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How to Trade In Stocks
The Success Secrets of a Stock Market Legend Jesse Livermore was a loner, an individualist-and the most successful stock trader who ever lived. Written shortly before his death in 1940, How to Trade Stocks offered traders their first account of that famously tight-lipped operator's trading system. Written in Livermore's inimitable, no-nonsense style, it interweaves fascinating autobiographical and historical details with step-by-step guidance on:
272 pages, Paperback
First published January 1, 1940
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Displaying 1 - 30 of 84 reviews
June 7, 2011
I would have rated this higher if I had not already read Reminisences of a Stock Operator. There's very little in this book that is not presented there, and I think the presentation there is more vivid. The main thing that is new is some actual detail about approaching Livermore's pivot points, including some actual examples. Unforturnately, however, these examples derived from data charts that were basically unreadable on my Kindle. Still, I got the basic idea of how he used them. The specifics are not as important to me anyway, since they are designed for Stocks and not for Forex.
The big disappointment in the edition I read was the amount of time spent promoting some software developed so the reader could use the Livermore system for JUST $49.95 per month. I find this especially funny in a book that was about the lone wolf: a guy who said never to follow tips, to do the homework yourself, and to draw your own conclusions. And now, having read that, if you don't want to listen to any of his advice and just want to get rich quick, you can buy our new software that takes all the work out of it, and as such violates the most basic of Livermore's principles.
The other thing I found out was the sad circumstances of his life. He apparently had recurring bouts of depression, and eventually lost, putting a bullet into his brain. I think this is a pretty stark reminder of the limited usefulness of unimaginable earning power.
The big disappointment in the edition I read was the amount of time spent promoting some software developed so the reader could use the Livermore system for JUST $49.95 per month. I find this especially funny in a book that was about the lone wolf: a guy who said never to follow tips, to do the homework yourself, and to draw your own conclusions. And now, having read that, if you don't want to listen to any of his advice and just want to get rich quick, you can buy our new software that takes all the work out of it, and as such violates the most basic of Livermore's principles.
The other thing I found out was the sad circumstances of his life. He apparently had recurring bouts of depression, and eventually lost, putting a bullet into his brain. I think this is a pretty stark reminder of the limited usefulness of unimaginable earning power.
July 27, 2014
This is a must read book for any trader attempting to make it big. Jesse Livermore, in many ways, is the complete opposite of financial role models like Warren Buffet. His take on the stock market is like no other. After reading the book, you realize it wasn't luck that was on Livermore's side but his self-discipline to be a better trader.
This book gives deep thoughtful insight I have yet to come across in any other book. There is more to this book than just the financial advice as Livermore provides an example to live a successful life. I duly recommended this book to anyone on the path to become a great trader. One of the most useful books I have read because of the opposing perspective it provides from the norm.
This book gives deep thoughtful insight I have yet to come across in any other book. There is more to this book than just the financial advice as Livermore provides an example to live a successful life. I duly recommended this book to anyone on the path to become a great trader. One of the most useful books I have read because of the opposing perspective it provides from the norm.
January 2, 2016
Really, who would take seriously the trading system of a guy who lost the lot at least five times, and ended up eating a bullet? So what if he made six fortunes, when he lost five of them. Just goes to show there is no system to 'beat' the market.
As for the book itself, some poor editing, inconsistent trading strategies (he wants the trade to go right from day one, but then "never tried to catch tops or bottoms". And the so-called software that was in development seems to be nonexistent.
As for the book itself, some poor editing, inconsistent trading strategies (he wants the trade to go right from day one, but then "never tried to catch tops or bottoms". And the so-called software that was in development seems to be nonexistent.
This entire review has been hidden because of spoilers.
January 4, 2021
This is a kind of odd book. Very little of the edition that I read was Livermore's actual book, which I'm guessing was originally little more than a pamphlet that he wrote at his son's urging.
The Livermore text is padded with a lot of reiterating by the editor, and what amounts to a second, longer book, of the editor putting the 'lessons' into a coherent system of sorts, or maybe not system but lessons the editor thinks are important.
It's not until you get to the very fluffy end of the book that has some biographical details about Livermore and a lot of pictures that you get information like, here is a picture of Livermore "once again at Bankruptcy court, he always paid all of his creditors once he got back on his feet even though legally he didn't have to."
What exactly were the reasons he went bankrupt so often? Was it leaving his method of trading behind, or was there something in the way he traded that led to massive explosions along with huge success?
