📖Jesse Livermore
Risk-First Approach
Consider the downside before the upside.
Before considering how much you can make, consider how much you can lose. Risk management is not about avoiding risk entirely, but about understanding and controlling it.
🏠 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：Risk management is about understanding, not avoidance.
AI Deep Analysis
Get personalized insights and practical guidance through AI conversation
❓ 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
Shorting the 1929 Crash (1929)
Identified market weakness, started a core short position, then pyramided correctly as the decline gained momentum, adding to winners only when prices moved further in his favor.
✨ Outcome：Amassed one of his greatest fortunes as the market collapsed, while avoiding reckless over-sizing early.
2
Livermore Short Before Crash (1929)
Livermore shorted leading stocks as the 1929 bubble peaked. When some positions initially moved against him, he refused to add to losers, keeping risk capped.
✨ Outcome：Market crashed, his existing shorts paid off massively, validating not averaging down into a rising market.
See how masters handle real scenarios?
30 real investment dilemmas answered by legendary investors
Explore Scenarios →