How to Trade in Stocks is a practical trading guide published in 1940 by Jesse Livermore, a legendary Wall Street trader. Its core lies in a systematic trading framework centered on "following the trend + key pivot points + risk management". Unlike Reminiscences of a Stock Operator, which leans more toward narrative storytelling, this book focuses on replicable, real-world trading methods and stands as a classic textbook on trend trading.
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As we all know, market prices are forever fluctuating up and down in constant motion. It has always been this way in the past, and it will remain so in the future. In my opinion, behind all those major price movements, there must lie an irresistible driving force. Knowing this alone is entirely sufficient. If you insist on digging into every single reason behind price fluctuations—being overly meticulous and curious—you will only be gilding the lily. The risk of doing so is that your thinking may become clouded and overwhelmed by trivial details. As long as you promptly recognize that a significant market movement has indeed occurred, then steer your speculative vessel along with the tide, you will be able to profit from it. Never bargain with the market, and above all, never dare to go against it.
Never add to a losing position at lower prices in an attempt to average down the cost.
The vast majority of speculators suffer from one common flaw—being eager for quick gains and always craving to get rich overnight.
Such speculators are never satisfied. They stake everything on a single throw, constantly pouring all their energy or capital into trades until a miscalculation occurs somewhere and disaster finally strikes.
Speculators should regard this as an inviolable rule of conduct: whenever closing out a profitable trade, always withdraw half the profits and deposit them in a safe to build up savings. The only money a speculator can truly earn from Wall Street is the cash withdrawn from their account after closing a successful trade.
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