Understanding the King of Speculation Jesse Livermore's Breakout Buying Method:
(1) First buy 20%;
(2) If you assume you bought incorrectly, sell immediately with a stop loss at a 10% drop, with a loss amounting to 2% of the total position;
(3) If you assume you bought correctly, increase your position by 20% at a 10% rise;
(4) If it rises another 10%, increase your position again by 20%;
(5) On the last occasion, directly increase by 40%;
(6) Expand the victory results, and as long as it doesn't drop below 10%, hold on;
(7) If it drops by 10%, sell all positions immediately.
The essence lies in finding high-probability opportunities to operate, as the market spends most of its time waiting, and one should minimize trial and error costs as much as possible.
However, this is suitable for building positions in strong coins/stocks during a bull market, not applicable in a volatile market.
1️⃣ What is Jesse Livermore's core investment philosophy? Here’s a brief summary:
🔺 Trend is paramount: He emphasizes following market trends, believing that there are clear bullish upward trends and bearish downward trends in the market, and investors should identify and follow these trends, avoiding going against them.
🔺 Risk control: He values stop-loss and capital management, setting stop-loss points for every trade to prevent losses from widening, and reducing risk through diversification and position control.
🔺 Independent thinking and patient waiting: He advocates for independent market analysis, not relying on others' opinions, and patiently waiting for appropriate trading opportunities, such as price breakthroughs at key resistance levels or pullbacks to support levels.