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Peeking into the Success Keys of Stock Market Legend, Jesse Livermore

Jesse Livermore, known as the "Speculator King" and the "great bear of Wall Street," stands as one of the stock market legends who achieved tremendous success during Wall Street crashes. However, his success wasn't attained haphazardly. Here are some success keys from this mysterious trader:


  1. 1. Early Experience in Betting

  2. Livermore first encountered the stock market at the age of 14 when he ran away from home with only USD5 in his pocket. With his knack for predicting stock price movements, he managed to earn significant profits. This early experience laid the foundation for his career in the stock market.

  3. 2. Discipline and Calculation

  4. Livermore wasn't like speculators who solely relied on luck. He was highly calculated in timing and risk management. By using price movement patterns, pyramiding techniques, and trend analysis, Livermore maximized profits and maintained good emotional control.

  5. 3. Success in Crisis Times

  6. During two Wall Street market crashes, Livermore garnered enormous profits. In 1907, he made USD3 million in a single day amid market panic. Similarly, during the 1929 crash, Livermore made a profit of USD100 million. His success was due to precise timing, momentum, and excellent risk management.

  7. 4. Livermore's Trading Success Keys
  • Deep Knowledge: Livermore stressed the importance of having sufficient knowledge about market instruments before initiating trading.
  • Rigorous Trading Rules: He always established clear and strict trading rules and remained disciplined in adhering to them.
  • Use of Pivot Points: Livermore used daily pivot points to determine price movement direction.
  • Technical and Fundamental Confirmation: Before placing buy or sell orders, Livermore always waited for confirmation from both technical and fundamental aspects.
  • Use of Stop Loss: Always using stop-loss to determine risk.
  • Exit when Trend Reverses: Livermore only exited positions when the trend reversed.
  • Selective in Stock Selection: During bullish markets, he chose the strongest stocks, and during bearish markets, he entered the weakest stocks. He avoided stocks that seemed doubtful or ambiguous.

  1. 5. Avoiding Common Mistakes
  1. Livermore avoided common mistakes such as lack of knowledge about market instruments, vague trading rules, and violations of agreed-upon rules.
  2. With his discipline, calculation, and experience, Jesse Livermore proved that stock trading isn't just about luck but rather an art that requires skill and the right strategies.
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