Memoirs of a Stock Hand digest (EXT)

• Remember, driving the stock market is not a rational, logical or purely economic factor, driving the stock market is never change the nature of people. It will not change, because it is our nature. ^[4]
• There is nothing new in Wall Street or in stock speculation. What happened in the past will happen again and again in the future, again. This is because the human nature does not change, it is the human nature based on the emotions that make people become stupid. I believe this. ^[4]
• Both cows and bears can make money, but pigs will be killed.
• Hope is one of the distinguishing features of humanity, and fear is another notable trait, but once you stir the two emotions of hope and fear into speculation, you are in dire danger, because you tend to be confused by two emotions, reversing their position--and hopefully when you should be afraid. When there should be hope, but panic restless.
• Never share a low-loss position. Be sure to carve this idea deep into your head.
• The real market does not end in one day from the beginning. The real market will take a while to complete its final phase.
• Do not bargain with the market, the most important, never dare to fight against it.
• I prefer to use the two words "uptrend" and "downtrend", and they aptly express what the market is about to happen in a certain amount of time. Further, if you think the market is about to enter an upward trend and buy it, a few weeks later, after a second study concludes that the market will turn to a downward trend, you will find it easy to accept the fact that the trend is reversed. Conversely, if the market is in a clear ' bull ' or ' bear ' view, and your point of view is confirmed by the market, now it is much harder to change the mindset.
• By the way, whenever I lose patience, it's not the time to wait for the key to come, but the time to make a quick profit without a disorderly trading attempt, I always lose money.
• Care about doing things right, not worrying about making money.
• It is more important to buy at the right time than to buy it as cheaply as possible.
• If you want to play this game, you have to believe in yourself and believe in your own judgment.
• My play is to predict what's going to happen from Think big.
• The certainty of loss will not annoy me, but if I do not stop in time, this will be a real injury to wealth and spirit.
• There are no parties in the stock market, there is no empty side, only the right side.
• Ordinary people do not want to be told whether this is a bull market or a bear market, they just wanted to know which stocks to buy, which to sell, they hope for nothing, or even unwilling to think.
• Obviously, you can't sell a stock unless someone is willing to buy it, especially if you're doing a big deal, which needs to be kept in mind.

Livermore believes that the stock market is one of the hardest places to succeed, involving many people and humanity. This is also a difficult place to show the director, because it is difficult to control and overcome human nature. Livermore is very interested in the psychological aspects of the market, once went to the psychology course, the effort is no less than research securities. He is very hot in understanding every aspect of the market, even though most people may not think of those areas and the securities industry on top, and he is willing to seize every opportunity to improve the skills of operation. From 1892 to 1940, Livermore actively participated in the stock operation for 48 years, spending countless times of ups and downs, bankruptcy and amazing wealth. In the end, he developed several strategies for profitable operation.

First, not everyone is fit to operate the stock. Foolish, lazy, emotionally unbalanced, especially those who want to get rich overnight, are not suitable for this line. A cool mind is a key quality of operation success, and it is the only way to maintain a healthy mental balance-not to be led by hope or fear. Livermore that the following three qualities are indispensable.

① controlling emotions (controlling the psychological aspects of each trader)

② has the knowledge of economics and the fundamentals of the boom (this is the necessary wisdom to understand what some events might do to markets and stock prices)

③ to be patient (willing to let go of the profit, is the outstanding trader different from the average trader's characteristics)

In addition, he believes the following four key skills and traits are essential.

① observation----just look at the factual information.

② memory-remember key events to avoid repeating them.

③ Math-Understanding numbers and fundamentals. This is the talent of Livermore.

④ Experience-Learn from your experiences and mistakes.

Second, frequent trading (daily or weekly operation), is the loser's play, will not achieve too much success. There are many opportunities to operate a stock, but in some cases it should be scaling back and never operated. When the market lacks great opportunities, regular breaks and vacations are a wise choice. Because in a divided market, sometimes to the sidelines as a spectator, can be more than day by day observation of small fluctuations, more able to see the major changes.

Third, focus on operating the leading stocks in the new bulls market, which is to wait for the market to confirm which stocks are the leading stocks-usually the strongest stocks and then enter the operation. Centralized firepower operations lead stocks rather than diversifying into the entire market. Avoid weak industries, and weak stocks in those industries, i.e. not buying cheap stocks. Because weak and falling prices are always hard to pick up, traders have to limit themselves to buying stocks that are rushing forward and trading hot.

The majority of stocks in a certain group, the future Outlook is the same, that is, "the obvious tendency of the stock group." In the leading stock group, if the performance of a stock is unusually prominent, some shares of the same group will have a good performance. This is a very important factor in the price movement, so traders should always observe the stock in the same group and keep a close eye on the trend. If a stock in a strong market does not perform very well, the position of the group should be flattened, or any stock of that stock will be completely avoided.

IV, exploratory operation strategy and pyramid operation strategy. Before entering the operation, the most sensible way is to first understand the market trend, the markets will be integrated into the future, it is difficult to accurately predict the future direction of the market will be the reason. The market always does what it wants to do, not what the trader expects it to do. So, in the Bulls market, to do more, in the short market to vent. If the market is sideways, hold the cash and retreat until the signal confirms that the trend is going in a certain direction. It is difficult to find a change in the trend because it runs counter to the current ideas and practices of the trader. This is why Livermore started using a tentative action strategy.

The strategy is implemented by first establishing a portion of the stock position until the full number of shares that the investor initially intends to have. So it's important to decide how many shares to buy before you actually start buying. This is the product of proper fund management planning, and is also one of the important codes of Livermore. Set up a small position and test the stock. This is the tentative operation strategy, which aims to observe whether the preliminary study is correct. If the stock price moves in line with the plan, buy more, but buy the stock, the price must be more and more high, this is the pyramid operation strategy (in the stock up on the way to increase the operation). This strategy sounded very unorthodox at the time, because most people thought that to buy a bargain, it should be a low undertaking, rather than the more well paid. But the new Livermore that the recently bought stock, if the trend proves that the trader is right, let go buy more, traders get the reward can be icing on the cake, investment benefits to a higher level. He was always in the middle of the price hike, performing a high level of leveling operations, rather than falling on the low level.

Five, as soon as possible to recognize the appearance. Protect yourself, not affected by the wrong decision too much, the maximum loss of 10%.

Six, do not easily listen to other people's gossip and insider information. Do your homework, just look at the facts and understand the fundamentals.

http://wiki.mbalib.com/wiki/Jessi Livermore

Memoirs of a Stock Hand digest (EXT)