Blunders by incompetent speculators cover a wide scale. I have warned against averaging losses. That is a most common practice. Great numbers of people will buy a stock, let us say at 50, and two or three days later if they can buy it at 47 they are seized with the urge to average down by buying another hundred shares, making a price of Having bought at 50 and being concerned over a three-point loss on a hundred shares, what rhyme or reason is there in adding another hundred shares and having the double worry when the price hits 44?
If one is to apply such an unsound principle, he should keep on averaging by buying two hundred shares at 44, then four hundred at 41, eight hundred at 38, sixteen hundred at 35, thirty-two hundred at 32, sixty-four hundred at 29 and so on.
How many speculators could stand such pressure? So, at the risk of repetition and preaching, let me urge you to avoid averaging down. I know but one sure tip from a broker. It is your margin call. When it reaches you, close your account.
You are on the wrong side of the market. Why send good money after bad? Keep that good money for another day. Risk it on something more attractive than an obviously losing deal. We know that prices move up and down. They always have and they always will. My theory is that behind these major movements is an irresistible force.
That is all one needs to know. It is not well to be too curious about all the reasons behind price movements. You risk the danger of clouding your mind with non-essentials.
Just recognize that the movement is there and take advantage of it by steering your speculative ship along with the tide. Do not argue with the condition, and most of all, do not try to combat it. Review trend following systems and training :. Written in Livermore's inimitable, no-nonsense style, it interweaves fascinating autobiographical and historical details with step-by-step guidance on: Reading market and stock behaviors Analyzing leading sectors Market timing Money management Emotional control In this new edition of that classic, trader and top Livermore expert Richard Smitten sheds new light on Jesse Livermore's philosophy and methods.
Drawing on Livermore's private papers and interviews with his family, Smitten provides priceless insights into the Livermore trading formula, along with tips on how to combine it with contemporary charting techniques. Also included is the Livermore Market Key, the first and still one of the most accurate methods of tracking and recording market patterns. How to Trade In Stocks. Get Books. The Success Secrets of a Stock Market Legend Jesse Livermore was a loner, an individualist-and the most successful stock trader who ever lived.
Written in Livermore's inimitable,. Time Magazine described Jesse Livermore as the most fabulous living U. His progress from office boy to Wall Street legend - his trading lessons - his triumphs and disasters - is probably the most fascinating of any of Wall Street's stories.
Even today, many stock and commodity traders. Jesse Livermore's Methods of Trading in Stocks. Full facsimile of the original edition, not reproduced with Optical Recognition Software. Livermore was an American stock trader.
He was famed for making and losing several multi-million dollar fortunes and short selling during the.
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