In his 1940 book, "How to Trade in Stocks," Jesse L. Livermore gives
step-by-step guidance on reading market and stock behaviors, analyzing
market sectors, market timing, money management and emotional control.
Livermore said there are just a handful of times each year when he would be active--near the intermediate-term turning points in the market. Other than that, he let his account his idle, either holding his winners, or patiently sitting in cash, preparing for the big swing when the market changed course.
Jesse Livermore's Rules
Jesse Livermore's Rules For Stock Trading
1. Nothing new occurs in the business of speculating or investing.
2. Money cannot consistently be made trading every day or every week during the year.
3. Don't trust your own opinion and back your judgment until the action of the market itself confirms your opinion.
4. Markets are never wrong; opinions often are.
5. The real money made in speculating has been in commitments showing a profit right from the start.
6. As long as a stock is acting right, and the material is right, do not be in a hurry to take a profit.
7. One should never permit speculative ventures to run into investments.
8. The money lost by speculation alone is small compared with the gigantic sums lost by so-called investors who have let their investments ride.
9. Never sell a stock because it seems high-priced.
10. Never buy a stock because it has had a big decline from its previous high.
11. I become a buyer as soon as a stock makes a new high
on it's movements after having had a normal reaction.
12. Never average losses.
13. The human side of every person is the greatest enemy of the average investor or speculator.
14. It is not well to be too curious about the reasons behind price movements.
15. Wishful thinking must be banished.
16 Big movements take time to develop.
17. It is much easier to watch a few than many.
18. If you cannot make money out of the leading active issues, you are not going to make money out of the market as a whole.
19. The leaders of today may not be the leaders two years from now.
20. Do not become completely bearish or bullish on the market because one stock in a particular group has plainly reversed it's course from the general market trend.
21. Few people ever make money on tips. Beware of inside information. If there was any easy money lying around, no one would force it into your pocket.
[MORE RULES APPEAR AFER
THE ADVERTISMENTS]
1. Nothing new occurs in the business of speculating or investing.
2. Money cannot consistently be made trading every day or every week during the year.
3. Don't trust your own opinion and back your judgment until the action of the market itself confirms your opinion.
4. Markets are never wrong; opinions often are.
5. The real money made in speculating has been in commitments showing a profit right from the start.
6. As long as a stock is acting right, and the material is right, do not be in a hurry to take a profit.
7. One should never permit speculative ventures to run into investments.
8. The money lost by speculation alone is small compared with the gigantic sums lost by so-called investors who have let their investments ride.
9. Never sell a stock because it seems high-priced.
10. Never buy a stock because it has had a big decline from its previous high.
11. I become a buyer as soon as a stock makes a new high
on it's movements after having had a normal reaction.
12. Never average losses.
13. The human side of every person is the greatest enemy of the average investor or speculator.
14. It is not well to be too curious about the reasons behind price movements.
15. Wishful thinking must be banished.
16 Big movements take time to develop.
17. It is much easier to watch a few than many.
18. If you cannot make money out of the leading active issues, you are not going to make money out of the market as a whole.
19. The leaders of today may not be the leaders two years from now.
20. Do not become completely bearish or bullish on the market because one stock in a particular group has plainly reversed it's course from the general market trend.
21. Few people ever make money on tips. Beware of inside information. If there was any easy money lying around, no one would force it into your pocket.
[MORE RULES APPEAR AFER
THE ADVERTISMENTS]
More Livermore Stock Rules (part 3)
PART 3 JESSE LIVERMORE'S STOCK TRADING TIPS
Stand aside from a position, knowing you have taken a position.
Develop a trading plan for each potential situation you may face.
Do not look at quotes during the day.
Do not concentrate on break-even levels when you are losing.
Don't liquidate a winner to keep a loser.
Develop and maintain an exit plan. Follow this plan with rigid discipline.
Sustain your patience. Big movements take time to develop.
Don't be overly curious about the rationale behind a move. The market has a reason, you just don't know it yet.
SEE MORE RULES AFTER THE ADVERTISMENTS
Stand aside from a position, knowing you have taken a position.
Develop a trading plan for each potential situation you may face.
