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.