Ok now think about this:
Livermore is still considered a legend even if he lost his pants more than once, last time he lost all his money he decides to loose his life too. People looks at Livermore as a legend but wouldn’t trade like him, i think people isn’t really concerned about his trading strategy.
Let’s say Livermore at the top of his success stops trading, what will be the results? he would live his entire life as millionaire, surrounded by people asking him how to trade, he didn’t changed his way of trading, he just stopped while in the money.
If you want to make 1 million from 1k using a averaging down strategy, do it! but be conscious you’re probably gonna lose that 1k, if you will be very very lucky you’ll retire with 1 million in your pocket.
At the same time you can beat the casino, with roulette. Bet 1€ at a time and if you win martingale it! if you win 19 times in a row you’ll win 524.287€, you decide to don’t drink a coffee a day to make half million dollar. Obviously if you want to beat the casino everyday for your entire life using that strategy, well, probably you’ll be a loser...But if you will be not greedy, you’ll be able to stop with more than a half million. 500K are too few??! bet 10€ a day and you’ll get 5 million.
You know what? it’s tough to lose 1€/10€ a day for 10 years in a row, here psychology kicks in, can you handle to bleed money everyday from your wallet, without knowing if you’ll ever win some?
Now all the edge traders will say: “ah you have to bet, because you don’t have an edge” now look at fund managers statistics, most of them will not reach 10 years, losing ALL their (and their clients) money. But they don’t bet!! they absolutely know what they are doing, they take trading seriously.
While they blow up, telling you how to trade, you are still there betting 1€ at a time, you’ll never go broke, you’ll never get too much stressed, at the end you have good chance to make money...
Livermore is still considered a legend even if he lost his pants more than once, last time he lost all his money he decides to loose his life too. People looks at Livermore as a legend but wouldn’t trade like him, i think people isn’t really concerned about his trading strategy.
Let’s say Livermore at the top of his success stops trading, what will be the results? he would live his entire life as millionaire, surrounded by people asking him how to trade, he didn’t changed his way of trading, he just stopped while in the money.
If you want to make 1 million from 1k using a averaging down strategy, do it! but be conscious you’re probably gonna lose that 1k, if you will be very very lucky you’ll retire with 1 million in your pocket.
At the same time you can beat the casino, with roulette. Bet 1€ at a time and if you win martingale it! if you win 19 times in a row you’ll win 524.287€, you decide to don’t drink a coffee a day to make half million dollar. Obviously if you want to beat the casino everyday for your entire life using that strategy, well, probably you’ll be a loser...But if you will be not greedy, you’ll be able to stop with more than a half million. 500K are too few??! bet 10€ a day and you’ll get 5 million.
You know what? it’s tough to lose 1€/10€ a day for 10 years in a row, here psychology kicks in, can you handle to bleed money everyday from your wallet, without knowing if you’ll ever win some?
Now all the edge traders will say: “ah you have to bet, because you don’t have an edge” now look at fund managers statistics, most of them will not reach 10 years, losing ALL their (and their clients) money. But they don’t bet!! they absolutely know what they are doing, they take trading seriously.
While they blow up, telling you how to trade, you are still there betting 1€ at a time, you’ll never go broke, you’ll never get too much stressed, at the end you have good chance to make money...