Not really sure because everything about Livermore in this book reads more like hagiography than a realistic appraisal, which maybe isn't the point of the book, but since it's so heavy on the 'interpretation' of the editor it would seem like this might be important.
And I hate to make this criticism, because if a book has some value in it and the author has other services that can make putting into action something you learn in a book then I don't see any reason why they can't hawk their own products in the book. Usually if a book has value the reader can probably figure out how to use the information without the extra 'upsells', but in this book I started to get the feeling that while there wasn't a lot of 'hard-selling' the purpose of the book was more to introduce the world to the software the editor had created to help spot the sorts of trades Livermore apparently liked, and to paper-trade them to get practice.
It's not that there isn't probably good advice in the book, but it was a little too fanboy, and I probably wouldn't have even noticed that if it weren't for all the pictures at the end of the book whose captions sort of added some darkness to the earlier all riches all the time storyline.
So why is this an odd book? It was written in 1940, apparently at one of his son's (both of his sons?) pushing . From what I can gather, at least one of son's was very troubled, and ran into a lot of problems in life. So this very secretive trader who shorted the market leading into the great depression and had a net worth of around a billion dollars in today's money after the stock market crashed (that's just added there to give some background on why a book by Livermore might be of interest to people), finally decided to spill it all about how he traded.
Ok, that's not so weird, he's getting old, let's share the information with people. But what's a little odd is that soon after writing this book he went on to shoot himself in the head, which I don't know if this book was a last attempt to get some meaning out of life, or an attempt to stave off the depression that apparently followed him through life, or maybe part of his undoing, but something seems a little off.
I might have given this four stars, because there was some good meta-advice in the book about how to look at problems and seeing through the accepted ways the masses were moving but the last chapter containing his Master-Key System was so convoluted and bordering on crazy town that I had to knock off a star and wondered why the editor didn't try to explain this in way that wasn't so painfully difficult to follow the logic of (oh, right my guess would be it would be a reason to buy his software to have something to figure this out for you). But from what I could gather from the Master-Key System it was basically a way to create lines of support and resistance using chart prices in column form versus the accepted way now of charts. But following the instructions on how to create this columns made reading 19th century German philosophy seem easy and straight forward.
The Livermore text is padded with a lot of reiterating by the editor, and what amounts to a second, longer book, of the editor putting the 'lessons' into a coherent system of sorts, or maybe not system but lessons the editor thinks are important.
It's not until you get to the very fluffy end of the book that has some biographical details about Livermore and a lot of pictures that you get information like, here is a picture of Livermore "once again at Bankruptcy court, he always paid all of his creditors once he got back on his feet even though legally he didn't have to."
What exactly were the reasons he went bankrupt so often? Was it leaving his method of trading behind, or was there something in the way he traded that led to massive explosions along with huge success?
Not really sure because everything about Livermore in this book reads more like hagiography than a realistic appraisal, which maybe isn't the point of the book, but since it's so heavy on the 'interpretation' of the editor it would seem like this might be important.
And I hate to make this criticism, because if a book has some value in it and the author has other services that can make putting into action something you learn in a book then I don't see any reason why they can't hawk their own products in the book. Usually if a book has value the reader can probably figure out how to use the information without the extra 'upsells', but in this book I started to get the feeling that while there wasn't a lot of 'hard-selling' the purpose of the book was more to introduce the world to the software the editor had created to help spot the sorts of trades Livermore apparently liked, and to paper-trade them to get practice.
It's not that there isn't probably good advice in the book, but it was a little too fanboy, and I probably wouldn't have even noticed that if it weren't for all the pictures at the end of the book whose captions sort of added some darkness to the earlier all riches all the time storyline.
So why is this an odd book? It was written in 1940, apparently at one of his son's (both of his sons?) pushing . From what I can gather, at least one of son's was very troubled, and ran into a lot of problems in life. So this very secretive trader who shorted the market leading into the great depression and had a net worth of around a billion dollars in today's money after the stock market crashed (that's just added there to give some background on why a book by Livermore might be of interest to people), finally decided to spill it all about how he traded.
Ok, that's not so weird, he's getting old, let's share the information with people. But what's a little odd is that soon after writing this book he went on to shoot himself in the head, which I don't know if this book was a last attempt to get some meaning out of life, or an attempt to stave off the depression that apparently followed him through life, or maybe part of his undoing, but something seems a little off.
