Cover of How to Trade in Stocks

How to Trade in Stocks

Jesse Livermore

3 ideas

  1. Pivotal points as the moment to act

    A pivotal point is a price level, often an old high, a round number, or the edge of a consolidation, where a stock's behaviour on reaching it shows whether the move is real. The trader waits for price to cross that level with conviction before committing, and treats failure to follow through as a signal to exit. Entering before the pivot confirms, or long after it, gives up the edge; the profit lies in patience at a specific price.

  2. Never average down on a losing position

    Adding to a position that is showing a loss compounds an error that the market has already flagged, so losses should be cut quickly at a predetermined point. The only justified addition is to a position already showing a profit, because rising price confirms the original judgment. The rule inverts the intuitive 'buy cheaper' instinct: price moving against you is information, not a bargain.

  3. Market Key price recording system

    Two leading stocks in the same group are tracked together with their combined price to confirm group trend. The method forces the trader to wait for defined thresholds instead of reacting to daily noise, and turns trend judgment into a mechanical record.

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