Three Stock Market Trading Lessons From Jesse Livermore

If you’ve been day trading for some time now, you’ve probably heard of trading stops over and over again that they seem like cliche already. Don’t over trade. The market it always right. Use stop losses. Always trade with the primary trend. These are only a couple of basic stock market trading lessons that traders have heard from the experienced investors and applied for themselves.

Any day trader can master trading strategies. What’s difficult is the psychological pitfalls which make trading an arduous task. The trader may be skillful but that’s not enough to succeed. He must be disciplined, first and foremost, to succeed in the stock market. By sticking to a stock market trading method that has been tried and tested, he can make this work to his favor.

Enter Jesse Livermore who has made a series of trading mistakes before he earned huge profits. Here are three lessons in order for stock market trading made easy.

1. Lose to learn

Losing, according to Livermore, was painful but it was a lesson he had to learn. “When you know what not to do, then you know what to do to win.”

He also adds that traders cannot learn a lot from winners because they take care of their traders. The losers, on the other hand, can teach new traders lessons that they will remember for a lifetime. By not making the same mistake the next day, they can always regard trading as a new opportunity every day. Stock market trading now is affected by lessons from the past.

2. Study market trends and conditions

Livermore succeeded because he observed the market, stocks and fellow traders. By observing, he figured out the best tips. For him, traders must know how to make money so that he could appraise his conditions. The best tip he could give to other traders is to study stock market trading now.

By grasping the general principle, then traders can practice their own trading strategies and check whether these will work for them. If not, they can always change it.

3. Buy and Sell Stocks

Livermore buys stocks as soon as these hit high. This brings him profits. He also buys as cheap as possible and go short at the top prices. But the important thing in buying and selling is to do these at the right time. Prices either move up or down, depending on its resistance to the stock market.

He reminds traders to always be on their guard and control their emotions, especially fear and greed – because giving in to these two can make them trade without thinking and lose money. These are important stock market trading lessons that every traders should master.

Traders are lucky to have Livermore share his experience on the stock market trading method. They can learn from his mistakes and at the same time they can also apply what he did especially if they wish to succeed.

How To Get Started in Market Trading Anxiety Free and Profitably

The newcomer to market trading could be forgiven for looking elsewhere than the markets to begin trading right now. The level of potential risk faced by practising the complex range of trading choices out there is enough to make a seasoned trader’s head spin, let alone allow their accounts to tail spin.

So what is the point in looking further into investment strategies which can potentially wipe out your trading account in one fell swoop? The simple answer: NO POINT AT ALL. A simple answer to the unnecessary complexity of market trading and high risk is in a simple financial fixed odds strategy.

Simplify your variables, protect your trading account, achieve consistent wins and continue to learn and adapt your strategies with firm foundations. All of these results are possible with binary trading, which is why more experienced traders are increasingly adapting their trading patterns to this new way to achieve consistent profits no matter what the market is doing.

If you are wondering right now if this sounds too good to be true, let’s look at how it compares to traditional market trading investment strategies being pushed by brokers less concerned about the specific needs of the newcomer.

FACT: Spread betting and futures trading strategies, whilst popular, offer high risks to the inexperienced trader with potentially limitless losses.

FACT: Experienced traders seeking more security and consolidation of capital in unpredictable markets are increasingly recognising the value of financial fixed odds betting methods and re-focussing their investments here. Their similarity to futures and spread-betting because they operate on a points system give them added attractiveness.

Here’s how binary betting is the safer, better option:

Let’s say you wish to day trade and you think that the market on this day is going to rise overall.

You open a binary bet and are quoted a price of 48 for the UK market to close higher for that day, for example. You decide to risk £5 per point. Binary bets work on a price of 0 – 100 which means that if you win, you will earn 52 x £5 i.e. £260. This figure is the 100 points – 48 (cost of the bet) x the amount of your stake, (being £5). Had the market gone against you, you would know in advance that your loss would be exactly your stake x quoted points; i.e. 48 x£5… £240. Simple, predictable and manageable.

Now let’s instead say we opened a spread bet and the market stands at 5200 and again you choose to risk £5 per point, expecting the market to rise. For every point the market moves up you gain £5 and for every point the market moves down you lose £5. Let’s also say you place a stop at 5100, just in case the market should move down, against you.

With the binary bet you need not care how far the market moves one way or another. All you need is for the market to close higher by the end of the day to win. Simplification of the variables involved makes it easier to manage your money.

With the binary bet you know your maximum win being 52 x £5 = £260 and your maximum loss is £48 x £5 = £240.

The spread bet is a different story; your whole level of profit or loss is DEPENDENT on how far the market moves during the day. If the market, for example, dropped in early trading and you hit your stop at 5100, that would be the end of your trade and you would have lost £500 (i.e.: 100 point drop to your stop x £5 per point.)

Even if the market did close higher without hitting your stop first and closed at 5220 your win would still be less than the binary bet, as your win would be 20 x £5 being £100, whereas the binary bet would win £260.

Your only other alternative, to take the stop out on the spread bet could open you up to unlimited losses. Say the market fell 250 points on that day, you would lose £1,250 whereas your maximum loss with the binary bet would only ever be £240.

In fact the only time you would gain more with the spread bet versus the binary bet is if the market did not touch your stop and actually closed higher than 53 points up on the day.

Combination strategies can certainly be lucrative, but as a beginner, it would be financially prudent to limit your variables and focus on building solid foundations to make your experience of trading not only enjoyable but also more profitable in the longer term.

The binary bet suits all markets: forex trading, shares and commodities and can be employed over different time frames to suit your schedule.

It is no coincidence that there is an increasing groundswell of traders who agree that binary bets and fixed odds products are an excellent tool for both new traders and more experienced traders alike. Find out more about how you might best learn to use binary trading to build a solid foundation for your future trading career with financial fixed odds strategies from the specialists at Elm Trader.

Trade Your Plan and Plan Your Trade in the Stock Market Trading System


Trade your plan, plan your trade is one of the common advices in the field of trading and it is not just a funny remark that traders express. Do you know how popular trend followers and expert traders like Jerry Parker, John Henry and Bill Dunn do it? Exactly. In the stock market trading system, they trade their plans and plan their trades. Here are some of the common tips on how they do it in their style.

Importance of stock market trading education

Would you ride your car and not know where you are heading? Probably not. A trader without a concrete trading plan is similar to a driver without the knowledge of where they will be going. If you have no direction or any idea where you are heading, how will you get there? Trading education greatly encourages traders to know as much as they can on the stock market before they proceed with their trading plan.

What makes up the stock market trading activity?

A lot of traders remind themselves to plan their trade but forget to do it. They do not see what an important stock market trading activity this is. When things go wrong, they get into trouble and watch their accounts blow up. Thus, the discipline and patience of the trader are in question. The discipline of making a trading plan is in question. Successful traders will tell you they constantly make trading plans and tell you that it is important.

Stock market trading explained

They should always keep their plan simple. There is a lot of information on the internet and there are also numerous trading tips and strategies under stock market trading explained. A lot of experts claim that traders use this and that. However, it is of vital importance that these tips simple and easily understood by everyone. How can a person plan their trading business, if they are unable to understand the different principles under this field?

Change. Nothing is permanent in this world but change. It may sound very ironic but it is true that change is one of the prime characteristics of the trading market. It is unpredictable and constantly changing. Nonetheless, the trading system still encourages the traders to have a plan that can work despite the changes.

If you plan to be a successful trader, you must make a solid trading plan and stick to it in managing your trades as well as your trading business in general. Stock market trading education can give traders the 411 they need about this.