I might have given this four stars, because there was some good meta-advice in the book about how to look at problems and seeing through the accepted ways the masses were moving but the last chapter containing his Master-Key System was so convoluted and bordering on crazy town that I had to knock off a star and wondered why the editor didn't try to explain this in way that wasn't so painfully difficult to follow the logic of (oh, right my guess would be it would be a reason to buy his software to have something to figure this out for you). But from what I could gather from the Master-Key System it was basically a way to create lines of support and resistance using chart prices in column form versus the accepted way now of charts. But following the instructions on how to create this columns made reading 19th century German philosophy seem easy and straight forward.
July 31, 2013
Interesting book, centered around Livemore's trading system. The system focuses purely on a momentum based strategy revolving around charting techniques. Little to do with Ghaham / Dodd style investment analysis (Livemore actually discourages this style of investing). Since I prefer financial statement analysis to charting (sorry, voodoo in my mind) I wasn't pulled in by the various tops, bottoms, shoulders, and breakout points.
That said, the understanding of momentum, both in terms of industries as well as individual stocks was very enlightening.
Regardless of my opinion, Livemore was extremely successful at what he did and his life was unique both in terms of his work as well as how he handled his fortunes.
That said, the understanding of momentum, both in terms of industries as well as individual stocks was very enlightening.
Regardless of my opinion, Livemore was extremely successful at what he did and his life was unique both in terms of his work as well as how he handled his fortunes.
July 11, 2017
I find it fascinating that a book on trading written in 1940 still applies today. To quote Jesse Livermore, "There is nothing new on Wall Street or in stock speculation. What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion, solidly built into human nature, that always gets in the way of human intelligence." This book takes a peek at how one might ride the many human emotion waves in the stock market right before they crash out. I am sure the exact methodologies are more sophisticated and nuanced today, but principles will probably apply.
April 7, 2025
On one hand, as a value investor, momentum investing reads like witchcraft. But upon close inspection, I do see their merits, which steam from the simple fact of information asymmetry. Consider this:
Announcement of the iPhone
When the iPhone was first announced:
Stage 1: it was obvious to the technological crowd that it will change the world (yes, the news agencies also ran stories on the iPhone, but not everyone reads news. Even if they do, not everyone knows the advancement it represents).
Stage 2: Tech crowd begins to embrace the technology alongside with Apple releasing newer models of iPhone every year. Then, the tech adjacent people joined in.
Stage 3: With more tech adjacent people joining in, more and more people know the existence of the iPhone. Then widespread adoption begins. By this stage, just about everyone knows the existence of the iPhone.
The reality is that the merit of the iPhone has been commenced since stage 1. Yet, the crowd won’t embrace it because the information is not immediately available to everyone due to information asymmetry, until it becomes available to more people. Thus momentum would always occur for any trend, whether it be consumer technology or stocks.
On the other hand, due to the delay of information, by the time information reaches the entire crowd, the fundamental message, delayed for so long, might not be the reality anymore. Which renders, in the financial world, a stock once overvalued, would be much, much more overvalued than the fundamentals. Or the reverse - if a stock is undervalued, it would be much, much more undervalued than the fundamentals.
Which brings me back to this book. The first point the author drew was that money making in the financial world will not happen overnight. Rather, it takes patience - a lot of patients. I find it rather amusing that the author, being the godfather of momentum investing, actually believes in the same thing the value investing crowd believes in - which is very infrequent trading. The author wrote:
One of the hard things for value investors to do is finding the strike price. Adding to the problem is such an abstract concept: how big of a margin is really big enough to be margin of safety? Reading this book, my main insight on the topic is that: a lot.
In addition, the market will always be either overvalued or undervalued on a certain stock. I emphasized "certain" because macro forces and micro forces are completely different things. Just because the macro environment behaves a certain way, it does not translate into any individual stocks. Always avoid trading on the macro (since it’s so hard to translate into micro level), and always trade on the micro fundamentals. The author also wrote about it:
In essence, momentum investing really bridges the gap value investing misses, which is when to pull the trigger. At most the value investing crowd preaches is that you purchase a security when the yield of said security is higher than what you have on hand. But momentum investing tells you that you purchase when the said security is insanely cheap - so cheap that (I’m going to do a very simplified interpretation on the author’s extensive writing on “pivotal moments”) it’d be silly not to buy. Because due to informational asymmetry, a security, especially ones that are traded frequently enough (unlike assets like real estate that only trades once in a blue moon), will be bound to be either too cheap or too expensive at one point in time. Do not have the FOMO and buy into securities that are fairly priced. Always look into insanely bargain prices (because they will eventually show themselves). On the way out as well. The market will eventually give you a price that’d be silly not to get out. Do not get out when the security is fairly priced (unless there are securities that are insanely cheap and you do not have the firing power to purchase those cheap securities). The author wrote:
Essentially, just be patient. But not just that, the author advocates keeping a trading journal. The author wrote:
Things do not go down (or up) in a straight line. It takes days, weeks, months or years even decades to play out. But we live minute to minute. The beauty of having a journal is that we can seek through our own day-to-day basis. Our feeling of FOMO which makes us buy certain securities, losing our dry powder along the way, only to see bargain security come out much later on. A journal gives us not just ideas for the future, but really safeguard ourselves from ourselves with as much confirmation bias in check as possible.
