The Immovable Trains

It was the year of 1922 when one of the greatest railway strikes in the United States swept across the country. The American economy was haunted by a sharp deflation as well as an oversupply of workforce, because of the return of surviving soldiers from the First World War. In the face of a horrible economy, the government approved successive wage cuts that enraged many workers. After a failed attempt of negotiation by the National Civic Union in late 1921, the tension between the workers and the employers escalated to an uncontrollable level.

Longstreet’s Viewpoints

[The following is an old article written by me, which was published in SelfGrowth.com many years ago.]

Viewpoints of a Commodity Trader is a little known book written by futures trader Roy W. Longstreet (1968). It is a good book in the sense that it contains a lot of wisdom on the psychological aspect of trading. However, the content was put together in a casual manner which might be perceived as unorganised by critics. This is perhaps the reason why it was not very popular and you cannot easily find a copy today. Since it is a waste to let the wisdom of Mr. Longstreet fade away without getting noticed, here is my attempt to summarise his ideas in a organised manner.

The Donchian Rules

The influence of Richard Donchian in the managed future industry cannot be neglected. He is known as the father of mechanical trading systems, as well as the originator of the managed money industry. Despite his earlier effort to promote his modern approach of trading, it was only his mid-sixties when he started to gather fame and make a real fortune for himself. It is a remarkable example that when you set your mind on doing something, you can eventually do it.

The Cheetah and the Sparrow

Legendary trader Mark Weinstein, who was one of the best traders of our time (Schwager, 1989), is well-known for the stunning accuracy of his trades. He described himself as a picky trader who always insists on waiting for a high probability setup. Despite his conservatism, he is fabulously profitable. In an option trading contest, he turned one hundred thousand dollars into nine hundred in just three months, and he did not have one losing trade in that contest. More impressively, he did it without pyramiding, i.e. no additional bets in a winning position, so that his amazing result was solely due to his unbelievable market timing.

Expect the Unexpected

In the world of speculation, there is no should-be. No matter how well you plan your trade, there is always something out there that can prove you wrong. The following experience of Jesse Livermore  (Lefèvre, 1923) affirms the Murphy’s Law, “Whatever that can go wrong, it will.”

After the First World War broke out in Europe, the commodities prices went up as a result of wartime inflation. Over the course of the prolonged conflict, the prices of many commodities doubled, tripled or even quadrupled to their pre-war levels. The great commodity bull market was well underway, and everyone was busy buying commodities. However, there was one notable exception that did not go up with the rest of the market, and it was coffee.