To be fair, Jesse Livermore didn’t always follow his own rules.
As a result, he often lost millions of dollars. But he never made excuses and he never blamed them on “bad luck.”
He always analyzed the underlying cause of his mistakes...and always came to the same conclusion:
Every time he lost money it was because he was swayed by his own emotions.
That was my “aha” moment.
Livermore’s systematic method coupled with a powerful, easy-to-use, mechanical system was the best way for investors to create consistent long-term wealth in the stock market.
The system had to do two things:
1. Find the best stocks.
2. Identify the best market conditions to buy them in.
These could not be popular stocks in the media or well known by the public.
And they had to be stock under accumulation by large institutions....companies with the potential of rising 100% to 1,000%.
It took me over a decade, and more than $500,000 in development costs, to finally incorporate all of Livermore’s rules into a simple signal system not subject to emotion or knee-jerk reactions.
Let me explain further.
The main reason investors lose money in the stock market is they end up on the wrong side of the trend.
They get emotional and buy the wrong stocks at the wrong time.
Often buying in a downtrend and destroying their wealth. They’re swimming against the current which is always a bad idea, right?
Remember Livermore's market trend rules. Rules that made him a billionaire trading stocks, and not from management fees like so many of today’s Wall Street billionaires.