Phillips Fisher and Benjamin Graham lived and told their tale; Jesse Livermore committed suicide. Yet, I still think this is a wonderful book even for the value investor crowd. The point here is not to be the crowd, but rather understand how the crowd behave and adjust to their behavior, while still retaining the much needed contrarian fundamental analysis.
Announcement of the iPhone
When the iPhone was first announced:
Stage 1: it was obvious to the technological crowd that it will change the world (yes, the news agencies also ran stories on the iPhone, but not everyone reads news. Even if they do, not everyone knows the advancement it represents).
Stage 2: Tech crowd begins to embrace the technology alongside with Apple releasing newer models of iPhone every year. Then, the tech adjacent people joined in.
Stage 3: With more tech adjacent people joining in, more and more people know the existence of the iPhone. Then widespread adoption begins. By this stage, just about everyone knows the existence of the iPhone.
The reality is that the merit of the iPhone has been commenced since stage 1. Yet, the crowd won’t embrace it because the information is not immediately available to everyone due to information asymmetry, until it becomes available to more people. Thus momentum would always occur for any trend, whether it be consumer technology or stocks.
On the other hand, due to the delay of information, by the time information reaches the entire crowd, the fundamental message, delayed for so long, might not be the reality anymore. Which renders, in the financial world, a stock once overvalued, would be much, much more overvalued than the fundamentals. Or the reverse - if a stock is undervalued, it would be much, much more undervalued than the fundamentals.
Which brings me back to this book. The first point the author drew was that money making in the financial world will not happen overnight. Rather, it takes patience - a lot of patients. I find it rather amusing that the author, being the godfather of momentum investing, actually believes in the same thing the value investing crowd believes in - which is very infrequent trading. The author wrote:
... there are only a few times a year, possibly four or five, when you should allow yourself to make any commitment at all. In the interims you are letting the market shape itself for the next big movement.
One of the hard things for value investors to do is finding the strike price. Adding to the problem is such an abstract concept: how big of a margin is really big enough to be margin of safety? Reading this book, my main insight on the topic is that: a lot.
... after forming an opinion with respect to a certain stock —do not be too anxious to get into it. Wait and watch the action of that stock for confirmation to buy. Have a fundamental basis to be guided by… Real movements do not end the day they start. It takes time to complete the end of a genuine movement… “Behind these major movements is an irresistible force.” That is all one needs to know. It is not good to be too curious about all the reasons behind price movements. You risk the danger of clouding your mind with non-essentials. Just recognize that the movement is there and take advantage of it by steering your speculative ship along with the tide. Do not argue with the condition, and most of all, do not try to combat it.
In addition, the market will always be either overvalued or undervalued on a certain stock. I emphasized "certain" because macro forces and micro forces are completely different things. Just because the macro environment behaves a certain way, it does not translate into any individual stocks. Always avoid trading on the macro (since it’s so hard to translate into micro level), and always trade on the micro fundamentals. The author also wrote about it:
Another mistake I made was to permit myself to turn completely bearish or bullish on the whole market, because one stock in some particular group had plainly reversed its course from the general market trend... when you clearly see a move coming in a particular group, act upon it. But do not let yourself act in the same way in some other group, until you plainly see signs that the second group is in a position to follow suit. Have patience and wait.
