Programming The Jesse Livermore Market Key
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  • 1. Programming The “Livermore Market Key” By KH Tang
  • 2. 96 *(1+2*ThresholdPercent) 100 *(1+2*ThresholdPercent) Error with Simple Multiplication 120 120 method when calculating the Up and Down Pivot Point. 115.2 96 100 100 120 *(1-2*ThresholdPercent) Solution to handle the error: => UpTrendThreshold Calculation => DownTrend*(1+2*ThresholdPercent) DownTrendThreshold Calculation => UpTrend/(1+2*ThresholdPercent)
  • 3. Jesse Livermore Secret Market Key Flow Chart by KH Tang Program Start False First Bar ? True Initialization StateNo False StateNo False StateNo False StateNo False StateNo False =1? =2? =3? =4? =5? True True True True True Process Process Process Process Process Process StateNo 1 StateNo 2 StateNo 3 StateNo 4 StateNo 5 StateNo 6 Routine Routine Routine Routine Routine Routine UpTrend NatlRally SecRally SecReact NatlReact DnTrend Conditional Reset of NatRallyReset Flag and NatReactReset Flag Note: Short form used in the flow chart PP = PivotPoint Nat = Natural Sec = Secondary End Dn = Down React = Reaction
  • 4. Conditional Reset Initialization Parameters StateNo=1; InUpTrend AND InUpTrend=True; False NatReact < InDnTrend=False; {UpTrend/ (1+2*ThresholdPct)} UpTrend=C; ? NatRally=C; SecRally=C; True SecReact=C; NatReact=C; DnTrend=C; NatReactReset=True NatRallyReset=True; NatReactReset=True UpTrendPP=C; NatRallyPP=C; NatReactPP=C; DnTrendPP=C; InDnTrend AND False NatRally > {DnTrend* (1+2*ThresholdPct)} ? End True NatRallyReset=True End
  • 5. Process StateNo 1 (InUpTrend) True Price >= False LastPrice ? False Price > (InDnTrend AND UpTrend Price <DnTrendPP) ? False OR InUpTrend AND True Price < {UpTrend/ (1+2*ThresholdPct)} ? Price < (UpTrend/ False True (1 +ThresholdPct) ? True False NatReactReset OR Price<NatReactPP ? True True State No=1 (InUpTrend) State No = 6 (InDnTrend) StateNo= 5 (InNatReact) StateNo = 4 (InSecReact) InUpTrend=True InDnTrend = True NatReactReset=False SecReact = Price InDnTrend=False InUpTrend = False NatReact= Price UpTrendPP = UpTrend UpTrend=Price DnTrend = Price UpTrendPP = UpTrend UpTrendPP = UpTrend End
  • 6. Process StateNo 2 (InNatRally) True Price >= False LastPrice ? (InUpTrend AND (InDnTrend AND Price >UpTrendPP Price <DnTrendPP) False False OR OR InUDnTrend AND InUpTrend AND Price>DnTrend* Price < {UpTrend/ (1+2*ThresholdPct)} (1+2*ThresholdPct)} ? ? Price < False Price > (NatRally/ False True True NatRally (1 +ThresholdPct) ? ? True True NatReactReset OR False Price<NatReactPP ? True True StateNo = 2 (InNatRally) State No=1 (InUpTrend) State No = 6 (InDnTrend) StateNo= 5 (InNatReact) StateNo = 4 (InSecReact) NatRally = Price InUpTrend=True InDnTrend = True NatReactReset=False SecReact = Price InDnTrend=False InUpTrend = False NatReact= Price NatRallyPP = NatRally UpTrend=Price DnTrend = Price NatRallyPP = NatRally NatRallyPP = NatRally End
  • 7. Process StateNo 3 (InSecRally) True Price >= False LastPrice ? (InUpTrend AND (InDnTrend AND Price >UpTrendPP Price <DnTrendPP) False False OR OR InUDnTrend AND InUpTrend AND Price>DnTrend* Price < {UpTrend/ (1+2*ThresholdPct)} (1+2*ThresholdPct)} ? ? Price < False Price > True True SecRally/ False NatRally (1+ThresholdPct) ? ? True True False Price > Price < False SecRally NatReactPP ? ? True True StateNo = 3 (InSecRally) StateNo = 2 (InNatRally) State No = 1 (InUpTrend) State No = 6 (InDnTrend) StateNo = 5 (InNatReact) StateNo = 4 (InSecReact) SecRally = Price NatRally = Price InUpTrend = True InDnTrend = True NatReact = Price SecReact = Price InDnTrend = False InUpTrend = False UpTrend = Price DnTrend = Price End
