Jesse Livermore Trading System

1. 1. Jesse Livermore
“It’s not the thinking that makes
the money; it’s the sitting.”
By Penny Stock Whizzkid

2. • Jesse was truly gifted, with a photographic memory when it
came to numbers. He actually performed three years of
mathematics in one year of school during his youth.
• “ There is nothing new on Wall street or in stock
speculation. What was happened in the past will happen
again and again and again. This is because human nature
does not change, and it is human emotion that always gets
in the way of human intelligence.“
• Noticed that most people lost money in the stock market
because they acted randomly, did not act on rules or a
predefined plan, and did not put forth the required study
that the market and its actions required.

3. Jesse Livermore’s lessons:
Impatience
• Livermore would become impatient and
thought he had to trade. Impatience in the
market usually leads to making impulse
trades, which rarely leads to profitable
success.
Don’t overtrade
• Do nothing when you don’t need to do
anything.

4. • Understand the general trend of the market.
Move with the market; don’t fight against it.
• Buy stocks hitting new highs in price as they
pass through certain resistance areas.
• Cut your losses short. Protect yourself from a
wrong decision at no more that a 10% loss.
Sell drifting stocks, as their inaction is an
opportunity cost.

5. • Let your profits ride, as your strongest stocks
keep moving up or down. Be patient with
stocks that are acting correctly. The big money
is made by sitting tight.
• Leading stocks in leading and strong industries
is where your concentration should be.
• Experience – learn from your experiences and
errors.