📖Jesse Livermore
Pivotal Points
Enter only at pivotal points when momentum shifts.
Wait for pivotal points before acting. These are moments when the market is ready to make a significant move.
🏠 Everyday Analogy
📖 Core Interpretation
Jesse Livermore advocates a repeatable process: define criteria, execute consistently, and review decisions against evidence. Process quality drives outcome consistency.
💎 Key Insight：Pivotal points are moments when a stock breaks out of consolidation or establishes a new trend. These are low-risk, high-probability entry points. Before these moments, the market is in equilibrium. Wait for the pivot—it signals that big money is taking a position. Premature entry costs you money and mental capital.
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❓ Why It Matters
Without process, there is no reliable feedback loop. Structured execution and review improve decision quality over time.
🎯 How to Practice
Run a decision loop of research, thesis, execution, and post-mortem; document assumptions and update playbooks with evidence, not hindsight bias.
🎙️ Master's Voice
Losing money is the least of my troubles. A loss never bothers me after I take it. But being wrong and not taking a loss - that is what does damage.
Livermore's wisdom about losses: the loss itself is not the problem. Refusing to admit the loss, hoping for recovery, is what destroys traders. Taking losses cleanly preserves both capital and psychology.
⚔️ Practical Guide
✅ Decision Checklist
- Am I willing to take this loss?
- Am I hoping instead of acting?
- Is denial causing more damage?
📋 Action Steps
- Take losses cleanly and quickly
- Accept losses as part of trading
- Never let denial compound losses
🚨 Warning Signs
- Refusing to take losses
- Hoping for recovery
- Denial about losing positions
⚠️ Common Pitfalls
Having opinions without execution criteria
Reviewing outcomes but not decisions
Abandoning rules during volatility spikes
📚 Case Studies
1
Union Pacific Breakout (1907)
Livermore bought Union Pacific as it broke through resistance, confirming a pivotal point during the 1907 panic rally.
✨ Outcome：Rode the sharp advance, captured large profits by selling into strength as momentum slowed.
2
General Motors Top (1929)
He identified a pivotal point as GM and leading stocks failed to make new highs despite market euphoria before the crash.
✨ Outcome：Sold short after confirmation of weakness, profited heavily during the subsequent 1929 market collapse.
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