Jesse Livermore (1877-1940) 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 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

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