Jesse Livermore

23 Timeless Trading Quotes By Jesse Livermore

This post is dedicated to the great Jesse Livermore. An inspiration to many and completely anonymous to others. Trading AtoZ would like to rectify that by introducing Jesse and his work to as many people as possible.

Who is Jesse Livermore?

Jesse Lauriston Livermore (July 26, 1877 – November 28, 1940)

Jesse Livermore was one of the greatest speculators of all time. He won and lost fortunes many times over. Jesse is considered the father of modern day trading and was the main character of the classic book Reminiscences of a Stock Operator, a best selling book by Edwin Lefèvre.

At some points in his life he was one of the richest people in the world. By the time of his suicide in 1940, he had lost all his wealth.

Jesse based his trading on what we now refer to as technical analysis, although at the time it was a mysterious approach. The time when Jesse traded was hard; inaccurate financial statements; stock quotes were hard to come by; market manipulation was rife.

The principles and psychology that Jesse adopted are still relevant today.

The 2 most infamous set of trades by Jesse were opening multiple short positions before the 1906 San Francisco earthquake and again prior to the Wall Street Crash of 1929. These have led Jesse being regarded as the greatest trader who ever lived.

Reminiscences of a Stock Operator

If I could just own one trading book then this would be it. It is informative, educational, emotional, compelling. It will sit with pride on any bookshelf.

An enthralling read that gave me inspiration to continue and develop my trading. See our suggested reading section for this timeless classic.

Timeless Quotes

These are my 23 classic Jesse Livermore quotes with associated extended excerpts from the book.

1. You can win on a stock, but you cannot beat Wall Street all the time.

First, do not be invested in the market all the time. There are many times when I have been completely in cash, especially when I was unsure of the direction of the market and waiting for a confirmation of the next move.

Second, it is the change in the major trend that hurts most speculators.

Always remember; you can win a horse race, but you can’t beat the races. You can win on a stock, but you cannot beat Wall Street all the time. Nobody can.

There is the plain fool, who does the wrong thing at all times everywhere, but there is also the Wall Street fool, who thinks he must trade all the time.

No man can have adequate reasons for buying or selling stocks daily, or sufficient knowledge to make his play an intelligent play.

Remember this: When you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap the benefits from their mistakes.

Trading AtoZ comment: You will not win all of your trades but if you have a good strategy with sound principles you will come out in profit.

See position sizing, entries and exits, trading journal.

2. Don’t be fooled by the charisma of other traders.

It cost me millions to learn that another dangerous enemy to a trader is his susceptibility to the urging of a magnetic personality when plausibly expressed by a brilliant mind.

Trading AtoZ comment: You must not be swayed by other traders and their opinions. If your strategy says sell then you should sell.

See trading journal.

3. Trading is not a get rich quick scheme.

The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.

Trading AtoZ comment: It is possible to make a fortune in a short period of time but you are just as likely to lose a fortune in the same time period.

See position sizing.

4. Markets are driven by humans and human nature never changes.

There is nothing new on Wall Street or in stock speculation.

What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion, solidly build into human nature, that always gets in the way of human intelligence. Of this I am sure.

All through time, people have basically acted the same way in the market as a result of greed, fear, ignorance, and hope. This is why the numerical formations and patterns recur on a constant basis.

I absolutely believe that price movement patterns are being repeated. They are recurring patterns that appear over and over, with slight variations. This is because markets are driven by humans and human nature never changes.

Trading AtoZ comment: Human psychology is very evident in trading. Markets move in cycles that are driven by greed and fear.

See technical analysis.

5. I never argue with the tape.

When I am long of stocks it is because my reading of conditions has made me bullish.

But you find many people, reputed to be intelligent, who are bullish because they have stocks. I do not allow my possessions, or my prepossessions either, to do any thinking for me. That is why I repeat that I never argue with the tape.

Trading AtoZ comment: Your trading positions should be dictated by the market conditions. The market does not care about your positions.

6. Never average losses.

It is foolhardy to make a second trade if your first trade shows you a loss. Never average losses. Let this thought be written indelibly upon your mind.

Trading AtoZ comment: You should maintain a position as long as your original thought process remains valid. Once this thought process has been disproved then you should be out of the position.

See position sizing strategies.

7. It was never my thinking that made the big money for me. It always was my sitting.

They say you never go broke taking profits. No, you don’t. But neither do you grow rich taking a four point profit in a bull market.

I did precisely the wrong thing. The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. Of all the speculative blunders there are few greater than trying to average a losing game. Always sell what shows you a loss and keep what shows you a profit.

The market does not beat them. They beat themselves, because though they have brains they cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not only the courage of his convictions but also the intelligence and patience to sit tight.

After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting.

Trading AtoZ comment: In most cases it takes longer to hit your profit target than it does to hit your stop loss. You must learn to be patient and sit with winning trades.

See entries and exits.

8. Fear and greed are your greatest enemies.

When the market goes against you, you hope that every day will be the last day and you lose more than you should, have you not listened to hope.

And when the market goes your way, you become fearful that the next day will take away your profit and you get out, too soon. The successful trader has to fight these two deep-seated instincts.

Trading AtoZ comment: This can be overcome by having a well documented trading strategy that covers all aspects.

See trading journal.

