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Hub AI
Jesse Livermore AI simulator
(@Jesse Livermore_simulator)
Hub AI
Jesse Livermore AI simulator
(@Jesse Livermore_simulator)
Jesse Livermore
Jesse Lauriston Livermore (July 26, 1877 – November 28, 1940) was an American stock trader. He is considered a pioneer of day trading and was the basis for the main character of Reminiscences of a Stock Operator, a best-selling book by Edwin Lefèvre. At one time, Livermore was one of the richest people in the world; however, at the time of his suicide, he had liabilities greater than his assets.
In a time when accurate financial statements were rarely published, getting current stock quotes required a large operation, and market manipulation was rampant, Livermore used what is now known as technical analysis as the basis for his trades. His principles, including the effects of emotion on trading, continue to be studied.
Some of Livermore's trades, such as taking short positions before the 1906 San Francisco earthquake and just before the Wall Street Crash of 1929, are legendary within investing circles. Some observers have regarded Livermore as the greatest trader who ever lived, but others have regarded his legacy as a cautionary tale about the risks of leverage to seek large gains rather than a strategy focused on smaller yet more consistent returns.
Livermore was born in Shrewsbury, Massachusetts, to a poverty-stricken family and moved to Acton, Massachusetts, as a child. Livermore learned to read and write at the age of three-and-a-half. At the age of 14, his father pulled him out of school to help with the farm; however, with his mother's blessing, Livermore ran away from home.
In 1891, at the age of 14, he secured employment, as a “board boy,” posting stock quotes at a Boston, Massachusetts, branch of the PaineWebber stock brokerage, at the rate of $5 per week. In 1892, at the age of 15, Livermore made his first trade when he bet on five shares of the Chicago, Burlington and Quincy Railroad for $5 at a bucket shop, a type of establishment that did not buy or sell the stock, but instead took bets on whether a particular stock's prices would rise or fall — essentially, a gambling parlor — a gamble that returned a profit of three dollars and twelve cents.
At the age of 16, he quit his job, began trading full-time, and from 1893 to 1894, Livermore, nicknamed by fellow traders "The Boy Plunger" (“plunger” being a colloquial term for a reckless gambler or speculator), was earning about $200 per week at the bucket shops in Boston, much more than his salary at Paine Webber. He brought $1,000 home to his mother to repay the $5 she had given him before running away, however she disapproved of his "gambling"; he countered that he was not gambling, but "speculating".
From 1895–1897, age 18–20, he accumulated $10,000 trading profits, a one thousand per cent net return in three years of trading. However, he was eventually barred by most Boston area bucket shops, because of his consistent winning. Using disguises and false names to trade only prolonged the inevitable city-wide ban.
From 1898–1900, age 21–22, he continued trading with Haight & Freese, the last Boston area bucket shop which had not banned him. However, Haight & Freese gradually widened the bid-ask spread and imposed restrictive margin requirements which made it much more difficult and risky for Livermore to make money.
Jesse Livermore
Jesse Lauriston Livermore (July 26, 1877 – November 28, 1940) was an American stock trader. He is considered a pioneer of day trading and was the basis for the main character of Reminiscences of a Stock Operator, a best-selling book by Edwin Lefèvre. At one time, Livermore was one of the richest people in the world; however, at the time of his suicide, he had liabilities greater than his assets.
In a time when accurate financial statements were rarely published, getting current stock quotes required a large operation, and market manipulation was rampant, Livermore used what is now known as technical analysis as the basis for his trades. His principles, including the effects of emotion on trading, continue to be studied.
Some of Livermore's trades, such as taking short positions before the 1906 San Francisco earthquake and just before the Wall Street Crash of 1929, are legendary within investing circles. Some observers have regarded Livermore as the greatest trader who ever lived, but others have regarded his legacy as a cautionary tale about the risks of leverage to seek large gains rather than a strategy focused on smaller yet more consistent returns.
Livermore was born in Shrewsbury, Massachusetts, to a poverty-stricken family and moved to Acton, Massachusetts, as a child. Livermore learned to read and write at the age of three-and-a-half. At the age of 14, his father pulled him out of school to help with the farm; however, with his mother's blessing, Livermore ran away from home.
In 1891, at the age of 14, he secured employment, as a “board boy,” posting stock quotes at a Boston, Massachusetts, branch of the PaineWebber stock brokerage, at the rate of $5 per week. In 1892, at the age of 15, Livermore made his first trade when he bet on five shares of the Chicago, Burlington and Quincy Railroad for $5 at a bucket shop, a type of establishment that did not buy or sell the stock, but instead took bets on whether a particular stock's prices would rise or fall — essentially, a gambling parlor — a gamble that returned a profit of three dollars and twelve cents.
At the age of 16, he quit his job, began trading full-time, and from 1893 to 1894, Livermore, nicknamed by fellow traders "The Boy Plunger" (“plunger” being a colloquial term for a reckless gambler or speculator), was earning about $200 per week at the bucket shops in Boston, much more than his salary at Paine Webber. He brought $1,000 home to his mother to repay the $5 she had given him before running away, however she disapproved of his "gambling"; he countered that he was not gambling, but "speculating".
From 1895–1897, age 18–20, he accumulated $10,000 trading profits, a one thousand per cent net return in three years of trading. However, he was eventually barred by most Boston area bucket shops, because of his consistent winning. Using disguises and false names to trade only prolonged the inevitable city-wide ban.
From 1898–1900, age 21–22, he continued trading with Haight & Freese, the last Boston area bucket shop which had not banned him. However, Haight & Freese gradually widened the bid-ask spread and imposed restrictive margin requirements which made it much more difficult and risky for Livermore to make money.