Jesse Livermore’s Trading Rules

Jesse Livermore Rules

Jesse Livermore’s Trading Rules were established a long time ago but are still valid today. Stock analysis can get you far when investing or trading, but to be truly successful any investor or trader will have their own set of rules and guidelines. Although, simply having any set rules and guidelines won’t make you successful in trading and investing. The key to success is having a good set of rules and guidelines. Jesse Livermore’s Trading rules are some of the best in history that you will want to use.

Who is Jesse Livermore?

Jesse Livermore was one of the most successful traders of the 20th century. He wrote this set of 21 rules in 1940 that both traders and investors need to keep in mind. These rules are still valid over 75 years later.

All 21 of Jesse Livermore’s Trading Rules:

  1. Nothing new ever occurs in the business of speculating or investing in securities and commodities.
  2. Money cannot consistently be made trading every day or every week during the year.
  3. Don’t trust your own opinion and back your judgment until the action of the market itself confirms your opinion.
  4. Markets are never wrong – opinions often are.
  5. The real money made in speculating has been in commitments showing in profit right from the start.
  6. As long as a stock is acting right, and the market is right, do not be in a hurry to take profits.
  7. One should never permit speculative ventures to run into investments.
  8. The money lost by speculation alone is small compared with the gigantic sums lost by so-called investors who have let their investments ride.
  9. Never buy a stock because it has had a big decline from its previous high.
  10. Never sell a stock because it seems high-priced.
  11. I become a buyer as soon as a stock makes a new high on its movement after having had a normal reaction.
  12. Never average losses.
  13. The human side of every person is the greatest enemy of the average investor or speculator.
  14. Wishful thinking must be banished.
  15. Big movements take time to develop.
  16. It is not good to be too curious about all the reasons behind price movements.
  17. It is much easier to watch a few than many.
  18. If you cannot make money out of the leading active issues, you are not going to make money out of the stock market as a whole.
  19. The leaders of today may not be the leaders of two years from now.
  20. Do not become completely bearish or bullish on the whole market because one stock in some particular group has plainly reversed its course from the general trend.
  21. 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.

Takeaway: Utilize Jesse’s Rules!

YP Investors hopes you take at least 3 of these rules (or all of them), and write them somewhere special so you use them when you are investing or trading. Jesse Livermore’s trading Rules made him one of the most wealthy people in history. Why wouldn’t you want to use the same investing and trading guidelines? If you add a little Technical Analysis and Point and Figure Charting to Jesse’s rules you should be set to live the life you want!

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