose out on some profit, that is not my aim here at all of course! 
If I have been ambiguous and caused you to prematurely close out a profitable position then that is a serious detrimental impact from my postings here and there is only one solution to that. I certainly do not wish to a negative influence on anyone’s trading here and so I think it is time to end here and move on to other things…
No need to sorry. I have already admitted that
No you should continue what you are doing. Don’t discontinue just because of me. You are doing great.
Hey Manxx,
As the site is aimed at beginners there is a lot that they can learn from what you are posting, the same would be true of someone who wanted to learn or was interested in your approach; so stopping would be counter productive.
I am sure that posting your analysis does something positive for your trading too otherwise you wouldn’t do it; so again, stopping would be counter productive.
The only issue really is that for some people, trading a pair whilst looking at someone else’s analysis can introduce complications and/or doubt either consciously or subconsciously. For this very reason i never look at anyone else’s analysis apart for research/ development purposes and even then never during a session or trade. You have to trust what you see in this game, accept the consequences when you are wrong and get paid when you are right. Again that is down to the individual and not you so stopping would be counter productive.
Keep going old son!
Win
