Hello Hiveans!
In 1929, largest market crashed happened due to this market crash the economy of the world disturbed for next 10 years. On that day, A US stock market trader, Jesse Livermore earned 100$ Million from trading. His wife and mom was worried about him that he may lost their whole wealth due to this market crash but when came home he was so happy. He told his wife and mother that he knows the market is about to crash that's why he bet on it and he earned 100$ millions.
That's why Jesse Livermore is known as the world's best trader. But if we look forward about 10 to 12 years in 1940, Jesse committed a suicide in a hotel room and wrote a latter for his wife in which he said, "I can't handle this anymore. I'm sorry honey this is all my fault. I love you so much".
So friend, the man who was richest man why he committed suicide? The reason behind this he earned extra ordinary profits from trading but many time he got bank corrupt. From his life, we will learn some lessons from great trader.
Well, let's get started....
Jesse was porn in a poor family, his father was a farmer and he wanted his son to help him out in farming but Jesse interested in arithmetics and at the age of 5 he reads daily newspapers to get knowledge of finance. He started his first job as a quotation boy where he wrote stock prices on a board. He build interest in stocks and their prices by doing work on that place.
He analyse the pattern of prices ups and downs and he applied his pattern in trading and he got a Godot profit from his knowledge. After some time he left his job because he got enough profit from trading. At yeh age of 20, he earned 10,000$. Gradually, he increased his profit from his analysis but many time he faced loses because of trading emotionally.
Means, when he buy a stock and he get high profit then he emotionally invested more money in that stock and at the end he get loss. He never do proper analysis in second investment due to excitement that's why he got loss. So forts lesson we got from his life is "Never do trading on emotions".
A successful trader depends on their strong arithmetic and statistics skills. So if you want to become successful trader then you need to get more knowledge about math and statistics. The mostly people who entered in stock market they don't know any thing about math and statistics that's why he lost thier wealth. The chances of loss is high in this situation.
After someone, when he get more profits and on the other end, the other training shops was in lost that's why he banned Jesse to trade in thier shops. After sometime, Jesse went to New York for trading. But he never get stable in trading and he continuously loses his wealthbecause the New York strategies were different from his current place.
Jesse lose hi all wealth by learning new formulas and strategies and ultimately he declared that he is a bank corrupt and came back from New York. But Jesse was a fighter he again learned the biggest strategies of the work and finally in 1901, Jesse again went to New York. Now he earned high profit in his every trade because he had learned the all strategies of the world.
The famous trade of his in New York in 1907,when the market crashed he earned 1$ Million in just one day. Very body got inspired from him and they wanted to meet him and learn from him how he get highest profit every time. In 1908, Jesse meet a man, Thomas, he told Jesse to invest in cotton. Jesse never get advices from anyone because he believes in trading is the profession of just one man.
A group discussions is never be successful in trading. He was confused for investing in cotton but for some reason, Thomas agreed to invest in cotton and after some time he got biggest loss because the rate of cotton declined continuously and Jesse lose his 90% wealth for trusting others. In this situation, we get a second lesson that in stock trading we don't need to hear other sounds and their advices because who advising you is for thier own profit not yours profit. Some advice may help you but first you need to analyze every advice personally. That's why the second lesson is "Never get influenced by any body".
He struggles again but in 1915, he gain declared as bank corrupt. Again he lost thier whole wealth and he got stuck in loans. Jessi again concentrate and focus on his strength and experience did right trades by controlling his emotions and started earning profits. After 2 years, he had cleared his all loans and saved much money.
He got again famous for great trader and every newspaper and magazine right down his stories. An 1920, when most do people entered in stock market and world's economy was growing but in 1929, something happen which was out of imagination of all people. Till 1929 market was overvalued because a lot of successful investors entered in market but this things didn't identified by new investors but the Jesse has 30 years experience.
So when market crashed in 1929 which is known as, the great depression, Jesse predicted this crash and set a bet on that market is about to crash and the market really crashed on that day. He got 100$ Millions in just one day, if convert them now a days currency it would be 20$ billions or 1.5 lakh crores rupees. That was enough for his next 5 generations but addiction is a thing that can be destroy any person and Jesse addicted for trading and gambling and he never quit trading.
In 1934, US government roll out many new policies of trading and illegals the many old trading practices. Some strategies was that in which Jesse expert in it but government banned these strategies. Jesse again continuously getting losses and he did more trades to recover his losses but he never get recovered.
Because Jesse's ego was hurting due to this ego he lost his all wealth and gain third time he declared as Bank Corrupted. Imagine, in just 5 years 100$ Million lost by Jesse. Again he started struggling but the come back was tough for him he committed suicide.
So the third lesson from his life is " don't consider your ego". Means if you lost your money so you don't need to recover that money from that place. You don't need to follow same strategies if you lose your money in trading. There are lots of strategies that can be followed and get a good return.
Like, in 1929 when Jesse got his biggest profit, he knows that market is crashed and it will come back to their actual condition. So he could invest in buying of his 90% wealth the 1$ million was enough for his life. After some time when market got stabled he gain got doubled profit because in 1935 the market was stabled he doubled enough. Jesse could be doubled his 100$ in just 5 years but he never invested and got bank corrupted and committed a suicide.
And the 4th and the most important lesson is if the greatest trader of the world can be bank corrupted in his life who learned trading from his childhood then if you are new in stock market and you don't have any knowledge so you would be awarded of it that without any knowledge the chances of losses is more than profit.
Wrapping Up...
So if you want to do trading the its your decisions but you should start from a very little amount and at starting, focus on learning not in Profit. Build you own strategies by learning. Write down on the paper why you are buying that stock and when you got profit verify it either it is earned due to same reason that was in your mind.
Because in most cases you buy a stock from different reason and you get profit from different reason. It will build in you a false confidence and in future you will get loss. Trading looks simple but it is more difficult and complicated. If you want to earn enough profit than it will be possible in long term trading. It looks different from far but its easy from day trading.
Signing Off MindGamer