Jesse Livermore (1877–1940), also known as the “Boy Plunger” and the “Great Bear of Wall Street,” made a fortune by short-selling during the American stock market crashes of 1907 and 1929.

 

Jesse Livermore's BackGround

 

Jesse Lauriston Livermore, famously known as the "Boy Plunger" and the "Great Bear of Wall Street," was one of the most iconic traders in financial history. Born on July 26, 1877, in Shrewsbury, Massachusetts, Livermore rose from humble beginnings as a chalkboard boy in a brokerage to become a self-made multimillionaire—only to lose and rebuild his fortune multiple times in a dramatic, high-stakes career.

 

Market Crashes and Legendary Short-Selling Wins

Livermore’s greatest fame came from his uncanny ability to predict and profit from market panics:

• 1907 Crash – He famously shorted the market, capitalizing on the panic triggered by the Knickerbocker Trust crisis. His trades were so large that financier J.P. Morgan personally asked him to stop shorting to avoid worsening the crash. Livermore complied—and walked away with $3 million (over $90 million today).

• 1929 Wall Street Crash – His most legendary trade came when he anticipated the Great Depression, building massive short positions before Black Tuesday. His profits reportedly exceeded $100 million (over $1.5 billion today), making him one of the richest men in the world.

 

Legacy: Lessons from the Great Speculator

Livermore’s 1940 book, How to Trade in Stocks, remains a trading classic. His life inspired:

• Reminiscences of a Stock Operator (1923) – A fictionalized account of his career, considered the Bible of trading psychology.

Jesse Livermore was a trading genius who mastered market crashes but struggled with his own demons. His story is a cautionary tale about discipline, risk management, and the psychological toll of trading. Yet, his strategies remain timeless—studied by traders even a century later. On November 28, 1940, Livermore tragically took his own life in a New York hotel, leaving behind a cryptic suicide note: "I am a failure."

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Jesse Livermore's Trading Tips

 

These are the trading rules by Jesse Livermore written back 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. The human side of every person is the greatest enemy of the average investor or speculator. Wishful thinking must be banished.

 

(2) Do not become completely bearish or bullish on the whole market because one asset in some particular group has plainly reversed its course from the general trend.

 

(3) Nothing new ever occurs in the business of speculating or investing in securities and commodities. Whatever happens in the market today has happened before and will happen again.

 

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

 

(5) Money cannot consistently be made trading every day or every week during the year. Big movements take time to develop. Money is made by sitting, not trading. It was never my thinking that made the big money for me; it always was sitting. 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.

 

(6) Never buy an asset because it has had a big decline from its previous high. Never sell an asset because it seems high-priced. As long as an asset 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 an asset makes a new high on its movement after having had a normal reaction.

 

(8) Never average losses.

 

(9) 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.

 

(10) Buy right, sit tight. Men who can both be right and sit tight are uncommon. Don't give me timing; give me time.

 

 

◙ Jesse Livermore Trading Tips

Forex-Investors (c)

 

BOOKS:

» Jesse Livermore on Google Books