Jesse Limermore’s Methods of Trading in Stocks (Book Review)

Jesse Livermores Methods of Trading in Stocks Book Review2Jesse Livermore’s Methods of Trading in Stocks, by Richard D. Wyckoff is a collection of articles and interviews. These columns originally appeared in the Magazine of Wall Street, of which Wyckoff was the editor.

As long time readers of StockIdeas.org know, Jesse Livermore is one of the greatest speculators of all times. And I’ve already read a few books about him, like: Reminiscence of a Stock Operator and How to Trade in Stocks – both of which gave insight into Livermore’s market methodology. So you can understand why I was excited when I discovered that these lost volumes had finally been brought back into print.

Further, I also recently read and reviewed Richard Wyckoff’s own book, Studies in Tape Reading. I found his approach to be matter-of-fact, simple to understand and most of all, time-tested. While these approaches were written about in the early 1920, they’ve stood the test of time. And I was optimistic Jesse Livermore’s Methods of Trading in Stocks would present more of the same.

I was not disappointed. Let me tell you why.

Overview of Jesse Livermore’s Methods of Trading in Stocks:

As I mentioned, this book is actually a collection of articles and interviews. They were written at the time when Jesse Livermore was the most well-known speculator in the markets. And while Livermore historically avoided the spotlight, he did agree to share his methods in this one set of interviews. Neat, right?

So as you might expect, the book is actually quite short. I would almost call it a pamphlet. That means, at only 32 pages, it’s a very easy read, and each chapter is completed self-encapsulated. But you might be wondering, is a book that short worth reading?

Emphatically, the answer is yes. Although the book is simple, it’s still profound. To paraphrase Livermore himself, there’s nothing new in speculation because human nature doesn’t change. The tactics and strategies he used over 100 years ago are still effective today because our brains and emotions still work the same way. Hope and fear spring eternal.

And that leads my to my favourite part about this unique trading book.

The Best Part of Jesse Livermore’s Methods of Trading in Stocks:

For me, the best part in Jesse Livermore’s Methods of Trading in Stocks is the fact that the book is so simple. And I’ll tell you why.

It’s because in this day and age of online brokers and advanced technical analysis, there’s a tendency to overcomplicate the market. CNBC has 24 hours to fill, 7 days a week. So you can’t blame them for manufacturing drama and complicating the market analysis.

On the other hand:

If Jesse Livermore can lay out his methodology for trading and speculating in stocks in just over 30 pages – and still have the lessons be applicable 100 years later – then it just goes to show that  playing an active hand in the market doesn’t have to be that complicated. You see…

Livermore’s words are a great reminder that you can keep things simple. It’s the classic advice you’ve heard a million times before: go with the trend, cut your losses and let your winners run, and don’t listen to random tips from people on the street.

Of course, there are some nuances. And putting this advice into practice is easier said than done. But I found it incredibly encouraging to see that the approach Livermore espoused is similar to the best practice guidance you hear today. Speculating isn’t complicated, us humans just like to make it that way.

So if you’re looking for a simple to read introduction to the kind of trading advice that’s stood the test of time, then Jesse Livermore’s Methods of Trading in Stocks might just be the right book for you. Since it’s only a couple dollars and under 35 pages, I highly recommend you check it out on Amazon.

For more information, you’re welcome to watch the video book review below to get even more information on this unique trading and speculating book.

Jesse Livermore’s Methods of Trading in Stocks – Video Book Review: