Thread by @shiftingshares

Many people have read Reminiscences of a Stock Operator.

It’s a book based on the legendary trader Jesse Livermore.

But few people have read Jesse’s actual book: How To Make Money In Stocks.

Here’s a thread with some of the main points:

“The fruits of your efforts will be in direct ratio to the honesty and sincerity of your records, doing your own thinking, and reaching your own conclusions.”

Trading is an independent business. You must treat it as such to succeed.

Hobbies cost you. Businesses pay you.

“You can beat a horse race, but you can’t beat the races.”

Each of us is possessed with the common weakness of wanting to have an interest in every jackpot.

It is impossible to make money on every play.

You don’t need to play every hand.

“Never average a loss. Let that thought be written indelibly upon your mind.”

Profits take care of themselves. But losses never do.

Insure yourself by taking the first small loss in order to protect your capital.

Staying in business is always your first priority.

“If I were walking along a railroad track and saw an express train coming at me... I would not be damned fool enough not to get off the track and let the train pass by.”

Don’t be hesitant to sell. You can always get back in.

You owe the stock no loyalty.

“I know but one sure tip from a broker. It is your margin call.”

A margin call is a warning that should not be ignored.

Listen to it and take the necessary action.

Otherwise, you may find yourself out of business.

“One major mistake of all speculators is the urge to enrich themselves in too short a time.”

Big wins throw traders off balance.

Think about how much you can lose rather than how much you can win next time.

The problem with larger risks is that the bill always comes due.

“Rome was not built in a day.”

And no real movement of importance was over in a single day or one week.

It takes time to allow market moves to play out.

Only a fool thinks they must beat the market every single day.

Pick your plays.

“Whenever I have had the patience to wait for the ‘Pivotal Point’, I have always made money in my operations.”

The Pivotal Point was the point where a stock made a new high or a new low.

Either a new trend would begin or the price would reverse, allowing for a small loss.

“Everyone can tell you when to buy. But nobody can tell you when to sell.”

To tell you when to sell would place you in direct competition with his or her selling campaign.

Therefore, you will only ever find out after they have sold, and after the price has fallen.

“It cannot be said too often that in speculation and investment success comes only to those who work for it.”

No one is going to hand you a bag of easy money.

And if there was a bag of easy money lying around, no one would be forcing it into *your* pocket.

“Remember: there is always a reason for a stock acting the way it does.”

Stocks move the way they do for a reason.

But the chances are that you will not become acquainted with that reason until sometime in the future, when it is too late to act on it profitably.