‘How to trade in Stocks’(III)
This week, we’ll continue with the remaining parts of ‘How to trade in Stocks’ by Jesse Livermore
Emotional Control
1. The stock market, with its allure of easy money and fast action, induces people into foolishness and the careless handling of their hard earned money.
To illustrate, you don’t have to get to work by nine and labour for eight hours a day. It is simply a paper transaction, requiring what appears to be no labour.
2. A good stock trader is like a well-trained professional athlete who must keep the physical side of their life in perfect form if they want to continue to be at the top of their mental form.
3. ‘Poise’ is one of the qualifications of a successful trader. A poised (沉著)person can handle their hopes and their fears in a calm manner. Together with patience, they must be cultivated. These virtues do not come automatically to the trader.
4. If you can’t sleep at night because of your stock market position, then you have gone too far. If this is the case then sell your position down to the sleeping level.
5. Remove hope from your trading lexicon (把'抱持希望' 從你的投資字典中刪去). Hoping a stock will do something is the true form of gambling. If you don not have good solid reasons for you to hold stock positions then move on to another more logical trade.
Timing rules
1. The temptation is strong to take fast profits or cover your trade solely out of fear of losing the profit on a correction. Be sure you have a good clear reason to enter a trade and be sure you have good clear reasons to exit your position.
2. Don’t anticipate. In a market moving sideways where stock prices are stagnant, you must wait until the market or the stock breaks out of this sideways channel in either direction.
3. Trade the leading stocks in the leading groups. Buy the strongest market leader in an industry group.
Source: https://www.vangoghmuseum.nl/en/prints/collection/p1199V2000
Source: http://thingfinder.blogspot.com/2019/01/the-visit-1931-by-edouard-vuillard.html
