"Reminiscences of a Stock Operator" by Edwin Lefevre

Reminiscences of a Stock Operator
by Edwin Lefevre

http://www.amazon.com/Reminiscences-Stock-Operator-Investment-Classics/dp/0471770884/ref=pd_bbs_sr_1/102-3340297-4786500?ie=UTF8&s=books&qid=1177976442&sr=8-1

Ok, so I continue to work through my traders' classics' library and this was the next. A lot of people would say it should be the first book on trading anyone should read. In a nutshell, it is the only lightly fictionalized account of legendary early-20th century trader Jesse Livermore. The author here refers to him as Larry Livingston and writes in the first person as if he were the trader himself. But the book was written after several weeks of interviews and more or less tells the life (or at least trader's life) story of Livermore. Originally serialized in The Saturday Evening Post back in the 20s, it was very quickly published as a book and has been considered a must-read classic ever since.

And for good reason. While Livermore was no trained psychologist, he essentially teaches all the key lessons of individual and group psychology that the successful trader needs to know. Understand hope, fear, greed, ignorance and knowledge and when and where they are important. Many of the specific tactics and tools of trading are now, almost a century later, quite outdated - but the psychological element endures. Livermore went through numerous booms and busts in his personal trading and was astute at recognizing and examining his own failures and understanding the risks he should and should not take. When he took justified risks and lost, he was ok with it as every trader should and had a plan for how to deal with it. When he took unjustified risks and hurt himself, he was able to do a post-mortem and examine why. He tried never to get angry at the market, but to examine how it was he made mistakes in the market. Key lessons for any trader in any age, and many more lessons are found throughout this book. If you want to be a trader, I join the legions of others who call this book a must read.