9. Successful trading is always an emotional battle for the speculator, not an intelligent battle.

Trading AtoZ comment: This can be overcome by having a well documented trading strategy that covers all aspects.

See trading journal.

10. Trade along the path of least resistance.

If after a long steady rise a stock turns and gradually begins to go down, with only occasional small rallies, it is obvious that the line of least resistance has changed from upward to downward.

Such being the case why should anyone ask for explanations? There are probably very good reasons why it should go down.

Trading AtoZ comment: This sounds obvious but many traders want to pick the perfect reversal point. Don’t fight the market, trade with it.

11. Watch the market leaders.

Watch the market leaders, the stocks that have led the charge upward in a bull market. That is where the action is and where the money is to be made. As the leaders go, so goes the entire market.

If you cannot make money in the leaders, you are not going to make money in the stock market. Watching the leaders keeps your universe of stocks limited, focused, and more easily controlled.

Trading AtoZ comment: In strong trending markets the majority of stocks trend in the same direction. Find the early movers in a sector and you may uncover other potential risers and fallers.

12. Remember that stocks are never too high for you to begin buying or too low to begin selling.

Trading AtoZ comment: Just because a share price is high does not mean it will not go higher. Conversely, just because a share price is low does not mean it will not go lower. Shares could make numerous new highs during a bull market, and numerous new lows during bear markets.

13. Being a little late in a trade is insurance that your opinion is correct.

Don’t take action with a trade until the market, itself, confirms your opinion. Being a little late in a trade is insurance that your opinion is correct. In other words, don’t be an impatient trader.

Trading AtoZ comment: Market timing is key to profitable trading. You want to time your trades to maximise your chances of being right and therefore profitable.

See entries and exits.

14. The trend is your friend.

Successful traders always follow the line of least resistance. Follow the trend. The trend is your friend.

Trading AtoZ comment: This sounds obvious but many traders want to pick the perfect reversal point. Don’t fight the market, trade with it.

15. I believe that the public wants to be led, to be instructed, to be told what to do.

They want reassurance. They will always move en masse, a mob, a herd, a group because people want the safety of human company. They are afraid to stand alone because they want to be safely included within the herd, not to be the lone calf standing on the desolate, dangerous, wolf-patrolled prairie of contrary opinion.

Trading AtoZ comment: You must trade by your own decisions and those decisions must be clearly documented.

See trading journal.

16. I don’t buy long stocks on a scale down, I buy on a scale up.

When I’m bearish and I sell a stock, each sale must be at a lower level than the previous sale.

When I am buying, the reverse is true. I must buy on a rising scale. I don’t buy long stocks on a scale down, I buy on a scale up.

Trading AtoZ comment: This is very similar to #6 but with an added benefit of adding to a winning position. This is thought of as a modern approach but clearly Jesse Livermore thought of this almost a century ago.

See position sizing strategies and money management.

17. Not taking the loss — that is what does damage to the pocketbook and to the soul.

Losing money is the least of my troubles. A loss never troubles me after I take it. I forget it overnight. But being wrong, not taking the loss, that is what does the damage to the pocketbook and to the soul.

Trading AtoZ comment: Having a clearly defined trading strategy greatly reduces this possibility.

See entries and exits and trading journal.

18. Markets are never wrong but opinions often are.

The market will often go contrary to what speculators have predicted. At these times, successful speculators must abandon their predictions and follow the action of the market. Prudent speculators never argue with the tape.

Markets are never wrong, but opinions often are. Remember, the market is designed to fool most of the people most of the time.

Trading AtoZ comment: You will not win every trade and you won’t be right every time either. Never fight the market or get angry with it.

See trading journal.

19. I trade on my own information and follow my own methods.

Trading AtoZ comment: You can take inputs from other sources but don’t rely on someone or something that may not be there when the time comes to close.

See trading journal.

20. I believe that having the discipline to follow your rules is essential.

Without specific, clear, and tested rules, speculators do not have any real chance of success.

Why? Because speculators without a plan are like a general without a strategy, and therefore without an actionable battle plan.

Speculators without a single clear plan can only act and react, act and react, to the slings and arrows of stock market misfortune, until they are defeated.

Trading AtoZ comment: Jesse Livermore is making the point that we at Trading AtoZ make repeatedly. Have your own strategy and follow it.

See trading journal.

21. Don’t try to play the market all the time.

Every once in a while, you must go to cash, take a break, take a vacation. Don’t try to play the market all the time. It can’t be done, too tough on the emotions.

Trading AtoZ comment: Just like any job you need a break every now and again. Even if you love trading you still need a break. The market will naturally give you time off when it is not in a state that suits your trading style.

22. Know yourself.

A man must know himself thoroughly if he is going to make a good job out of trading in the speculative markets.

Trading AtoZ comment: This comes with experience, but you must learn from your experiences. Having a clearly defined strategy, documenting your trades and then learning and refining your strategy is key.

See trading journal.

23. If you can’t sleep at night because of your stock market position, then you have gone too far.

If this is the case, then sell your position down to the sleeping level.

Trading AtoZ comment: This is a personal favourite of mine and one that has stuck with me since I first read the book over 25 years ago. If you can’t sleep then you need to alter your position sizing strategy.

See position sizing strategies.

Suggested Reading

If you want more of Jesse Livermore you can read all of his exploits in Reminiscences of a Stock Operator, available from our suggested reading section.

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