Who was Jesse Livermore (1877 - 1940) ?
Time Magazine described Jesse Livermore as the most fabulous living U.S. stock trader.
His progress from office boy to Wall Street legend - his trading lessons - his triumphs and disasters - is probably the most fascinating of any of Wall Street's stories. Even today, many stock and commodity traders owe Jesse Livermore a deep debt of gratitude for sharing his experiences in the book Reminiscences of a Stock Operator.
The techniques he made public have endured through many decades; his trading rules earned him millions of dollars.
Livermore response to those that desire success in the markets was as follows:
Note: This extract was published with the permission of Windsor Books, it can not be freely distributed.
Jesse Livermore used both fundamentals and technicals to profit in the markets. Livermore realised that he would have to learn his profession just as a doctor or engineer might.
Jesse Livermore is known to accumulate a fortune in the 1929/32 stock market crash. A reported $100 million dollars (in 1930's, this is huge). He did this by entering a trade when the market approached a critical determination point during the price trend, what he called a pivot point. At this point the trend would either re affirm it self as healthy (and continue) or not, thus a critical point in time in any trend. We at readtheticker.com use a method called Wyckoff 2.0 to determine Jesse Livermore pivot points. Read more through this site to learn more.
Here is what works in the market.
Back to topic ..
Here is a chart highlighting critical pivot points during the crash of 1929-32, or how Jesse Livermore made bank. Sure, fancy charts and tools he did not have, but we think in modern day times these are the pivot points Jesse Livermore would seek to profit from.
You can see the Dow Jones Industrials was in a very strong Wyckoff 2.0 'mark down' phase between Oct 1929 and July 1932, an investor need only apply readtheticker.com Hurst Cycle and Gann Angles to expose the true trend 'pivot points' to exploit for profit. Become a member and research the current market for Jesse Livermore 'pivot points'. Gann, Hurst and Wyckoff tools have worked for decades. The more things change, the more they stay the same.
Below are some of Jesse trading rules:
1) Nothing new ever occurs in the business of speculating or investing in securities and commodities.
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 in profit right from the start.
6) At long as a stock is acting right, and the market is right, do not be in a hurry to take profits.
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 buy a stock because it has had a big decline from its previous high.
10) Never sell a stock because it seems high-priced.
11) I become a buyer as soon as a stock makes a new high on its movement 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.
Wishful thinking must be banished.
14) Big movements take time to develop.
15) It is not good to be too curious about all the reasons behind price movements.
16) It is much easier to watch a few than many.
17) If you cannot make money out of the leading active issues, you are not going to make money out of the stock market as a whole.
18) The leaders of today may not be the leaders of two years from now.
19) Do not become completely bearish or bullish on the whole market because one stock in some particular group has plainly reversed its course from the general trend.
20) Few people ever make money on tips. Beware of inside information. If there was easy money lying around, no one would be forcing it into your pocket.
More here: Jesse Livermore, Investing for dummies
This is a promotional video, no matter it is a good video about Jesse Livermore
NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net
Investing Quote...
.."Without specific, clear, and tested rules, speculators do not have any real chance of success"..
Jesse Livermore
..“Successful speculation requires staying on top of changes in industries and companies that either create new industries or improve on existing industries. The majority of your profits will come from these two … The shrewdest traders throughout history all adapted the skill of reactionary change, as the market constantly presents new and different opportunities.”..
Bernard Baruch
.."A lie told often enough becomes the truth"..
Vladimir Lenin
.."To cause high prices, all the Fed will do will be to lower the re discount rate..., producing an expansion of credit and a rising stock market; then when, business men are adjusted to these conditions, it can check, prosperity in mid career by arbitrarily raising the rate of interest. It can cause the pendulum of a rising and falling market to swing gently back and forth by slight changes in the discount rate, or cause violent fluctuations by a greater rate variation and in either case it will possess inside information as to financial conditions and advance knowledge of the coming change, either up or down. This is the most dangerous advantage ever placed in the hands of a special privilege class by any Government that ever existed. The are private, conducted for the purpose of obtaining the greatest possible profits from the use of other people's money. They know in advance when to create panics to their advantage, and when to stop panic."...
Charles August Lindbergh Snr
.....“I measure what's going on, and I adapt to it. I try to get my ego out of the way. The market is smarter than I am so I bend.”..
Martin Zweig