How to Trade in Stocks by Jesse Livermore

I am not sure what the market is going to do to open the week so instead of posting a new stock screen, I’ll give it a day and entertain with a few quotes from Jesse Livermore’s book How to Trade in Stocks (one of my favorites, originally written in 1940). Pay particular attention to the first quote!

• “Successful traders always follow the line of least resistance – follow the trend – the trend is your friend”
• “Wall Street never changes, the pockets change, the stocks change, but Wall Street never changes, because human nature never changes”
• “Just because a stock is selling at a high price does not mean it won’t go higher”
• “It cannot be said too often that in speculation and investment, success comes only to those who work for it”
• “I have long since learned, as all should learn, not to make excuses when wrong. Just admit it and try to profit by it. We all know when we are wrong. The market will tell the speculator when he is wrong, because he is losing money. When he first realizes he is wrong is the time to clear out, take his losses, try to keep smiling, study the record to determine the cause of his error, and await the next big opportunity. It is the net result over a period of time in which he is interested”
• “But careful timing is essential…impatience is costly”
• “The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements”
• “All through time, people have basically acted and re-acted the same way in the market as a result of: greed, fear, ignorance, and hope – that is why the numerical formations and patterns recur on a constant basis”
• “The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, or for the get-rich-quick adventurer. They will die poor.”
• “Markets are never wrong – opinions often are”
• “Remember too that it is dangerous to start spreading out all over the market. By this I mean, do not have an “Interest in too many stocks at one time. It is much easier to watch a few than many. I made that mistake years ago and I cost me money”
• “There is nothing more important than your emotional balance”

Other books related to Jesse Livermore: