I googled "Jessie Livermore quotes" just to find this quote. I also found a lost interview conducted by Edwin Lefevre on @crosshairtrader's blog here. I did all this because this is exactly where we are now I think. The broader market (S&P 500) gave a major signal yesterday on low relative volume breaking through resistance from the 2007 top. Today it tested it and held. But since no big money is really in this market it's all on low unconvincing volume. Where has the big money gone? Here:
"Washington, DC, January 11, 2012 - Total estimated outflows from long-term mutual funds were $5.59 billion for the week ended Wednesday, January 4, the Investment Company Institute reported today. Flow estimates are derived from data collected covering more than 95 percent of industry assets and are adjusted to represent industry totals."
The masses are yanking money out of this market as usual @ exactly the wrong time. So it's no ominous sign it's the masses wrong again! But I'm seeing us so called pro's doing something even worse.... Over analyzing, over indicating, over trading, over EVERYTHING! If your in winners just sit in them!!! The sea-saw of the past 6 months has traders stuck in action mode. Every blog I read is saying "Watch this" and "Do that" when it's really time to do nothing... But sit......... We owe it to Jessie Livermore!
Sure, the guy blew his own brains out in a hotel bathroom but that doesn't take away from his trading knowledge. I'd go as far as say it adds to what he left. How many times have you made a trading mistake and felt like eating a 45 caliber live round sandwich? Well, he had the heart to do it! We don't have to go that rout, we can learn from his mistakes. Our names may never be etched in stone like his but frankly I wouldn't want that. I want to make money off consistently good trades and that's it. Another livermore quote I love is this:
"It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level, which should show the greatest profit. And their experience invariably matched mine –that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn"
And he never lied right there traders.... He never lied!
Adding to this post traders it's time to be rare. It's time to be that rare man that Jessie spoke of. There will be a lot of news out ringing the sell alarm because there are powerful people outside this market. They want in and they want in at lower prices. For them to get in at lower prices you need to sell. Some will fall for it, don't be one. If you have good stocks at good prices HOLD THEM!