If you want to turn stocks into a second career to support your family, this article can at least help you avoid 10 years of detours.

1. Core logic: use discipline to combat human weaknesses.

The essence of Livermore's approach is to lock in risks using 'batch buying and selling + strict stop-loss' to allow profits to grow naturally. In simple terms, it's about prioritizing survival before pursuing growth.

Start with 20%; acknowledge mistakes, and increase positions when correct.

First buy a 20% position. This is a 'trial position'; even if you make a mistake, the loss is manageable.

If you buy incorrectly: stop-loss at a 10% drop immediately. Do the math: a 20% position dropping 10% results in only a 2% loss of total funds, which is manageable. If you buy correctly: if it rises 10%, increase the position by 20%, and if it rises another 10%, increase by another 20%, and finally increase by 40% in the last wave. The more it rises, the more you dare to add, letting profits run.

Profit-taking point: as long as it hasn't dropped by 10%, hold on; if it drops by 10%, liquidate all positions.

2. Understand the operational details from the images.

1. Trial and error and stop-loss diagram: draw a '20% buy-in line' on the left, and a '-10% stop-loss line' below it, labeling it 'loss only 2% of total funds.' This visually shows 'small mistakes don't hurt the capital.'

2. Position ladder diagram: start with a 20% position, and add a level of 'increased position' for every 10% rise.

Steps (20% → 40% → 60% → 100%), with arrows indicating 'profits increase with position.' 3. Profit-taking trigger diagram: draw a '-10% profit-taking line' at the highest point, labeling it 'liquidate if broken,' and write next to it 'preserve 90% of the winning harvest.'

3. The underlying logic of buying and selling: don't get it reversed!

Many people lose money on 'buying at low prices' and 'random selling.' Livermore already made this clear long ago:

Look at trends when buying stocks, not prices: no matter how high the stock price is, as long as it is rising, there is an opportunity; no matter how low the price is, if it keeps falling, don't touch it. A 20% trial position is to confirm 'this stock is really rising.'

Selling stocks requires patience; don't go for an all-or-nothing approach: for example, if you have 50,000 shares, it's difficult to sell them all at once— the market can't absorb that much. You need to observe when buying activity is strong and sell in batches. Remember: the price at which you can sell smoothly is the real profit.

4. The key to execution: first look at the market, then take action.

1. Look at the overall market: if the market is falling, even the best methods struggle to make money; the best time to act is when the market stabilizes.

2. Stick to a fixed strategy: don't buy more just because you 'feel it will rise,' and don't avoid stop-loss just because you 'don't want to part with it.' The lesson from 2017: discipline is 100 times more reliable than intuition.

3. Use small losses to exchange for large gains: even if you are wrong 5 times out of 10 trades, losing 2% each time, if the 5 times you are right includes one 20% gain, it can cover all your losses. This is Livermore's 'survival philosophy.' Finally, I want to say: making a living from stocks is not about luck; it relies on 'replicable rules.' The difficulty with Livermore's method is not understanding it, but implementing it. But as long as you can execute it strictly, reducing 10 years of detours is not an exaggeration.