Livermore Trading System

newtrader · Newbie Joined: 19 Sep 2005 Posts: 1

Hi,

I recently bought a book called "How to trade in Stocks" by Jesse Livermore.

I manage to get the ideas or principles on what to do and what are not to do.
e.g. Timing, Emotional Control, Money Management, Pyramiding.

However, my biggest problem is i cant work out the "The Livermore Market Key"; I dont understand how Jesse Livermore does his charts and recording prices.

Is there any1 trading Jesse Livermore's style or manage to follow Livermore's charting technique?

Most appricated if you response my question.

Thank You

TRS · Veteran Poster Joined: 11 Aug 2005 Posts: 188

Well explained Henry.
If I had to classify Livermore as a trader I would say he was a swing trader in the beginning then evolved into swing and fundamental analysis combined trader later on. That is what I classify myself as presently, a swing trader who does a good deal of fundamental analysis and will hold stocks for at least one day up to several weeks to months at a time or until fundamentals or valuation change drastically. If Mr. Market takes a drastic change for the worse then I will go to all cash or short opportunities.
In the end you have to decide what's best for you, you may lose everything you have in the process like I did twice many years ago.
good luck

http://www.investopedia.com/terms/s/swingtrading.asp

daniells56 · Newbie Joined: 08 Mar 2006 Posts: 1

If you are interested in Livermore strategies try here:
www.advantage.online.pl/en-liv.html

I do not know how much there is really from Livermore, but you can check it.

HenryTo · Posted: Mon Sep 19, 2005 7:24 pm Post subject: Livermore System

newtrader,

As far as I know, Livermore never engaged in charting. As for the "records" that Livermore talks about, my guess is that he maintains a diary (or several diaries) of all his trades as well as his observations on certain price and volume patterns, etc. Obviously, he records the daily closes of a list of stocks everyday but please keep in mind that he has always been a tape reader and his skills never left him even as he started operating in the NYSE. At the end of the day, you really need to find out what works for you, and not try to imitate anyone's style, including Livermore's.

Also, Livermore has always liked to buy on breakouts - with few exceptions - and only strictly limited to panic (such as the Panic of 1907 when he covered all his shorts and went long) or overly optimistic situations (such as the summer of 1929 when he started shorting stocks).

Hopefully, this helped out a little bit. But then, nothing in the stock market is supposed to be easy. Smile

Best,

Henry