Maybe they’ve done a few hours of research and they’re convinced the market’s about to rally. Jesse Lauriston Livermore (July 26, 1877 – November 28, 1940) was an American stock trader. Never follow tips or rely on anyone else to do your trading for you.Jesse Livermore’s biggest mistakes, the ones that caused him to lose thousands and millions of dollars in profits, did not come from taking the wrong trades or from taking small losses, they came from not taking a loss when it was still small.In other words, by leaving the loss and not cutting it short, the loss was able to grow and grow, until it was too big and too painful to let go of. Commentators like Jim Rogers, Nouriel Roubini, Marc Faber, John Paulson and many others all knew that the property market was forming a bubble and that the banks were over-leveraged.But few were able to time the bear market well enough in order to take full advantage. The professional trader mindset simply sits tight and waits for the opportunities to come to him.Remember that when you trade, you don’t only pay a fee to your broker and a commission but you pay the spread too.The Bid:Ask spread, means that you can only buy at the best ask price (slightly above the market) and only sell at the best bid price (slightly below the market).It is this spread that makes money for the market maker but it works against you every time you trade, so that every time you trade you start out with an inevitable small loss.This is the cost to trade and to overcome it you first need to stop trading for action alone. He was a self-made man trading his own money and building a fortune but he lost a lot of money too. This is a quantitative trend following strategy that shows a performance of 19% in historical backtests and is included with full code and rules.

Likewise, try and find a stock that went down in the fierce bull market of 2009 and you will have a lot of trouble.In fact, during extreme market events, it’s not just stocks that all go down, nearly all markets can go down together.In the 2008 crash, we saw stocks, commodities, real estate, gold all go down together. Therefore it pays to largely ignore the financial news. Then at some point, one side will take over, and you’ll see the price shoot in one direction. Simply because it’s almost impossible to pick the turns precisely and come out ahead.If you trade this way you might lose 9 times out of 10 and undergo a lot of stress and pain in the process.The easier way is to do what Jesse Livermore did and that is to forget about picking the turns.
Throughout history we have seen the same These crashes and bubbles are just an inevitable feature of the markets.Sure, computers and algorithms play a much bigger part now but always remember that computer algorithms are built by humans in the first place.
But it is not a game for the stupid, the mentally lazy, the man of inferior … The book is regarded as an essential read by such well known financiers as Ed Seykota, Paul Tudor Jones, and even former Fed Chairman Alan Greenspan.Over the course of this guide we will look at Jesse’s best trading rules (as detailed in the famous book) and we will get right to the heart and strategy of the master trader.What Jesse means is that the same market moves and patterns occur over and over again. There is always an opportunity around the corner.First of all, you don’t want to take a tip from a broker, because a broker might have a conflict of interest. That’s how you let trends develop and how you build the big profitable positions.So when you place a trade, and maybe you start off with just a small position, you want to fear that that trade will turn into a small loss. If there is one rule that is key for following trends in the market it’s this.

Even if it is one of the leading issues.It just isn’t enough to suggest any omen for the future.

If this is a bull market you should be long, if this is a bear market you should be short.And as Mr Partridge used to say, once you sell your trade you lose your position. But of course it has neither.If you get stopped out of a trade and you show a loss, or if the market doesn’t act how you expected it to, it is not the market’s fault.

There can’t be because speculation is as old as the hills. “The game of speculation is the most uniformly fascinating game in the world. Jesse was famously profiled in the classic investing tome Reminiscences of a Stock Operator, a book that has been called the best trading book every written.This is a long piece, clocking in at around 9,000 words and it covers all of Jesse’s most important trading lessons. Again, you’re going to save yourself money in the long run if you just wait for the opportunities to present themselves to you not the other way around.For trend traders, unlike contrarian investors or mean reversion traders, the best trades often move very swiftly into profit. It’s extremely dull.