Archive for February, 2010
Reminiscences of a Stock Operator – Annotated Edition
February 24, 2010 at 11:07 am
Trading books are among my favorite to read, and I’m always on the lookout for a good one. The ones I like the most aren’t of the how-to nature, given that I’ve been a full-time trader for so many years. Instead, I really like those that get inside the heads of great traders.
I’ve pointed out my favorite reads in this category before, and that hasn’t changed. I still re-read them each year, and I either pick up new lessons or am reminded of timeless lessons each time I go through them. It’s a good investment of my time.
Perhaps at the top of the list is Reminiscences of a Stock Operator
It’s based on real-life trader Jesse Livermore, but technically the book is fictional. Having read several other books by and about Livermore, this one does chronicle much of his trading past in an accurate fashion. However, I’ve always wondered about the facts behind the book and have wanted to know more.
So, when I was asked if I’d be interested in receiving a copy of the new Annotated Edition
- Foreword by Paul Tudor Jones. Need I say more? A Market Wizard weighs in on why this timeless classic is among his favorites, including an in-depth Q&A in the back of the book.
- How Lefévre got Livermore’s story. I had wondered how Lefévre told Livermore’s stories with such accuracy and keen insight, and it’s clear their combination created a better work than either of them could have told individually.
- Explanation of Livermore’s ‘hunches.’ The book helps explain how a pro like Livermore can act boldly when he felt the urge to go big, based on pattern recognition and his experience as a tape reader.
- Selected quotes by chapter. Dozens of snippets from the book which could each be taped to my monitor on any given day, such as: “Remember that stocks are never too high for you to begin buying or too low to begin selling.”
- How Livermore manipulated stocks. It was interesting to see how Livermore shifted from a trader to an ‘operator.’ It’s an art form how a whale like him can accumulate and distribute large positions, and additional light was shed on how and when he made his big moves, minimizing slippage along the way.
This new Annotated Edition is filled with side notes, insights, and the historical context in which the events took place – right alongside the original text of the book. Cultural settings are explained, and economic and political circumstances are discussed. Backgrounds of key characters are highlighted, helping to further clarify each scene.
The photos and detailed descriptions of the conditions under which Livermore was trading also shine considerable light on each circumstance. As a result, I not only learned some interesting history of the market, but along the way I also gained some valuable, timeless insights to apply in today’s trading environment.
Thank you Jon for sending me a copy of the book! And in case some of you haven’t read this classic, pick up a copy of it today – I have no doubt it’ll quickly become your favorite.
Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
Relative Volume On Demand
February 23, 2010 at 11:01 am
I’ve long been a user of the real-time scanner and filter Trade-Ideas Pro – since 2003. It has a ton of features for locating stocks on the move during the trading day, which is huge for a full-time trader like me.
My favorite feature is a pretty simple one though, which is called Relative Volume. This compares current volume to normal volume for the same time of day, and it’s displayed as a ratio. So for example, a stock trading 5 1/2 times its normal volume would have a Relative Volume display of 5.5.
Until now, I’ve thought that to get Relative Volume readings within Trade Ideas Pro, some other specific alert would need to be triggered (new high, new low, etc.). But today, I did something weird…I asked for help!
The CEO of Trade Ideas, Dan Mirkin, gave me the work-around for getting on-demand Relative Volume, which I want to pass along to you. Here are the steps to take:
Open a New Alert Window from within the program. No alert or filter settings are needed.
This window can stay minimized and just pulled up when needed. Just right-click on it and go to Configure, and then Symbol Lists. Select ‘Single Symbol’ and type in the stock you’re after.
Click ‘OK’ once done, and it’ll then display the symbol and Relative Volume for you, like this:
I understand Trade Ideas Pro is undergoing some changes to include even more features going forward. Should make an already great product even better!
Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
Video Review of the Indexes 2-21-2010
February 21, 2010 at 1:22 pm
With only 4 days of trading last week after the Monday holiday, the bulls had to make it count – and they did. They went undefeated on the week with across-the-board gains each day, reclaiming some important levels in the process. But with light volume on the way up, the rally is not without its faults.
Add to the mix the fact that the market has become somewhat short-term stretched to the upside, and the conditions are ripening for at least a short-term pullback. As with any market move, anticipation must be met with confirmation, and as of yet we don’t have that. Nonetheless, it’s a good time to exercise some added caution on the long side as the temptation to book profits becomes more powerful for the bulls in the coming days.
As we head into a brand new week of trading, let’s examine some important levels in the indexes to keep an eye on in the days ahead. That will have the greatest influence on how individual stocks are going to move, so it’s where the trading week begins.
This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there – but in case you didn’t, I wanted to put it here on the blog for you.
Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.
Thanks for stopping by and I’ll see you here soon with more.
Until then… Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
Video Review of the Indexes 2-7-2010
February 7, 2010 at 1:30 pm
Last week proved to be an eventful one, although you wouldn’t know it from the net changes in the indexes from the prior week. What started out as a relief rally quickly turned into another nightmare selloff for the bulls, before a late surge Friday erased much of the damage. In the end, the market lost more ground and the correction continued.
Bounces are still getting sold, and that’s a reminder that the character of the market has changed in a big way over the past few weeks. The January highs now tower high above current prices, and we still have yet to see a meaningful bounce take place since the downside turn began. At some point it will arrive, but until then there’s still plenty of reason for caution in the current environment.
As we head into a brand new week of trading, let’s examine some important levels in the indexes to keep an eye on in the days ahead. That will have the greatest influence on how individual stocks are going to move, so it’s where the trading week begins.
This clip was also posted over on the Trading Videos site (as always), and perhaps you’ve seen it there – but in case you didn’t, I wanted to put it here on the blog for you.
Let me highly suggest clicking the “HD” on the video player and then going full-screen for best quality.
Thanks for stopping by and I’ll see you here soon with more.
Until then… Trade Like a Bandit!
Jeff White
Are you following me on Twitter yet?