In essence, momentum investing really bridges the gap value investing misses, which is when to pull the trigger. At most the value investing crowd preaches is that you purchase a security when the yield of said security is higher than what you have on hand. But momentum investing tells you that you purchase when the said security is insanely cheap - so cheap that (I’m going to do a very simplified interpretation on the author’s extensive writing on “pivotal moments”) it’d be silly not to buy. Because due to informational asymmetry, a security, especially ones that are traded frequently enough (unlike assets like real estate that only trades once in a blue moon), will be bound to be either too cheap or too expensive at one point in time. Do not have the FOMO and buy into securities that are fairly priced. Always look into insanely bargain prices (because they will eventually show themselves). On the way out as well. The market will eventually give you a price that’d be silly not to get out. Do not get out when the security is fairly priced (unless there are securities that are insanely cheap and you do not have the firing power to purchase those cheap securities). The author wrote:
Just as markets in time will give you a positive tip when to get in—if you have patience to wait—they will just as surely give you a tip-off when to get out. “Rome was not built in a day,” and no real movement of importance ends in one day or in one week. It takes time for it to run its logical course.
Essentially, just be patient. But not just that, the author advocates keeping a trading journal. The author wrote:
Familiarize yourself with a stock, or different groups of stocks, and if you figure the timing element correctly in conjunction with your records, sooner or later you will be able to determine when a major move is due. If you read your records correctly, you can pick the leading stock in any group. You must, I repeat, keep your own records. You must put down your own figures. Don’t let anyone else do it for you. You will be surprised how many new ideas you will formulate in so doing; ideas which no one else could give you, because they are yours.
Things do not go down (or up) in a straight line. It takes days, weeks, months or years even decades to play out. But we live minute to minute. The beauty of having a journal is that we can seek through our own day-to-day basis. Our feeling of FOMO which makes us buy certain securities, losing our dry powder along the way, only to see bargain security come out much later on. A journal gives us not just ideas for the future, but really safeguard ourselves from ourselves with as much confirmation bias in check as possible.
Phillips Fisher and Benjamin Graham lived and told their tale; Jesse Livermore committed suicide. Yet, I still think this is a wonderful book even for the value investor crowd. The point here is not to be the crowd, but rather understand how the crowd behave and adjust to their behavior, while still retaining the much needed contrarian fundamental analysis.
January 10, 2022
I'm a big fan of Jesse Livermore, and there was a bit of material in here that I'd not read before. However, I do take issue with some of the charts being over 20 years old, and not presented in a way that makes them legible. There was also a great deal of repetition. Perhaps it was well-intentioned, but it felt like it was there to pad out the contents.
October 22, 2013
A Classic! Jesse Livermore's contribution to investors the world over was "The Pivotal Point." The point in the chart where a confirmation for a new trend has begun. Jesse stated: "I never benefited much from a move if I did not get in at somewhere near the beginning of that move."
August 3, 2009
Learn the golden rules of stock trading, but don't forget them when you start to sweat! Another must read!
April 14, 2015
Learn from the legend!
May 12, 2016
Jesse Livermore is like a wonder to me, but this book clearly shows that he was best talented in Trading stocks.
August 30, 2015
Nowhere near reminiscences of a stock operator - much much superior book.
September 8, 2015
See my review here: How to Trade in Stocks
November 22, 2015
Good book
March 26, 2016
Growth Trader's bible, and easy to recognize who Influenced Bill O'Neil of IBD.
April 22, 2016
Read reminisces of a stock operator way back 88 or 89. this is a great review. like the pivot points myself.
May 28, 2018
About a year ago, I kept seeing twitter traders mentioning Jesse Livermore (JL). I have this personal heuristic that, when I hear two independent source, mention some issue or person, I’ll look into it immediately, because there’s usually something worth investigating. Same with JL. My heuristic got validated, because JL really is a guy worth looking into.
JL was an early 20th century Wall Street speculator who was wildly successful in his field, and his field only. This book tries to uncover his secrets, mainly on the analytical side; JL didn’t do much active day trading. I’ve often heard that only 2% of traders or less make bigger gains than the market, insider trading included. But some people really manage to outwit the market, either by chance (say, if one throws a dice 10 million times, there will likely be a sequences of throwing 10 sixes in a row) or some analytical method which had not been uncovered by anyone else before. It seems JL pulled off the latter.
Most of JL’s success depends on him having been a particular personality type: intelligent, controlled, private, diligent, disciplined and hyper-focused on his work and improving himself constantly. The Jesse Livermore method also revolved about common sense: study your securities/stocks for a long time before trading, only enter a market after it breaks resistance on the upward, get out if the market moves over 10% downward (if a trade goes wrong, do not argue, just get out immediately – you were wrong, end of story), collect your own data and do your own research, do not act on tips from others, etc., etc. I think many traders will learn these things quickly – because if you don’t, you will lose your money…
The critique I have of this book is about length and format. It’s way too short – which is not bad necessarily, especially regarding trading books! – but there must have been more info available about Livermore. The book is also an editorial mess, organized like a notebook – chapters are repetitive in content, some chapters read like marketing for some software tool “THE LIVERMORE METHOD”, some chapters read like they’ve been written by different writers. I can totally see why some people would be annoyed by that. Also, I doubt contemporary markets haven’t priced in JL’s trading system; what worked in the 1910s-30s might not work today. JL would agree with that assessment, he would argue that Livermore method is about constant improvement of analytical skills, not copying someone else blindly.
