Jesse Livermore's 17 Trading Tips and 7 Rules

Jesse Livermore (1877-1940) was a famous American stock- trader. Livermore was also known as the ‘Boy Plunger’ and the ‘Great Bear of Wall Street’ because he had made a fortune by short-selling the market during the American stock market crashes of 1907 and 1929.


Jesse Livermore's Trading Tips


These are the 17 trading rules by Jesse Livermore written in 1940:

  1. Markets are never wrong – opinions often are. Don’t trust your own opinion and back your judgment until the action of the market itself confirms your opinion.

  2. Nothing new ever occurs in the business of speculating or investing in securities and commodities.

  3. Money cannot consistently be made by trading every day or every week during the year.

  4. The real money made in speculating has been in commitments showing in profit right from the start.

  5. Never buy a stock because it has had a big decline from its previous high.

  6. Never sell a stock because it seems high-priced. As long as a stock is acting right, and the market is right, do not be in a hurry to take profits.

  7. I become a buyer as soon as a stock makes a new high on its movement after having had a normal reaction.

  8. Never average losses.

  9. The human side of every person is the greatest enemy of the average investor or speculator.

  10. Wishful thinking must be banished.

  11. Big movements take time to develop.

  12. It is not good to be too curious about all the reasons behind price movements.

  13. It is much easier to watch a few than many.

  14. 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.

  15. The leaders of today may not be the leaders of two years from now.

  16. Do not become completely bearish or bullish on the whole market because one stock in some particular group has reversed its course from the general trend.

  17. 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.



Jesse Livermore 7 Trading Rules – “Don't give me timing; give me time”


Livermore was one of the first traders in the world who has been able to understand and analyze the real market supply and demand and at the same time identify the long-term market pattern based on real price action.

  • Livermore used to say: "Whatever happens in the stock market today has happened before and will happen again”


Here are the nine rules of Jesse Livermore regarding trading:

  1. Money is made by sitting, not trading. It was never my thinking that made the big money for me; it always was sitting.

  2. It takes time to make money.

  3. Nobody can catch all the fluctuations in the market.

  4. Buy right, sit tight. Men who can both be right and sit tight are uncommon.

  5. Don't give me timing; give me time {So useful Rule for Derivative Traders today}.

  6. The desire for constant action irrespective of underlying conditions is responsible for many losses on Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages.

  7. There is a time for all things, but I didn't know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. Not many can always have adequate reasons for buying and selling stocks daily — or sufficient knowledge to make his play an intelligent play.

Jesse Livermore with his rules tries to underline the catastrophic impact of excessive trading in your portfolio. He tries to emphasize also how important is to be selective with your trades. There is a value sometimes when staying with your positions and when you completely avoid trading.


» Jesse Livermore at Wikipedia


 □ Jesse Livermore Tips and Rules (c)

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