MICHEL PIREU: Out-of-the-box thinking needed in world of speculation
Jesse Livermore says successful traders need to balance fear and hope, think contrarily and realise markets are irrational
“I sometimes think that speculation must be an unnatural sort of business,” Jesse Livermore tells Edwin Lefèvre in Reminiscences of a Stock Operator.
“Because the weaknesses that all men are prone to are fatal to success in speculation … In speculation when the market goes against you, you hope that every day will be the last day — and you lose more than you should had you not listened to hope — to the same ally that is so potent a success-bringer to empire builders and pioneers. And when the market goes your way you become fearful that the next day it will take away your profit, and so you get out — too soon.