However, I liked reading the book. JL was a colorful character and had a great, varied life; he went from rags to riches, yet his mega success ended in personal tragedy. HBO should make a series about this guy and the Wall Street era in which he lived.
JL was an early 20th century Wall Street speculator who was wildly successful in his field, and his field only. This book tries to uncover his secrets, mainly on the analytical side; JL didn’t do much active day trading. I’ve often heard that only 2% of traders or less make bigger gains than the market, insider trading included. But some people really manage to outwit the market, either by chance (say, if one throws a dice 10 million times, there will likely be a sequences of throwing 10 sixes in a row) or some analytical method which had not been uncovered by anyone else before. It seems JL pulled off the latter.
Most of JL’s success depends on him having been a particular personality type: intelligent, controlled, private, diligent, disciplined and hyper-focused on his work and improving himself constantly. The Jesse Livermore method also revolved about common sense: study your securities/stocks for a long time before trading, only enter a market after it breaks resistance on the upward, get out if the market moves over 10% downward (if a trade goes wrong, do not argue, just get out immediately – you were wrong, end of story), collect your own data and do your own research, do not act on tips from others, etc., etc. I think many traders will learn these things quickly – because if you don’t, you will lose your money…
The critique I have of this book is about length and format. It’s way too short – which is not bad necessarily, especially regarding trading books! – but there must have been more info available about Livermore. The book is also an editorial mess, organized like a notebook – chapters are repetitive in content, some chapters read like marketing for some software tool “THE LIVERMORE METHOD”, some chapters read like they’ve been written by different writers. I can totally see why some people would be annoyed by that. Also, I doubt contemporary markets haven’t priced in JL’s trading system; what worked in the 1910s-30s might not work today. JL would agree with that assessment, he would argue that Livermore method is about constant improvement of analytical skills, not copying someone else blindly.
However, I liked reading the book. JL was a colorful character and had a great, varied life; he went from rags to riches, yet his mega success ended in personal tragedy. HBO should make a series about this guy and the Wall Street era in which he lived.
September 26, 2023
The book itself is worth reading and traders/investors surely benefit from it, regardless of the fact that it was written in the early days of the market in 1940. History tends to repeat itself.
Notes from the book: (Additional notes from books that have already been written about Jesse Livermore)
1- When a stock starts sliding downward, no one can tell how far it will go. Nor can anyone guess
the ultimate top on a stock in a broad upward movement.
2- Never buy a stock because it has had a big decline from its previous high. The likelihood is that the decline is based on a very good reason. That stock may still be selling at an extremely high price if the current level seems low. Try to forget its past high range and study it on the basis
of the formula which combines timing and price.
3- It is foolhardy to make a second trade if your first trade shows you a loss.
4- There are only a few times a year, possibly four or five when you should allow yourself to make any commitment at all. In the interims, you are letting the market shape itself for the next big movement.
5- Keep in mind that brokers sometimes innocently become the undoing of many speculators. Brokers are in the business to make commissions. They cannot make commissions unless customers trade. TI1c more trade, the more commissions. The speculator wants to trade and the
broker not only is willing but too often encourages over-trading. The uninformed speculator regards the broker as his friend and is soon over-trading.
6- "Rome was not built in a day," and no real movement of importance ends in one day or in one
week. It takes time for it to run its logical course. It is significant that a large part of a market movement occurs in the last forty-eight hours of a play, and that is the most important time to be in it.
7- Whenever the market does not act right or in the way it should is reason enough for you to
change your opinion and change it immediately.
Remember: there is always a reason for a stock acting the way it does. But also remember: the chances are that you will not become acquainted with that reason until some time in the future when it is too late to act on it profitably.
Notes from the book: (Additional notes from books that have already been written about Jesse Livermore)
1- When a stock starts sliding downward, no one can tell how far it will go. Nor can anyone guess
the ultimate top on a stock in a broad upward movement.