  • 8. Process StateNo 4 (InSecReact) True Price >= False LastPrice ? (InUpTrend AND (InDnTrend AND Price >UpTrendPP Price <DnTrendPP) False False OR OR InUDnTrend AND InUpTrend AND Price>DnTrend* Price < {UpTrend/ (1+2*ThresholdPct)} (1+2*ThresholdPct)} ? ? Price > False SecReact* True True Price < False (1+ThresholdPct) NatReact ? ? True True False Price > Price < False NatRallyPP SecReact ? ? True True StateNo = 3 (InSecRally) StateNo = 2 (InNatRally) State No = 1 (InUpTrend) State No = 6 (InDnTrend) StateNo = 5 (InNatReact) StateNo = 4 (InSecReact) SecRally = Price NatRally = Price InUpTrend = True InDnTrend = True NatReact = Price SecReact = Price InDnTrend = False InUpTrend = False UpTrend = Price DnTrend = Price End
  • 9. Process StateNo 5 (InNatReact) True Price >= False LastPrice ? (InUpTrend AND (InDnTrend AND Price >UpTrendPP Price <DnTrendPP) False False OR OR InUDnTrend AND InUpTrend AND Price>DnTrend* Price < {UpTrend/ (1+2*ThresholdPct)} (1+2*ThresholdPct)} ? ? False Price > NatReact* Price < False True True (1+ThresholdPct) NatReact ? ? True True False NatRallyReset OR Price>NatRallyPP ? True StateNo = 3 (InSecRally) StateNo = 2 (InNatRally) State No = 1 (InUpTrend) State No = 6 (InDnTrend) StateNo= 5 (InNatReact) SecRally = Price NatRallyReset = False InUpTrend = True InDnTrend = False NatReact = Price NatReactPP = NatReact NatRally = Price InDnTrend = False InUpTrend = True NatReactPP = NatReact UpTrend = Price DnTrend = Price NatReactPP = NatReact End
  • 10. Process StateNo 6 (InDnTrend) True Price >= False LastPrice ? (InUpTrend AND Price < False Price >UpTrendPP DownTrend False OR ? InUDnTrend AND Price>DnTrend* (1+2*ThresholdPct)} True ? False Price > {DnTrend* True (1+ThresholdPct)} ? True False NatRallyReset OR Price>NatRallyPP ? True StateNo = 3 (InSecRally) StateNo = 2 (InNatRally) State No = 1 (InUpTrend) State No = 6 (InDnTrend) SecRally = Price NatRallyReset = False InUpTrend = True InDnTrend = True DnTrendPP = DnTrend NatRally = Price InDnTrend = False InUpTrend = False DnTrendPP = DnTrend UpTrend = Price DnTrend = Price DnTrendPP = DnTrend End
  • 11. Sample Chart
  • 12. In late 1939, Livermore's son, Jesse Jr., suggested "La guerre! C’est une chose trop grave pour la to his father that he write a book about his confier à des militaires." experiences and techniques in trading in the stock "War is too important to be left to the and commodity markets. The book was generals." completed and published in March 1940. It was - Georges Clemenceau (1841-1929): A French titled How To Trade In Stocks. ( Downloadable) journalist, physician and statesman. He served as Prime Minister from 1906 to 1909 and from In this short book, Jesse Livermore spent a great 1917 to 1920. deal of effort, more than 1/3 of the book, in explaining and illustrating this “Livermore Market Key” technique in details. Later in November 1940, he passed away… With the same token, it is suggested that:- Personal Finance matter is Too Important to be May be… just may be that… Who Knows? left to the Financial Advisors! May be he wanted to pass down this tool to the public to avoid personal financial crash due to the Thus, it is so serious that individual Must spend Stock Market Manipulation in the future? As it part of the time to learn and understand how surely would help those who believe and follow economy works! through his work. (See it for yourself from the charts on the next link.) The above flow-charts were proven to be programmable as the result shown in my blog: Stock Market Tools (6) - Livermore Market Key. Bless You KH Tang 24 Jan 2010