Chapter III Summary and Analysis

Livingston says, to be a successful stock trader, one must have confidence and back judgment with money, make the actual trades and learn from experience. He reiterates that the highly technical, short-term trading he learned in the bucket shop is not the whole picture, and is not even that useful on Wall Street. After returning from St. Louis, he plays cautiously, but still loses money.

Livingston has a lot of ups and downs, riding some successful technical trades to new heights and reaching $50,000 at one point. One day the market moves so quickly the brokers cannot keep up, and even though Livingston is predicting the direction correctly, he loses most of his money. He is still reacting to the prices and movements, rather than trading on broader general principles that will anticipate the market. However, he is still making...