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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. What can a trader do by applying rules to a pattern?

2. How much money does Livingston make when he first comes back from St. Louis?

3. What does Livingston want to do when he sees the market rallying?

4. Why should a trader start with a small trade?

5. What happens when one places an order on Wall Street time wise?

Short Essay Questions

1. What does Livingston say again about the bucket shops and Wall Street?

2. Why does Livingston return to Boston and what happens when he does?

3. How did Livingston make a lot of money in cotton?

4. What kind of hunch does Livingston talk about in Chapter VI?

5. What commodities is Livingston trading and how is that going?

6. What commodities has Livingston been trading and how is that going?

7. How much regulation is there in the stocks in Livingston's era and how did that affect the stocks?

8. What happens to Livingston in St. Louis?

9. What kind of trader does Livingston hear had a bad loss and what does he do about it?

10. How long does Livingston stay in Boston and then what does he do?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Livingston discusses the patterns various stocks show and how charts can be kept of these patterns and compared to market trends. By applying certain rules to the patterns, traders can decide if it is a good time to buy or sell a particular stock. Only the best traders make money with this approach.

1. Why does Livingston say only the best traders make money by using the patterns? Use examples from the book to support your answer.

2. Discuss several other situations in life where studying patterns are the best way to understand a situation.

3. Does this statement of Livingston's seem too simplistic, considering how few people actually make money in the stock market? Why or why not?

Essay Topic 2

Further, bankers beg Livingston not to sell any more stock, as it might increase the general panic, throwing the whole system into irrecoverable disarray. Livingston knows this would make it impossible for him to translate his profits into cash. Livingston sends in orders to buy a vast amount of stock, beginning a market recovery.

1. Given what you know of Livingston's character do you think buying stock in this situation was self motivated or was there an altruistic component? Why or why not?

2. Why do you think the bankers asked Livingston not to sell anymore stock? How would that relate to the creation of the 1930 depression? Use examples from the book to support your answer.

3. Do you think, given what happened in 1930, the market system could ever be thrown into irrecoverable disarray? Why or why not?

Essay Topic 3

The young Livingston is fascinated by patterns in the tape and has an excellent memory for numbers. He is able to remember the patterns various stocks normally exhibit well enough to predict their behavior or notice if they act strangely. He records his predictions and compares them to the actual performance of the stocks. Livingston trusts his observations more than tips from others.

1. What would you say about Livingston as a person based on the above paragraph?

2. Livingston is 15-years-old when the book opens. Describe the characteristics you see in Livingston that you would consider typical for a 15 year old and the ones you consider more adult like.

3. Livingston from the brief description above seems like a very organized, possibly even obsessive individual. Discuss the ways you believe this type of personality might do well as a stock broker.

(see the answer keys)

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