2- Never buy a stock because it has had a big decline from its previous high. The likelihood is that the decline is based on a very good reason. That stock may still be selling at an extremely high price if the current level seems low. Try to forget its past high range and study it on the basis
of the formula which combines timing and price.
3- It is foolhardy to make a second trade if your first trade shows you a loss.
4- There are only a few times a year, possibly four or five when you should allow yourself to make any commitment at all. In the interims, you are letting the market shape itself for the next big movement.
5- Keep in mind that brokers sometimes innocently become the undoing of many speculators. Brokers are in the business to make commissions. They cannot make commissions unless customers trade. TI1c more trade, the more commissions. The speculator wants to trade and the
broker not only is willing but too often encourages over-trading. The uninformed speculator regards the broker as his friend and is soon over-trading.
6- "Rome was not built in a day," and no real movement of importance ends in one day or in one
week. It takes time for it to run its logical course. It is significant that a large part of a market movement occurs in the last forty-eight hours of a play, and that is the most important time to be in it.
7- Whenever the market does not act right or in the way it should is reason enough for you to
change your opinion and change it immediately.
Remember: there is always a reason for a stock acting the way it does. But also remember: the chances are that you will not become acquainted with that reason until some time in the future when it is too late to act on it profitably.
September 20, 2021
There are a few classical trading rules listed in this book, the kind of advices that is mentioned and omitted by most profitable traders today. This book is written for people who wanted to treat trading as a business and not for pure gamblers. Some of the examples includes:
"It never was my thinking that made the big money for me. It was always my sitting tight." - The importance of patience and sitting on cash and waiting for the right moment to strike.
"Profits always take care of themselves but losses never do." - The importance of cutting your losers quick and never become an "involuntary investor" for taking on tremendous losses for no reason. Also, never averaging losers.
Jesse Livermore was perhaps one of the originator of trend following. He never would never buy a stock just because it went down 50 or 80%. He believes there is probably a good reason that that happened. Thus he is often times a breakout trader who either buy all time highs or sell all time lows. Also, he emphasized on the importance of placing great risk-reward trades.
Though most of the concepts detailed in the book remains timeless, little is new for me. However, some of this "war stories" that is detailed in the earlier part of the book is rather interesting. Definitely worthy of a read! 3.5/5 rounding down.
"It never was my thinking that made the big money for me. It was always my sitting tight." - The importance of patience and sitting on cash and waiting for the right moment to strike.
"Profits always take care of themselves but losses never do." - The importance of cutting your losers quick and never become an "involuntary investor" for taking on tremendous losses for no reason. Also, never averaging losers.
Jesse Livermore was perhaps one of the originator of trend following. He never would never buy a stock just because it went down 50 or 80%. He believes there is probably a good reason that that happened. Thus he is often times a breakout trader who either buy all time highs or sell all time lows. Also, he emphasized on the importance of placing great risk-reward trades.
Though most of the concepts detailed in the book remains timeless, little is new for me. However, some of this "war stories" that is detailed in the earlier part of the book is rather interesting. Definitely worthy of a read! 3.5/5 rounding down.
August 14, 2020
He explains his trades in extreme detail. It can be confusing since we no longer use fraction prices and the companies he mentions are no longer around. He has many rules to follow, some are good and some are confusing. I sometimes wonder if he had full confidence in his own rules. He ended up killing himself because he lost so much money.
Having said all that, since this book is a classic, all traders should read it. His stories and how the market play tricks on one's own confidence is still relevant today.
Having said all that, since this book is a classic, all traders should read it. His stories and how the market play tricks on one's own confidence is still relevant today.
