Top 10 Jesse Livermore Quotes

Jesse Livermore still remains an iconic figure on Wall Street even to this day. His wisdom continues to inspire and guide old and new traders even decades after his time.

His story that you can start from nothing and become one of the wealthiest people in America is fascinating for every new investor who dreams of a life like this. Well at least for the glory part.

His life and career were filled with both remarkable successes and devastating failures, but through it all, he left behind insightful quotes and principles that give more clarity about the art of trading and the psychology of markets.

If you want to read his story in more detail, you can do it in another post that we made: Jesse Livermore - From Boy Plunger to Wall Street Legend

In the last chapter of his life, Jesse Livermore tried to collect all of his wisdom in one single book called “How to Trade in Stocks”.

There is one more book related to Jesse Livermore’s life and it is called “Reminiscences of a Stock Operator”

In this post, I want to share with you some of Jesse Livermore’s quotes and what knowledge you can take from them, and without further ado, let’s get started.

There is time to go long, time to go short and time to go fishing - by Jesse Livermore

Many new traders want to be super active in the markets, like what they see in movies about Wall Street.

In reality, if you’re just starting, all that quick trading can hurt your performance more than help.

Another common mistake is called “Revenge Trading”.

It’s when you’ve had some losses, and you try to make up for them by taking even more trades and using more of your money, thinking the market will make up for what you lost.

Markets are never wrong, opinions often are - by Jesse Livermore

As a new trader, you’ll likely seek out a mentor for valuable wisdom and guidance.

In today’s world, there are plenty of so-called “Gurus” who paint an overly rosy picture. They make it seem like you can turn a few hours of trading each week into millions of dollars within a year, which is far from the truth.

The reality is that trading and investing demand hard work and effort. Even someone as legendary as Jesse Livermore faced significant losses by following others’ advice. This even lead to a point where he went bankrupt.

Instead, seek out individuals who offer a real perspective on how trading and investing truly work. Learn from their experiences, and when the time is right, find your own vision and strategy for navigating the markets.

If you know something about the markets, something really, really important, please keep it to yourself - by Jesse Livermore

This quote can mean two things.

First, it’s about forming your own opinions in finance rather than trusting random internet sources.

Second, it highlights how important information is in trading and investing. If you get information like Company A buying Company B, you can use it to make money (but remember, insider trading is illegal).

Let me give you another example.

Imagine if you find a really good strategy that makes a lot of money. Now, if you tell everyone about it, there’s a good chance that the strategy might not work as well anymore. That’s because when many people use the same strategy, they can change how the market behaves, making the strategy less effective.

Taking the first small loss is wise… profits take care of themselves but losses never do - by Jesse Livermore

An essential rule in trading and investing is to set a “stop loss”. It’s really, really important.

In the world of trading, you can’t control everything, but you do have control over two things: how much you invest (your position size) and where you place your stop loss.

For example, a trader named Richard Dennis once conducted an experiment where he had his ‘Turtles’ take random positions.

Why?

Because he wanted to show that having a stop loss and managing your money properly is even more critical than finding the perfect trade setup.

In fact, the first lesson he taught his students was all about managing their money wisely. This shows just how crucial this aspect is in trading.

No man can always have adequate reasons for buying or selling stocks daily - or sufficient knowledge to make his play an intelligent play. - by Jesse Livermore

In this quote, Jesse Livermore is telling us not to make trading too complicated.

Some new traders believe that if they spend a lot of time researching and waiting for the perfect opportunity, they’ll always win.

But the truth is, it doesn’t work that way.

No one can be completely sure that every trade will be successful. That’s why it’s important to try different stocks, use tight stop losses, and search for trades where the potential reward is much higher than the risk.

Never try to sell at the top. It isn’t wise. Sell after a reaction if there is no rally. - by Jesse Livermore

No one can see into the future.

There’s no magical tool that works perfectly all the time, and there’s no crystal ball that tells you exactly when to buy or sell.

You’ll face losses in trading, and sometimes, even when you start off on the right track, you might end up breaking even or with a small loss.

That’s okay, and it’s something you need to get used to.

Many new traders tend to hold onto losing trades instead of closing them. They hope that if they keep their trade open long enough, the market will turn in their favor and they’ll make a profit.

But that’s not the best approach. To be a successful trader, you need to know when to get in and when to get out of a trade.

The game did not beat them. They beat themselves, because though they had brains they couldn’t sit tight. - by Jesse Livermore

Here’s another quote from Jesse Livermore, emphasizing the significance of understanding the psychology of the markets.

We’ve discussed a similar topic in this post, but it’s crucial for both new and experienced traders.

Knowing yourself is the key. You must recognize when it’s best to stay away from the markets and avoid trading too much.

The market is always right and you have to deal with it.

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. - by Jesse Livermore

In this quote by Jesse Livermore, he’s telling us that trying to pick the exact highs and lows in the market can be very costly for a trader.

One of the most common questions for new traders is when to get in and out of a trade. In my opinion, one of the most effective exit strategies is to sell when the market is strong.

You can make a lot of money by selling during a strong market, instead of trying to guess when the market will hit its highest or lowest point. That’s because it’s nearly impossible to predict when the market will change direction. By the time you figure it out, you might have already lost a big part of your profits.

This is a well-known strategy used by many successful traders, and I highly recommend learning more about it.

Experiences had taught me to beware of buying a stock that refuses to follow the group-leader. - by Jesse Livermore

This is something that a lot the successful traders a talking about. You can see it in Stan Weinstein’s book called “Secrets for Profit in Bull and Bear Markets”, you can see it in Mark Minervini’s book called “Trade Like a Stock Market Wizard” and you can see it in William O’neal called “How to Make Money in Stocks”.

You need to identify the group leaders, and the equities that everybody is buying at the moment.

Here is what Stan Weinstein shares in his book: “My studies have consistently shown that two equally bullish charts will perform far differently if one is from a bullish sector while the other breakout is in a bearish group. The favorable chart in the bullish group will often quickly advance 50 to 75 percent while the equally bullish chart in a bearish group may struggle to a 5 to 10 percent gain.”

The speculator’s deadly enemies are: Ignorance, greed, fear and hope. - by Jesse Livermore

Let’s be honest here.

A big part of this field is about understanding how your mind works. Many new traders struggle because they let their egos take control.

They want to always be right and have every trade to be a winner. When they do have a losing trade, they often hope the market will bounce back. Sadly, this usually leads to even bigger losses.

Trading and investing is a game where one person’s win is another’s loss (zero-sum game). If you’re not at your best, there’s a high chance you’ll lose money.

Psychology is a huge part of becoming a successful trader. This is why you have to eliminate feelings like ignorance, greed, fear, and hope.

It is a very old thing, this of noting the behavior of a stock and studying its past performances. - by Jesse Livermore

As a trader or investor, you can’t control many things, and predicting whether a trade will work out is impossible.

In this uncertain world, what you can do is study how stocks behaved in the past.

Keep in mind that on the other side of the computer, there’s another person making choices. This study can help you make more informed decisions.

If you notice that when certain conditions are met, a stock tends to behave in a certain way, it increases the likelihood that it will act similarly in the future.

Conclusion

For those just starting on the exciting journey of trading and investing, remember this: If you want to be a successful trader or investor, you have to learn from those who’ve walked this path before.

Let their stories inspire and guide you. The road may have twists and turns, but with a commitment to learning, adaptability, and a nation for knowledge, you’ll be better prepared for this chaotic world of investing.

Remember that every success story begins with a curious mind and willingness to learn. So, take all of the wisdom and information that you can and use it as a base for your trading and investing journey.