btw, w/this: “arm chair central banker”, does that include being able to hypothecate Currency from thin-air?
( ;

it could be all edited down to one rule-
“control your emotions”

How could that be said any better?

Bows to Ahab and his cursed wale.

this: “the best lesson is knowing when not to trade, to sit and watch, the hardest lesson of all.”
might be the wisest thing I’ve /heard/ from you..

w/that, remember “Trends remain, until they don’t.”

or, differently, “Fractal saturation can be a Big B..”
as intro. http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Benoit+Mandelbrot+Fractal+Economics

For example, on rule #1 I agree with the premise of the rule. But different markets require setting stops differently. For example, in a trending market, tight stops work and cutting quickly is a good formula. In sideways markets, stops need to be more flexible or you get hacked to death.

I love buying 52 week highs. But, the caveat is that this works when the market is in bull mode (above 50 and 200 day averages might be an objective standard). When things start getting soft, a lot of these 52 week highs fail at a very high rate (like now).

So yes, generally good rules. But some flexibility is required.

CC

http://www.chartsandcoffee.com

i don’t think Livermore was like a Soros. but he could spot trends and understood market dynamics. like if he had a huge position in Piggly Wiggly at 50 and needed to unload. he would use a little money to buy driving the stock up the 60, then started selling. suckers jump in to buy thinking they got a bargain, buying it all the way down. if he just dumped his position at 50, he would not have been able to sell it at 50. hedgies do that today. nothing is new.

he was so good at trading when he was young that many of the bucket shops back then wouldn’t let him trade, once they recognized him.

Lesson 3, about market leaders, he said you only trade the leaders, like Cisco and Intel during the Nasdaq’s run. he would probably say that this market is not a bull, since the new leaders cannot be the old leaders. the best lesson is knowing when not to trade, to sit and watch, the hardest lesson of all.

Was Livermore not a big-time speculator that actually moved the market himself with his trades?
If you have enough funds to do that, then the rules may apply to some extent. Also, you need a compliant general public that is prone to momentum speculation to follow you along. Do you have that righrt now?

My experience, even medicated bipolars have impulse control issues. Unmedicated ones are unmanageable.