Stock Market Wisdom – Learning to Trade Like the Legends, Part 10

I thought I would conclude this learning series with wisdom from the greatest stock market operator of all-time, Jesse Livermore. I have read, “Reminiscences of a Stock Operator”, many times. Much of the superb trading knowledge I am about to share with you, is from that classic book.

Whatever is happening in the stock market now, has happened in the past, and will happen in the future.

Always look for repetitions, and similar types of behavior in the market. History always repeats itself in the stock market.

The desire for constant action, even in bad market conditions, is responsible for many losses.

The biggest battle to win in the stock market, is fighting the enemies inside us. That is human nature.

Never argue with the market. The market is much bigger than any of us. Always stay in sync with the market flow.

You must believe in yourself, and your own judgement. Tips and opinions from others are dangerous, financially.

Implement a system, based on study and experience. Do not gamble.

If a stock does not act right, don’t buy it.

The way to make money is to properly appraise conditions. Plan accordingly, and then act.

Do not sell a stock that is acting right because you are anticipating a reaction.. The reaction may not happen.

The big money is not made in the individual fluctuations. It is made in major movements, which take time. Be right and sit tight.

Buy the best stocks during a bull market. Get out off all your stocks when the general market conditions start to reverse to a possible bear market.

Never buy cheap stocks. They are cheap for a good reason. A lot of money is lost this way.

Stocks are never too high to buy, or too low to sell.

Much depends on your timing. Always buy at exactly the right time.

Study your mistakes, and learn from them.

Look ahead and follow a clear trading plan.

A small loss should not bother you.

Watch the market. Determine the direction or trend. Go with the trend.

When prices are in a narrow range, wait until the price breaks through this range in either direction. Then go with the flow.

When you buy stocks, it is better to pay top prices.

Always accumulate your shares of a stock on the way up in price, never on the way down in price.

“Hope” will cause you to lose a lot of money, and “fear” will keep you from making a lot of money.

Sell what shows you a loss, and keep what shows you a profit.

When stock market leaders go down several points from their top, and do not come back, this is a clue of a possible general market reversal.

Do not try to sell at the top, or buy at the bottom.

You will be paid well for both patience, and being right.

Greed will cause people to take tips.

It is a fallacy that a stock once selling at 100 is now a good deal at 50, and a great deal at 20.

You should never buy at the bottom, and should always sell too soon.

A proper stock market education is like a medical education. It will take many years of learning.

Observation, experience, memory, and mathematics. A successful trader must depend on these.

Only trade when the odds or probabilities are in your favor.

If your business is to trade, you must study.

Do not go against the movement of industry groups in the stock market.

Do not buy a stock that does not follow the group leader.

The chart will warn you when something is wrong in the stock market.

Only go long on an advancing market, and only go short on a declining market.

In the stock market, your strongest ally are the conditions.

Knowledge is power, and power need not fear lies.

Stick to the facts, and do not worry about what other people think.

Learn from the experience of others.

Study proper trading psychology. It is very valuable.

People will continue to make the same mistakes in the future as they have in the past.

The sucker will always try to get something for nothing.

You must adapt yourself to changing conditions.

Be fearless, but not reckless.

Do not blame others for your own failures.

Stocks are manipulated to the highest prices possible, by the powers to be, and then sold to a gullible public on the way down.

Stay with the teachings of experience and common sense.

General wisdom is less valuable than specific savvy.

If you lose your temper, you are finished as a trader in the markets.

The trader or speculator’s most dangerous enemies are ignorance, fear, greed, and hope.

It is as important to know what not to do, as to know what should be done.

In a major bull market, the public at first makes money, which later is lost, by over-staying the bull market.

The public likes to be told. This is what makes tip giving a common occurrence.

The market usually looks ahead from 6 to 9 months, ahead of current conditions.

There is no need to know the reason why a stock advances in price. As long as it keeps moving up, with only small and natural reactions, it is a safe bet to stay with it.

If after a long, steady up-trend in price, a stock turns and slowly starts to go down, with only occasional small rallies, the trend is reversing, and it is time to sell your stock.

You have just read many of the true stock market secrets from Jesse Livermore. Learn and implement them into your own trading. You could make a fortune using this stock market wisdom.