Do not look at quotes during the day.
Do not concentrate on break-even levels when you are losing.
Don't liquidate a winner to keep a loser.
Develop and maintain an exit plan. Follow this plan with rigid discipline.
Sustain your patience. Big movements take time to develop.
Don't be overly curious about the rationale behind a move. The market has a reason, you just don't know it yet.
SEE MORE RULES AFTER THE ADVERTISMENTS
LIVERMORE'S TRADE TACTICS Part 2
MORE LIVERMORE TRADING TACTICS:
JESSE LIVERMORE'S STOCK RULES (Part 2)
These are more of Jesse Livermore's trading rules as of 1923. Most come from the book Reminiscences of a Stock Operator which was published in 1923, but were actually compiled from a series of magazine articles in years prior to 1923. In later years, Livermore further developed and refined his trading rules and techniques (see other rules on this blog)
The speculator's chief enemies are always boredom from within.
A man must believe in himself and his judgment if he expects to make a living at this game.
Bulls and bears make money, but pigs get slaughtered.
Use money management at all times.
Establish your trading plan before the markets open.
Detail out your plan for each trade.
Establish entry and exit points and understand risk reward rations.
Accept small losses as part of the game if you want to win.
Trade markets from the short side.
Stand aside from a position, knowing you have taken a position.
MORE JESSE LIVERMORE RULES/TACTICS APPEAR
FOLLOWING THE ADVERTISEMENT (continues below)
JESSE LIVERMORE'S STOCK RULES (Part 2)
These are more of Jesse Livermore's trading rules as of 1923. Most come from the book Reminiscences of a Stock Operator which was published in 1923, but were actually compiled from a series of magazine articles in years prior to 1923. In later years, Livermore further developed and refined his trading rules and techniques (see other rules on this blog)
The speculator's chief enemies are always boredom from within.
A man must believe in himself and his judgment if he expects to make a living at this game.
Bulls and bears make money, but pigs get slaughtered.
Use money management at all times.
Establish your trading plan before the markets open.
Detail out your plan for each trade.
Establish entry and exit points and understand risk reward rations.
Accept small losses as part of the game if you want to win.
Trade markets from the short side.
Stand aside from a position, knowing you have taken a position.
MORE JESSE LIVERMORE RULES/TACTICS APPEAR
FOLLOWING THE ADVERTISEMENT (continues below)
LIVERMORE'S TRADE SECRETS PART 1
JESSE LIVERMORE'S STOCK RULES (Part 1)
These are some of Jesse Livermore's trading rules as of 1923. Most come from the book Reminiscences of a Stock Operator which was published in 1923, but were actually compiled from a series of magazine articles in years prior to 1923. In later years, Livermore further developed and refined his trading rules and techniques (see other rules on this blog)
Never act on tips.
Use a system and don't deviate from it.
Never buy a stock because it has had a big decline from its previous high.
If a stock doesn't act right don't touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit.
Don't blame the market for your losses.
Never add to a losing position. A losing position means you were wrong.
Stocks are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don't make a second unless the first shows you a profit.
Always sell what shows you a loss and keep what shows you a profit.
Don't argue with the tape. Do not seek to lure the profit back. Quit while the quitting is good--and cheap.
There is only one side to the stock market; and it is not the bull side or the bear side but the right side.
These are some of Jesse Livermore's trading rules as of 1923. Most come from the book Reminiscences of a Stock Operator which was published in 1923, but were actually compiled from a series of magazine articles in years prior to 1923. In later years, Livermore further developed and refined his trading rules and techniques (see other rules on this blog)
Never act on tips.
Use a system and don't deviate from it.
Never buy a stock because it has had a big decline from its previous high.
If a stock doesn't act right don't touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit.
Don't blame the market for your losses.
Never add to a losing position. A losing position means you were wrong.
Stocks are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don't make a second unless the first shows you a profit.
Always sell what shows you a loss and keep what shows you a profit.
Don't argue with the tape. Do not seek to lure the profit back. Quit while the quitting is good--and cheap.
There is only one side to the stock market; and it is not the bull side or the bear side but the right side.
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