Jesse Livermore's Strategy
Financier Jesse Livermore is known to many thanks to Edwin Lefevre's book "Reminiscences of a Stock Operator," which is very popular among traders.
In this book, the financier shares his trading principles, although he lacks a clear trading plan, as we are presented with when describing trading strategies.
In reality, there was no clear strategy, only general principles that allowed him to make money.
Perhaps this was because Jesse primarily relied on fundamental analysis and market patterns in his trading, and he also manipulated the market through rumors.
Thus, the main trading principles on which Livermore based his strategy were:
2. Before making a transaction, independently assess the real value of shares or other assets, as the market price does not always correspond to the real value.
3. By owning information, you own the exchange – if you know the reason for the rise or fall of the price, you can confidently make transactions; it is precisely knowledge that gives you the opportunity to earn.
4. Hold on to profitable trades while they are profitable; this rule is what allows you to earn the maximum amount of money.
5. In case of mistakes, leave the market as cheaply as possible, that is, if you see that the deal is starting
cause losses, and there is confirmation of your mistake, close the position immediately.
6. When making large trades, act gradually to avoid attracting the market's attention, otherwise it will react to large volumes, and you will not be able to close your positions at the desired price.
7. News only influences the market if it is backed by big money, that is, if after the news is released, large players enter the market and transaction volumes begin to increase.
To be honest, Jesse Livermore's strategy is more suitable for a large investor with the ability to influence the market through large trade volumes. His trading experience is practically impossible to apply to Forex.
Therefore, most strategies published on websites are nothing more than the invention of their authors. To see this for yourself, read the book " Reminiscences of a Stock Operator ."
Perhaps this book will help you truly understand how the market functions and, based on this knowledge, develop your own effective strategy.
