Jesse Livermore made and lost multiple fortunes trading through the 1907 panic, the 1929 crash, and every boom in between. His entire system fits in 14 rules.
Before you enter:
1. Is the market trending in your favor?
2. Is this stock a leader?
3. Has price confirmed your thesis?
4. Is timing right?
5. Do you have a stop loss?
If any answer is no, do not enter. Wait.
While in the trade:
6. Scale in, never all at once
7. Let winners run
8. Cut losses fast
When to stay out:
9. No setup? Do nothing
10. Ignore tips
11. Never average down
Mindset:
12. The market is never wrong
13. Fear losses, let hope ride with winners
14. Review every single trade
Most traders lose because they do the opposite of every one of these rules. They chase. They average down. They hold losers and sell winners. They trade every day.
Livermore's biggest profits came from sitting tight. Not from trading. From waiting.
"It never was my thinking that made the big money for me. It always was my sitting."
Before you enter:
1. Is the market trending in your favor?
2. Is this stock a leader?
3. Has price confirmed your thesis?
4. Is timing right?
5. Do you have a stop loss?
If any answer is no, do not enter. Wait.
While in the trade:
6. Scale in, never all at once
7. Let winners run
8. Cut losses fast
When to stay out:
9. No setup? Do nothing
10. Ignore tips
11. Never average down
Mindset:
12. The market is never wrong
13. Fear losses, let hope ride with winners
14. Review every single trade
Most traders lose because they do the opposite of every one of these rules. They chase. They average down. They hold losers and sell winners. They trade every day.
Livermore's biggest profits came from sitting tight. Not from trading. From waiting.
"It never was my thinking that made the big money for me. It always was my sitting."
