In this episode of Truth About FX, Walter talks about Jesse Livermore, his book, life, and history as one of the most revered forex traders. What made him the trader that he was? Walter also talks about risk management and how Jesse Livermore’s life could set as an example when it comes to psychology, strategy, and dealing with losses.

Download (Duration: 04:24 / 5:04 MB)

In This Episode:

00:27 – right and wrong

01:36 – warning

03:06 – sit and wait

04:01 – wild sums of money

Tweetables:

Risk management is the name of the game [Click To Tweet].

Look no further than Jesse Livermore  [Click To Tweet].

Made real money by waiting  [Click To Tweet].

Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.

Hugh: Hi, Walter. What you think was right and wrong about Jesse Livermore’s trading Psychology?

Walter: Great question, Hugh. There’s a couple of things that stand out. First of all, a lot of people probably don’t know or maybe you do know that Jesse Livermore took his own life.

I know a lot of people talked about how his book was so great and all that or the thinly veiled biography “Reminiscences of a Stock Operator”. We can put the link for that in the shownotes for this episode so that you can check it out if you haven’t read the book. It kind of relates to forex traders today even because back in the day, Jesse was trading with these crooked brokers that they called “bucket shops”.

Forex has a dirty name too because of these crooked brokers or whatever and people selling you automated robots. It has a dirty name. You can relate to Jesse’s world where people were going in trading with these so-called bucket shops.

But, here is the thing about Jesse, two things that stand out for me. Number one is he took his own life so if there’s some sort of warning to traders out there that risk management is really the name of the game and being on top of that, look no further than Jesse Livermore.

He is a well-known, well-established, and really sort of revered trader. He took his own life and that tells you right there all you need to know so that’s number one. Keep that in mind.

Number two is the book is great. It’s an excellent book but for me what really stood out was his quote where he says something along the lines of — again, I’ll link this up in the shownotes so you guys can see it. But, Jesse Livermore says something along the lines of this, he say, “Look, any fool can be right to buy at the right time or sell at the right time in the market. Any fool can do that, anyone.”

It happens everyday that someone gets into a trade at the perfect time. He says, “It takes real guts and patience to wait it out and that was where my real money was made”. You got that? I made my real money by waiting.

And so, that’s something that I think a lot of people should probably...