The Pivotal Point

jamesmith

Jesse Livermore wrote:

"Whenever I have had the patience to wait for the market to arrive at what I call a Pivotal Point before I started to trade; I have always made money in my operations."

Consider the chart on the left. The price had been trending downwards before rallying from a low of 40c. The rally could not be maintained, however, and the stock has retreated to 40c again. 40c has become what Jesse Livermore called a pivotal point. Any significant move either upwards or downwards from the pivotal point would be traded by Livermore.

If the stock were to break below, say, 37c, Livermore would sell short. If it were to break above, say, 43c, Livermore would buy. He would observe the price action carefully after the buy because 49c - the high of the earlier rally - is another pivotal point. If the price failed to rally above 49c - again by 3c, say - Livermore would exit from the trade.

Livermore said:

"I never benefited much from a move if I did not get in at somewhere near the beginning of the move. And the reason is that I missed the backlog of profit which is very necessary to provide the courage and patience to sit thourgh a move until the end comes - and to stay through any minor reactions or rallies which were bound to occur from time to time before the movement had completed its course."

anne

summer123

Jesse Livermore wrote:

"Whenever I have had the patience to wait for the market to arrive at  ...
jamesmith 发表于 2010-8-10 17:53

NZX

usamonkey

cc2008

Poo

hillcrest

songjiang

hillcrest

典型的追涨杀跌，but it works

jamesmith

典型的追涨杀跌，but it works
hillcrest 发表于 2010-8-11 22:14

     还有一个重点是要等, have the patience to wait for the market to arrive at what I call a Pivotal Point

ilvmm

good one