By: Jesse Livermore Publisher: McGraw-Hill Average Rating: Binding: Paperback Label: McGraw-Hill Number of Items: 1 Number of Pages: 224 Publication Date: February 17, 2006
Jesse Livermore was a loner, an individualist-and the most successful stock trader who ever lived. Written shortly before his death in 1940, How to Trade Stocks offered traders their first account of that famously tight-lipped operator's trading system. 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
Great read Well written book with much useable information from the master of stock trading. I have purchased many books on the market and this ranks near the top of the list.
Jesse Livermore Lives On Livermore lived during the Great Depression and was known as "The Boy Plunger" for taking on large positions. He had been trading stocks since he was 15 and was regarded as one of the best speculators of his time. He made and lost millions, and this was back when a million was a lot of money. If Livermore was alive today he would be one of the most sophisticated traders around.
I've read this book eight times and every time I read it, I pick up something new. It's so easy to read it feels as if the author is talking to you one on one. In the book he reveals his personal rules of trading, his money management procedures, his entry and exit strategies, and his rules for emotional discipline.
A lot of what he says is common sense. At least it seems that way when he explains it but it goes against what the Wall Street machine tells us. For example, Livermore stresses that you should "never average down. Why add to a trade you are already losing money on?" He also describes the foibles of buy and hold. Many people of his time bought the blue chips of the day - the railroads, steamship companies, buggy whip companies, and others who are no longer around. "Life is change" he reasons, "your clothes change, your kids change, you change lovers. So why cannot the reason you buy a stock change?"
Some of his rules include:
Always trade with the trend, along the line of least resistance. Make sure all the factors are in your favor before you make a trade. (The factors are detailed in the book) Stay with the leading stocks of the day Group action is a key to timing - Stocks do not move alone. Don't buy your entire position at once. Always have a stop before you get in a trade. (Livermore used 10%) Never takes tips from anyone Never argue with the tape. You should not be in the market all the time.
One of the things that helped me was that after a large successful trade, the author recommends taking half the profit out of the market. Put it away somewhere safe.
Even though the author says he never used charts, it seems that he was a technical, trend follower by today's definitions. He got in on what he called Pivotal and Continuation Points which he describes in Chapter 5.
Even though most of the book is put together by Smitten, it is still an enjoyable read for someone looking to put together a trading strategy and system. Someone who is new to the stock market will find a plethora of beneficial information. And the infomercial other reviewers have mentioned is only a short 6 pages at the back of the book. I've also read Reminiscences of a Stock Operator (Wiley Investment Classics) which is the story of a trader based on Livermore's life and Smitten's Jesse Livermore: World's Greatest Stock Trader and learned a lot from each of those as well. Both highly recommended.
I hope this review helps you in your decision to buy this book or not. I find that it is a mandatory read for all investors and traders. It has definitely helped me to improve my stock trading. If you want to read more of my reviews of stock trading and investment books, you can get them at TheTradingTipster.com
An essential item for any new trader A good book for the new trader. Follow the hints provided by Mr. Livermore, but, be careful; don't let greed to guide your trading decisions.
Nice story-telling book, not much more... I had previously read the 'Remininscenses of a Stock Operator', which I found to be an interesting story and hence I decided to read this book hoping for some concrete trading ideas.
Unfortunately, it was a total waste o $13+pp and a few days' time. The author uses some fancy terms (thought of by himself), makes some analogies to a friend of his from the army, but eventually I do not feel more educated even by the smallest of margins.
Any "advice" "offered" is very vague and the entire book is very thin.
Actually it leaves the impression of those $100 books sold on the internet containing the secrets that reveal the stock market's holy grail and will only be sold in a few houndred copies, so that only a few selected ones will be let into the "circle of stock market future tycoons".
Really magic - after sifting through some padding I have read many books on trading and have to agree with many other reviewers here - Livermore's original text is like gold. On some pages I found myself underlining almost every line. I found that the second two thirds of the book were filled with repeat quotes, repeated charts and some spelling errors. For the first third though I have given it 4 stars - the original text is hard to find (although I have just picked it up now on Wikipedia thanks to another reader's review). Trade in the strongest stocks in the strongest sector!
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