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Jesse Livermore Trading Rules - His Top Stock Market Tips

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Jesse Livermore Trading Rules - His Top Stock Market Tips

  1. 1. 1. Jesse Livermore “It’s not the thinking that makes the money; it’s the sitting.” By Penny Stock Whizzkid
  2. 2. • Jesse was truly gifted, with a photographic memory when it came to numbers. He actually performed three years of mathematics in one year of school during his youth. • “ There is nothing new on Wall street or in stock speculation. What was happened in the past will happen again and again and again. This is because human nature does not change, and it is human emotion that always gets in the way of human intelligence.“ • Noticed that most people lost money in the stock market because they acted randomly, did not act on rules or a predefined plan, and did not put forth the required study that the market and its actions required.
  3. 3. Jesse Livermore’s lessons: Impatience • Livermore would become impatient and thought he had to trade. Impatience in the market usually leads to making impulse trades, which rarely leads to profitable success. Don’t overtrade • Do nothing when you don’t need to do anything.
  4. 4. • Understand the general trend of the market. Move with the market; don’t fight against it. • Buy stocks hitting new highs in price as they pass through certain resistance areas. • Cut your losses short. Protect yourself from a wrong decision at no more that a 10% loss. Sell drifting stocks, as their inaction is an opportunity cost.
  5. 5. • Let your profits ride, as your strongest stocks keep moving up or down. Be patient with stocks that are acting correctly. The big money is made by sitting tight. • Leading stocks in leading and strong industries is where your concentration should be. • Experience – learn from your experiences and errors.

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