The Price Action Trader

  Welcome to part 2 of Lessons from a trading great - Jesse Livermore.  This is a continuation of lessons I picked from reading the book Reminiscences of a stock operator by Edwin Lefevre : Lets dive in: The speculator is not an investor. His object is not to secure a steady return on his money at a good rate of interest, but to profit by either a rise or a fall in the price of whatever he may be speculating in. Therefore, the thing to determine is the speculative line of least resistance at the moment of trading; and what he should wait for is the moment when that line defines itself, because that is his signal to get busy. Stocks are never too high to buy or too low to sell. The price, per se has nothing to do with establishing the line of least resistance. In trading, a man has to guard against many things, and most of all against himself - that is, against human nature. It is not wise to disregard the message of the tape, no matter what your opinion of the fundamentals is....

If you go online scouting for the best trading books, Reminiscences of a stock operator by Edwin Lefevre will always pop up among your searches. I consider it to be among the best trading books ever written. I have personally read it a couple of times and in today's blog I will be sharing the timeless lessons I got from the book. This is the first of several series I will be doing about this great book, I hope the lessons resonate with your trading journey and that they are helpful: A battle goes on in the stock market and the tape is your telescope. You can depend on it seven out of ten times. Whatever happens in the market today has  happened before and will happen again. Only play the markets when you are satisfied that precedents favored your play. There is a 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 man can have adequate reasons for buying or selling stocks daily. The desire for ...