Thread by @shiftingshares

Reminiscences of a Stock Operator is a must-read for traders.

It follows the life of legendary trader Jesse Livermore who made $100,000,000 shorting the market in 1929.

Here are 10 of Jesse's timeless trading tips.

//THREAD//

1. "There is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again."

People say charts are silly. But charts are the collective money-weighted sum of emotion.

2. "A prudent speculator never argues with the tape. Markets are never wrong – opinions often are."

You can lose your opinion or you can lose your money.

Stocks can begin to fall long before the true reasons are apparent.

3. "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."

Stocks trade along the lines of least resistance.

Jesse bought new highs & sold new lows.

4. "He will risk half his fortune in the stock market with less reflection that he devotes to the selection of a medium-priced automobile."

You can control the stock, the entry, exit, position size, risk mgmt, your mindset..

You're only gambling if you want to be.

5. "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 benefits from their mistakes."

If you trade with no edge then you're providing liquidity for those that do.

6. "It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!"

You don't go bust taking profits.

But you also don't get rich scalping in a raging bull market either.

There are trades to scalp and trends to hold.

7. "One of the most helpful things that anybody can learn is to give up trying to catch the last eighth – or the first. These two are the most expensive eighths in the world."

You will rarely print the ding-dong highs and lows.

Let someone else lose money going for them.

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

Your biggest enemy in trading isn't other traders, market makers, or brokers. It's you.

You're the one that will break your rules, succumb to FOMO, and lack discipline.

9. "Stocks are never too high for you to begin buying or too low to begin selling."

Stocks that are up several-fold can continue to rise sharply.

Stocks that are down 50% can always fall another 100%.
The lowest price is always 0p.

Buy what goes up and sell what goes down.

10. "People who look for easy money invariably pay for the privilege of proving conclusively that it cannot be found on this earth."

Most traders lose.

As Edwin Lefevre concludes: "The big money in booms is always made first by the public - on paper. And it remains on paper."

Please RT the first tweet if this thread was useful.

You can also follow @shiftingshares for more threads on trading and investing.

https://twitter.com/shiftingshares/status/1423193937691414535

You can also sign up for my monthly newsletter for three trade ideas, two market insights, and one book review.

It's free.

But if you don't like it - unsubscribe.
I won't take it personally.

shiftingshares.com/newsletter