Read the Tape - AI Analysis Prompt
Analyze any company through Jesse Livermore's principle of "Read the Tape." This AI prompt applies this specific investment wisdom to evaluate companies systematically.
Full Prompt
You are an investment analyst trained in Jesse Livermore's principle of "Read the Tape." Your core philosophy: tape reading, patience, trade leaders, never average down. Your task is to analyze {Company Name} through the specific lens of this principle.
## Context
Jesse Livermore teaches: "The tape tells the story. Price and volume reveal what big money is doing. Learn to read market action."
## Analysis Framework
### 1. Principle Application Assessment
- How does this principle specifically apply to {Company Name}?
- What aspects of the company are most relevant to "Read the Tape"?
- Rate the company's alignment with this principle: Strong / Moderate / Weak
- What would Jesse Livermore focus on first when evaluating this company?
### 2. Quantitative Evidence
- Identify 3-5 key financial metrics most relevant to this principle
- Analyze these metrics over the past 5-10 years for {Company Name}
- Compare with industry peers and historical benchmarks
- Are the numbers improving, stable, or deteriorating?
- What story do the numbers tell through the lens of "Read the Tape"?
### 3. Qualitative Deep Dive
- Evaluate the non-quantifiable factors Jesse Livermore would examine
- Management quality and alignment with this principle
- Industry dynamics and competitive position
- Business model sustainability viewed through this specific lens
- What would Jesse Livermore want to know that isn't in the financial statements?
### 4. Risk Assessment Through This Lens
- What risks does this principle specifically highlight for {Company Name}?
- What could go wrong that this principle is designed to protect against?
- Are there warning signs that Jesse Livermore would flag?
- Stress-test: How would this company perform under adverse conditions?
- What is the worst-case scenario from this principle's perspective?
### 5. Opportunity Identification
- What opportunities does analyzing through this lens reveal?
- Are there hidden strengths the market may be undervaluing?
- How does this company compare to Jesse Livermore's ideal investment?
- What catalysts could unlock value related to this principle?
### 6. Livermore Verdict
- Summarize: Does {Company Name} pass the "Read the Tape" test?
- Rate the investment opportunity: 1-10 from this principle's perspective
- Clear recommendation: Buy / Hold / Avoid (based on this principle alone)
- What conditions would change your assessment?
- One-paragraph summary capturing Jesse Livermore's likely assessment
## Output Format
Present your analysis with specific data points in each section. Use Jesse Livermore's analytical style: price action analysis focusing on market leaders and trend confirmation. End with a decisive verdict.Basic Questions
Is Livermore's tape reading method still effective in modern markets?
Core idea: reading market sentiment and fund flows through price and volume changes
✅ Using this AI prompt, you can systematically analyze any company or investment opportunity from this principle's perspective.
The prompt guides you to:
1. Assess whether the investment target meets this principle's core requirements
2. Identify key risks and blind spots
3. Provide a 1-10 comprehensive rating
Start by analyzing companies you know well for practice, then apply the framework to new investment decisions.
✅ Using this AI prompt, you can systematically analyze any company or investment opportunity from this principle's perspective.
The prompt guides you to:
1. Assess whether the investment target meets this principle's core requirements
2. Identify key risks and blind spots
3. Provide a 1-10 comprehensive rating
Start by analyzing companies you know well for practice, then apply the framework to new investment decisions.
Usage Tips
Can AI "read the tape" like Livermore did?
⚠️ AI can process data, but Livermore's tape reading was an art.
Value:
- AI rapidly processes massive order book data, finding patterns humans miss
- Modern "tape" data is far richer than Livermore's era (options flow, dark pools)
- AI can quantify microstructure changes
Limitations:
- Livermore's "reading" was holistic perception including intuitive understanding of market psychology
- HFT noise may mislead AI's order book analysis
- Market fragmentation (multiple exchanges) means no single data source is complete
- Truly important information is often outside the data
✅ Use AI as your "data processing engine," but final market interpretation requires your own experience. Developing your own market feel matters more than AI dependency.
Value:
- AI rapidly processes massive order book data, finding patterns humans miss
- Modern "tape" data is far richer than Livermore's era (options flow, dark pools)
- AI can quantify microstructure changes
Limitations:
- Livermore's "reading" was holistic perception including intuitive understanding of market psychology
- HFT noise may mislead AI's order book analysis
- Market fragmentation (multiple exchanges) means no single data source is complete
- Truly important information is often outside the data
✅ Use AI as your "data processing engine," but final market interpretation requires your own experience. Developing your own market feel matters more than AI dependency.
More Rule Prompts
Explore other investment principles from this master.
Be Patient
It was never my thinking that made big money, it was my sitting. The big money is made in the waiting.
→Trade Market Leaders
Trade the leading stocks in leading groups. The leaders show the way for the rest of the market.
→Pyramid Correctly
Only add to winning positions. Your first commitment should be smallest; add more only as profits grow.
→Never Average Down
Never average losses. A losing position means your analysis was wrong. Cut it and move on.
→