Breakthrough buying, split position buying, adding to profit.

Understanding the King of Speculation Livermore's Breakout Buy Method with One Chart:
(1) First buy 20%;
(2) If you assume the wrong buy and the price drops by 10%, immediately cut losses, with a loss amount of 2% of the total position;
(3) If you assume the right buy and the price rises by 10%, immediately increase the position by 20%;
(4) If it rises another 10%, immediately increase by another 20%;
(5) For the last time, directly increase by 40%;
(6) Expand the gains, and hold as long as it does not fall below 10%;
(7) Once it drops by 10%, immediately sell the entire position.
The essence lies in finding high-probability trading opportunities, choosing suitable targets and timing for buying.

Trend Judgment and Acting Accordingly
(1) Recognize the Overall Trend
Livermore believed that making big money relied on the overall market trend rather than individual stock fluctuations. He actively identified the market's main trends and the line of least resistance, not limited by the stereotypical thinking of "bull market" or "bear market." For example, he shorted first and then went long in 1907, and shorted near high prices in 1929, both of which were highly profitable.
Follow the trend: Buy in an uptrend, sell in a downtrend, in alignment with market direction. When the market has no obvious trend, choose to wait and act after the trend becomes clear.

(2) Timing
Wait for Key Points: Livermore patiently waited for key trading points; for instance, he waited 6 weeks to buy Bethlehem Steel until the stock price broke through 100 points.
Act after confirming the trend: Do not enter the market early; decisively act after market changes confirm your viewpoint.

(3) Capital Management and Position Control
Exploratory Trading: Start with a small position, such as 20% of the planned position; if profitable, increase the position, but if losses reach a certain percentage (like a maximum of 10%), cut losses.
Refuse to add to losing positions: Do not increase positions to dilute costs while in loss, to avoid expanding losses.
Diversified Investment: Do not concentrate funds in one place to reduce the risk of putting all eggs in one basket.

(4) Strict Stop Loss and Take Profit
Decisive Stop Loss: Set a stop-loss point, such as a maximum loss of 10% on a single trade, and unconditionally liquidate to prevent losses from expanding.

Let Profits Run: When stocks rise, do not fear corrections; think about the reasons for the rise, do not rush to sell, and let profits continue to grow.

(5) Independent Thinking and Contrarian Thinking
Independent Analysis and Judgment: Do not easily trust rumors, rely on personal research for decision-making.
Contrarian Thinking: Be skeptical of the general market view, seeking trading opportunities contrary to market consensus.