September 4, 2024
- **If we visualize the speculator at the center of the wheel, at the hub, we can see the emotional and psychological pressures that must be endured.**
- **For Sigmund Freud, the human psyche is forever and inescapably in conflict by nature - a war that never ends.**
- **For Carl Jung, the successful person ultimately seeks and achieves knowledge, enlightenment and harmony.**
- **Each speculator must determine how they want to deal with their emotions and the psychological slings and arrows of the stock market.**
- **For Sigmund Freud, the human psyche is forever and inescapably in conflict by nature - a war that never ends.**
- **For Carl Jung, the successful person ultimately seeks and achieves knowledge, enlightenment and harmony.**
- **Each speculator must determine how they want to deal with their emotions and the psychological slings and arrows of the stock market.**
September 2, 2020
4 ดาวสำหรับหนังสือเล่มนี้
ถ้าเป็นในฉบับแปลภาษาไทย น่าจะมีอยู่2 สำนวนการแปล คือ ของคุณมด แมงเม่าคลับ กับคุณกิจพณ ไพรไพศาลกิจ เนื้อหาในเล่มเป็นสิ่งที่ Livermore ได้บันทึกไว้เกี่ยวกับแนวคิดในการเก็งกำไรของเขา และเสริมในส่วนหลังของเล่มโดยนักเขียนอีกท่านหนึ่งที่ขยายความ และอธิบายเสริมแนวคิดของ Livermore ให้เหมาะกับยุคสมัยปัจจุบันที่เครื่องมือในการเก็งกำไรมีหลากหลายมากขึ้น เนื่องจากในยุคของ Livermore แกจะใช้การจดบันทึกราคาและนำหลักคณิตศาสตร์มาคำนวณหาจุดต่างๆ เช่น Reversal บลาๆ
ถ้าเป็นในฉบับแปลภาษาไทย น่าจะมีอยู่2 สำนวนการแปล คือ ของคุณมด แมงเม่าคลับ กับคุณกิจพณ ไพรไพศาลกิจ เนื้อหาในเล่มเป็นสิ่งที่ Livermore ได้บันทึกไว้เกี่ยวกับแนวคิดในการเก็งกำไรของเขา และเสริมในส่วนหลังของเล่มโดยนักเขียนอีกท่านหนึ่งที่ขยายความ และอธิบายเสริมแนวคิดของ Livermore ให้เหมาะกับยุคสมัยปัจจุบันที่เครื่องมือในการเก็งกำไรมีหลากหลายมากขึ้น เนื่องจากในยุคของ Livermore แกจะใช้การจดบันทึกราคาและนำหลักคณิตศาสตร์มาคำนวณหาจุดต่างๆ เช่น Reversal บลาๆ
October 23, 2024
Empty wisdom. Couldn't read it through. Livermore's methods come across to me as more about luck than skill. His so-called strategies are vague, with little actionable advice for modern readers, probably also for readers back in his day. It seems to me that he tumbled upon success more than actually mastering a replicable approach. This book is more of a cautionary tale than a guide for today's traders.
February 14, 2018
Still relevant
Though Jesse Livermore died in 1940, his stock trading advice is still relevant. Follow the lessons he learned from his decades of trading stocks through the recession of 1907 and the depression of 1929, as well as, insights learned from his study of human psychology.
Though Jesse Livermore died in 1940, his stock trading advice is still relevant. Follow the lessons he learned from his decades of trading stocks through the recession of 1907 and the depression of 1929, as well as, insights learned from his study of human psychology.
August 2, 2018
More like psychology study of a trader book to me.
JL mentioned alot tips that are still relevant until today, and his pivotal theory is important as well.
His advanced method is quite outdated in modern era, as charts are updated every sec and flash crash can happen anytime esp volatile asset like bitcoin and cryptos.
JL mentioned alot tips that are still relevant until today, and his pivotal theory is important as well.
His advanced method is quite outdated in modern era, as charts are updated every sec and flash crash can happen anytime esp volatile asset like bitcoin and cryptos.
Read
May 20, 2021Fascinating little book, but also something of a lesson as "He (Livermore) is considered a pioneer of day trading[2] and was the basis for the main character of Reminiscences of a Stock Operator, a best-selling book by Edwin Lefèvre. At one time, he was one of the richest people in the world; however, at the time of his suicide, he had liabilities greater than his assets.[3]" (Wikipedia)
October 24, 2021
What more can I say, Jesse Livermore is truly a legend in technical trading. The method taught in this book is applicable back then as much as it is today. The only lucky thing is we no longer need to record the trading price in a booklet, but we can do it on an excel file. Back in those days, Jesse Livermore created his own excel file (Examples are given in the book)
December 2, 2022
Just learning to trade
I'm just learning to trade and this book is a gem. I'll need to read the last chapter again probably a few times and probably will
need the physical copy to see the charts which were not visible enough but definitely a good book for initially learning trading.
I'm just learning to trade and this book is a gem. I'll need to read the last chapter again probably a few times and probably will
need the physical copy to see the charts which were not visible enough but definitely a good book for initially learning trading.
January 31, 2023
Essential reading for every serious student and trader in the art of speculation. I'm looking forward to implementing the widsom and techniques shared through the mysterious and adventurous life of Jesse Livermore and in his words. A true genius and pioneer in this challenging field where only a very determined few find success. Thank you J.L.
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