How to Trade in Stocks. The Livermore Formula for Combining Time Element and Price - Jesse L. Livermore 1966 - Investors’ Press, New Jersey - First Investors’ Press Edition The only book by one of Wall Street’s most flamboyant stock traders, this scarce work featuring the first in-depth explanation of the famed Livermore Formula, his highly successful trading method still in use today, and containing 16 full colour charts.

Jesse L. Livermore, widely believed to be the subject of Edwin Lefèvre’s fictional biography and investment classic
Reminiscences of a Stock Operator, made and lost several fortunes and was even blamed by some for the stock market crash of 1929.
  Intrigued by Livermore’s career, financial writer Edwin Lefèvre conducted weeks of interviews with him during the early 1920s. Then, in 1923, Lefèvre wrote a first-person account of a fictional trader named “Larry Livingston,” who bore countless similarities to Livermore, ranging from their last names to the specific events of their trading careers. Although many traders attempted to glean the secret of Livermore’s success from Reminiscences, his technique was not fully elucidated until this work was published in 1940. How to Trade in Stocks offers an in-depth explanation of the Livermore Formula, the trading method, still in use today, that turned Livermore into a Wall Street icon.

Jesse Livermore was a loner, an individualist-and the most successful stock trader who ever lived. Written shortly before his death in 1940,
How to Trade Stocks offered traders their first account of that famously tight-lipped operator's trading system. Written in Livermore's inimitable, no-nonsense style, it interweaves fascinating autobiographical and historical details with step-by-step guidance on: Reading market and stock behaviors; Analyzing leading sectors; Market timing; Money management; Emotional control.

We know that prices move up and down. They always have and they always will. My theory is that behind these major movements is an irresistible force. That is all one needs to know. It is not well to be too curious about all the reasons behind price movements. You risk the danger of clouding your mind with non-essentials. Just recognize that the movement is there and take advantage of it by steering your speculative ship along with the tide. Do not argue with the condition, and most of all, do not try to combat it.

I know but one sure tip from a broker. It is your margin call. When it reaches you, close your account. You are on the wrong side of the market. Why send good money after bad? Keep that good money for another day. Risk it on something more attractive than an obviously losing deal.

When you are handling surplus income to do not delegate the task to anyone. Whether you are dealing in millions or in thousands the same principal lesson applies. It is your money. It will remain with you just so long as you guard it. Faulty speculation is one of the most certain ways of losing it. Blunders by incompetent speculators cover a wide scale.

I have warned against averaging losses. That is a most common practice. Great numbers of people will buy a stock, let us say at 50, and two or three days later if they can buy it at 47 they are seized with the urge to average down by buying another hundred shares, making a price of 48.5 on all. Having bought at 50 and being concerned over a three-point loss on a hundred shares, what rhyme or reason is there in adding another hundred shares and having the double worry when the price hits 44? At that point there would be a $600 loss on the first hundred shares and a $300 loss on the second shares. If one is to apply such an unsound principle, he should keep on averaging by buying two hundred shares at 44, then four hundred at 41, eight hundred at 38, sixteen hundred at 35, thirty-two hundred at 32, sixty-four hundred at 29 and so on. How many speculators could stand such pressure? So, at the risk of repetition and preaching, let me urge you to avoid averaging down.

References: Dennistoun 369. Zerden 6.

Octavo. pp. [6] 11-112. Pages 81-111 contain sixteen charts printed in red, blue, and black. Title with the Livermore crest, showing the ticker tape, market key, and chart sheets. In publisher's burgundy cloth, front cover stamped in gilt with the Livermore crest, spine lettered in gilt.
Table of Contents The Challenge of Speculation When Does a Stock Act Right? Follow the Leaders Money in the Hand The Pivotal Point The Million Dollar Blunder The Livermore Market Key Explanatory Rules Charts and Explanations for the Livermore Market Key.
  Condition: Near fine, small mark to front panel, minor fading to spine, smoothed crease to top edge of index page else internally fine.   Ref: 106988   Price: HK$ 1,000