How to Trade: Jesse Livermore
I was bearish in a bear market. That was wise. I had sold them too soon. That was costly. My position was right but my Play was wrong.
.... it was all very well not to lose your bear position in a bear market, but that at all times the tape should be read to determine the propitiousness of the time for operating.
If you begin right you will not see your profitable position seriously menaced, and then you will find not trouble in sitting tight.
He should wait until the tape tells him that the time is ripe.... Therefore the thing to determine is the speculative line of least resistance at the moment of trading; and what he should wait for is the moment when that line defines itself, because that is his signal to get busy.
If you have timed the movement correctly, your first commitment will show you a profit at the start. From then on, all that is required of you is to be alert, watching for the appearance of the danger signal to tell you to step aside and convert paper profits into real money.
Remember this. When you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap benefits from their mistakes.