📖Jesse Livermore
Continuous Improvement System
Treat investing as a craft that can always improve.
Review every investment decision — wins and losses — to improve your system. The best investors treat investing as a craft that can always be refined.
🏠 Everyday Analogy
📖 Core Interpretation
Jesse Livermore treats survival as the first objective. Limiting permanent capital loss, controlling leverage, and avoiding single-point failure are prerequisites for long-term compounding.
💎 Key Insight：Post-mortem analysis drives systematic improvement.
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❓ Why It Matters
A single large drawdown can erase years of progress. Risk control is not timidity; it is the operating system that keeps compounding alive.
🎯 How to Practice
Define downside scenarios before entry, cap position size, avoid fragile leverage, and maintain liquidity so mistakes remain survivable.
⚠️ Common Pitfalls
Equating volatility with all forms of risk
Oversized positions without an exit plan
Using leverage to compensate for uncertainty
📚 Case Studies
1
Pre‑Crash Speculative Peak (1929)
Seeing speculative frenzy and weakening tape, Livermore sold short into the 1929 peak rather than argue that prices were irrationally high.
✨ Outcome：Gained a vast fortune during the crash by aligning with the market’s downward move, proving that ignoring the market’s message is costly.
2
1907 Panic Bear Raid (1907)
Seeing repeated failure of rallies and persistent selling pressure, Livermore judged the line of least resistance to be downward and aggressively shorted stocks during the 1907 Panic.
✨ Outcome：Earned several million dollars, reinforcing his principle to follow the market’s dominant trend, not opinions.
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