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.