Jesse Livermore's Trading Mindset Pearls of Wisdom

I recently published a list of what I consider the best books for the development of Trader Mindset. Of the all books on the list, the book which had the most favourable responses was ‘Reminiscences of a Stock Operator’. It is testament to the enduring popularity of this book that almost a century after it was written its popularity remains undiminished. 

The book is full of such valuable insights and treasured nuggets, some of which have passed down into trading folklore.

This article is a collection of some of the quotes related to trading mindset rather than trading actions. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #1 Losing money is the least of my troubles. A loss never troubles me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocket book and to the soul. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #2 People who look for easy money invariable pay for the privilege of proving conclusively that it cannot be found on this earth. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #3 One of the most helpful things that anybody can learn is to give up trying to catch the last eighth – or the first. These two are the most expensive eighths in the world. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #4 There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #5 It was never my thinking that made the big money for me, it always was sitting, got that, sitting tight. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #6 The human side of every person is the greatest enemy of the average investor or speculator. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #7 Wishful thinking must be banished.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #8 Markets are never wrong - opinions often are. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #9 Big Movements Take time to Develop

Jesse Livermore’s Trading Mindset Pearls of Wisdom #10 It is not good to be too curious about all the reasons behind price movements.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #11 It is much easier to watch a few than many.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #12 Patterns repeat, because human nature hasn’t changed for thousands of year

Jesse Livermore’s Trading Mindset Pearls of Wisdom #13 The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.  

Jesse Livermore’s Trading Mindset Pearls of Wisdom #14 The study of the psychology of speculators is as valuable as it ever was. I think the clearest summing up of the whole thing was expressed by Thomas F. Woodlock when he declared: "The principles of successful stock speculation are based on the supposition that people will continue in the future to make the mistakes that they have made in the past.".

Jesse Livermore’s Trading Mindset Pearls of Wisdom #15 I am carrying so much cotton that I can't sleep thinking about it. It is wearing me out. What can I do? Sell down to the sleeping point, answered the friend.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #16 I don’t know whether I make myself plain, but I never lose my temper over the stock market. I never argue with the tape. Getting sore at the market doesn’t get you anywhere.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #17 He must fear that his loss may develop into a much bigger loss and hope that his profit may become a big profit. It is absolutely wrong to gamble in stocks the way the average man does. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #18 It is what people actually did in the stock market that counted, not what they actually said they were going to do.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #19 A man must know himself thoroughly if he is going to make a good job our of trading

Jesse Livermore’s Trading Mindset Pearls of Wisdom #20 No trading rules will deliver a profit 100 percent of the time.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #21 Don’t become an involuntary investor by holding onto stocks whose price has fallen. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #22 A man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #23 Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #24 Few people ever make money on tips. Beware of inside information. If there was easy money lying around, no one would be forcing it into your pocket. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #25 A man cannot be convinced against his own convictions, but he can be talked into a state of uncertainty and indecision, which is even worse, for that means that he cannot trade with confidence and comfort. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #26 I owe my early success as a trader… not to brains or knowledge, because my mind was untrained and my ignorance was colossal. The game taught me the game. And it didn’t spare the rod while teaching. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #27 If the unusual never happened there would be no difference in people and then there wouldn’t be any fun in life. The game would become merely a matter of addition and subtraction. It would make of us a race of bookkeepers with plodding minds. It’s the guessing that develops a man’s brain power. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #28 They say you never grow poor taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #29 If I learned all this so slowly it was because I learned by my mistakes, and some time always elapses between making a mistake and realizing it, and more time between realizing it and exactly determining it. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #29 I was utterly free of speculative prejudices. The bear side doesn’t appeal to me any more than the bull side, or vice versa. My one steadfast prejudice is against being wrong. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #30 It isn’t a hunch but the subconscious mind, which is the creative mind, at work. That is the mind which makes artists do things without their knowing how they came to do them. Perhaps with me it was the cumulative effect of a lot of little things individually insignificant but collectively powerful. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #31 I never argue with the tape. To be angry at the market because it unexpectedly or even illogically goes against you is like getting mad at your lungs because you have pneumonia. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #32 If a man is both wise and lucky, he will not make the same mistake twice. But he will make any one of the ten thousand brothers or cousins of the original. The Mistake family is so large that there is always one of them around when you want to see what you can do in the fool-play line.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #33 A man has to guard against many things, and most of all against himself—that is, against human nature. That is the reason why I say that the man who is right always has two forces working in his favor—basic conditions and the men who are wrong.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #34 The average speculator has arrayed against him his own nature. The weaknesses that all men are prone to are fatal to success in speculation. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #35 The speculator’s chief enemies are always boring from within. It is inseparable from human nature to hope and to fear.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #36 A man cannot be convinced against his own convictions, but he can be talked into a state of uncertainty and indecision, which is even worse, for that means that he cannot trade with confidence and comfort.

Jesse Livermore’s Trading Mindset Pearls of Wisdom #37 The training of a stock trader is like a medical education. The physician has to spend long years learning anatomy, physiology, materia medica and collateral subjects by the dozen. He learns the theory and then proceeds to devote his life to the practice. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #38 An old broker once said to me: “If I am walking along a railroad track and I see a train coming toward me at sixty miles an hour, do I keep walking on the ties? Friend, I side-step. And I do not even pat myself on the back for being so wise and prudent.” 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #39 Observation, experience, memory and mathematics—these are what the successful trader must depend on. … He must bet always on probabilities—that is, try to anticipate them. 

Jesse Livermore’s Trading Mindset Pearls of Wisdom #40 There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. No many can always have adequate reasons for buying and selling stocks daily – or sufficient knowledge to make his play an intelligent play.

Article by Steven Goldstein

Steven Goldstein is a Performance, Team and Executive Coach who focuses on helping improve the 'mindset' aspects of Risk and Financial Markets' people and businesses.

Core to Steven's work is the belief that everyone has the potential, often latent or hidden within them, to surpass where they are and to grow into what they want to be. He views trading as two concurrent battles a person engages in; one with the markets and one with their self. To succeed a person must win both. As a coach, Steven works predominantly on helping his clients win the battle with their self.    

Prior to becoming a coach Steven worked for more than 20 years as a Rates and FX trader at some of the world’s leading investment banks. See Steven's Full Profile.

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