📖Jesse Livermore
Position Sizing Discipline
Size positions based on conviction and risk.
The size of your position should reflect your conviction and the risk involved. Never bet so large that a single mistake can wipe out your portfolio.
🏠 Everyday Analogy
📖 Core Interpretation
Jesse Livermore views portfolio construction as risk architecture. Allocation, position sizing, and rebalancing rules determine whether you can stay disciplined across market regimes.
💎 Key Insight：Proper position sizing prevents catastrophic losses.
AI Deep Analysis
Get personalized insights and practical guidance through AI conversation
❓ Why It Matters
Without portfolio rules, decisions become reactive and concentrated. Sustainable returns come from controllable risk exposure, not one-off bets.
🎯 How to Practice
Set target allocation by risk tolerance, rebalance by rules rather than headlines, and prevent hidden concentration from dominating portfolio behavior.
⚠️ Common Pitfalls
Diversifying superficially without true risk balance
Skipping rebalancing rules and drifting style
Judging portfolio health by short-term returns only
📚 Case Studies
1
Panic of 1907 Short Trade (1907)
Livermore read the tape and saw relentless selling pressure in leading stocks, confirming a major liquidation wave despite optimistic headlines.
✨ Outcome：Built large short positions, profited massively as the market collapsed, then covered near the lows to lock in gains.
2
1929 Market Top Warning (1929)
Tape action showed abnormal volatility, heavy distribution, and failing rallies in key leaders, contradicting public enthusiasm.
✨ Outcome：Moved heavily short into the crash, earning millions as prices cascaded lower while others were ruined by the downturn.
See how masters handle real scenarios?
30 real investment dilemmas answered by legendary investors
Explore Scenarios →