Reminiscences of Stock Operator is written by Author “Edvin Lefevre”. This book is written on one of the greatest day trader of America i.e. “Jessee Livermore”. While the book or the biography shows a life journey of Jessee Livermore, there are few pointers/punches worth to be noted for a trader in stock market. I present you those pointers with a short explanation below:

• HISTORY REPEATS ITSELF. The movement in stock tends to repeat in future if they are relatable to some past movement. Hence, wait for your chance in a particular stock. When you see some relatable movement currently which could be related to the past, it might react the same way it had reacted in the past.
• THERE SHOULD ALWAYS BE REASON BEHIND YOUR TRADE. Don’t trade blindly. There can be reason like some indicators suggesting trade, or some news etc. Trading without any reason is mere a addiction and not a strategy/indicator.
• TRADE ON YOUR STRATEGY AND DON’T DEVIATE FROM IT. You will always make money when you are sure that you would be right. Why you don’t make money often is because you deviate from your strategy and lose money and thus end up being an ordinary trader and are not able to win big. Therefore, discipline is very much required to be intact with your defined strategy.
• DON’T TRADE ALL THE TIME. Trade only when your strategy suggests to do trade. Trading all the time will only take your money away, make sure you bet on right ones when times comes rather than betting on all things all at wrong times and losing money.
• YOU CANNOT TAKE SOME MONEY EVERYDAY. So, trade only when opportunity comes. Some people trade just because they had not in past few hours. There is not always a need to trade every day, sometimes opportunity just does not come and it is okay to not trade at all.
• LEARN FROM YOUR LOSSES AS WELL AS BIG PROFITS. So that you repeat the strategy/findings while in profit times and avoid the losses ideology/trade set-up. Always analyze after completing a trade, understanding where you went right/wrong and why. Maintaining a journal is highly advised.
• DON’T TRADE ALL YOUR CAPITAL. Always keep some money aside for multiple reasons. It helps in not keeping you completely out of something by losing all the capital. It is again a part of risk management.
• DON’T TRADE ON TIPS. WARNING, NOT AT ALL. Tips are biased most of the time. A man must believe in himself and his judgment if he expects to make a living at this game. Tips do not work (although sometimes you might get lucky).
• CHANGE TO TRADING SYSTEM SHOULD BE PROMPT. Your strategy might make you money for few years, but the market is never same all the time. Sticking on one strategy even if it’s not working for a long time is a loss making strategy. RELYING ON YOUR OLD SYSTEM IN NEW STOCK ERA WOULD ERODE YOUR MONEY.
• WHEN YOU KNOW WHAT NOT TO DO IN ORDER NOT TO LOSE MONEY, YOU BEGIN TO LEARN WHAT TO DO IN ORDER TO WIN.
• THE MORE WE BECOME SUCCESSFUL IN ONE STRATEGY, THE MORE WE BELIEVE THAT IT WOULD BE RIGHT, thus making us inelastic and sticky towards that one strategy only.
• IT NEVER WAS MY THINKING THAT MADE THE BIG MONEY FOR ME. IT ALWAYS MY SITTING TIGHT I.E. HOLDING IT TIGHT. These words state that, in order to win big you got to enter in a very high conviction trade and wait for it to realise. Sit Tight on the stock!!
• YOU CANNOT MAKE PROFIT IF YOU TRADE EVERY MOVE. Disregarding the big swing and trying to jump in and out for every small move is fatal. Nobody can catch all the fluctuations. So, it is always better to capture the big moves.
• MAKE A DO’S AND DON’T LIST. Every time I found the reason for a loss or the why and how of a mistake, I added a brand new don’t to my schedule of assets. Following these don’t list, i averted a lot of trading mistake and avoided unnecessary losses.
• DON’T CHANGE YOUR OWN OUTLOOK FOR A STOCK EVEN IF HIGHLY EXPERIENCED PERSON COMES AND SAYS YOU SO. Everyone trades based on their understanding, time frame and trading zone, listening to others take you nowhere and you tend lose. So, always listen to your own strategy and don’t get influenced by others comments or judgments, no matter whosoever it may be.
• Don’t always focus on charts and their technical lines; SEE A GENERAL PICTURE OF THE MARKET AND THE INDUSTRY. For earning with high probability, take the stocks whose general market is with the direction of your trade. This will increase the probability of better trades.
• A STOCK IS NEVER TOO CHEAP TO SELL OR DEAR TO BUY. It is stock market after all, the prices are driven by emotions and fear of losing out. This could drive the prices to the roof without any logical reasons. As our trader, our job is to only ride the rise and not try to find the true value.
• YOU CANNOT DETERMINE TOP/BOTTOM OF A STOCK. Better to be sure that Bull Run has ended rather than chasing the top of stock.
• TIMING IS IMPORTANT FACTOR, even if you know that it should be shorted, wait for engine i.e. market to heat up. Being bear/bull too early could be costly as you might get stuck in your trade. This mean even if you are bearish you could test the market movement in small quantity.
• IF YOU ARE ABLE TO READ GENERAL MARKET SENSE AND GENERAL INDUSTRY SENSE MORE CAUTIOUSLY AND INTELLEGENTLY, YOU ARE INCULCATING A HABIT OF EARING A KILLING IN THE STOCK MARKET.
• BEWARE OF LOSS AVERSION. Few points rally in a stock after a big fall seems pleasant and makes you hold the stock even longer. Be brave, sell the stock even if it is a loss. Holding stock and trying to validate the small up moves in your favor will get you into the ditch deeper.
• THERE IS ALWAYS GOOD REACTION ON PSYCHOLOGICAL MARK. I.e. crossing 100, 200 or even reaching 1trillion market cap or even in intraday where the price of stock is rounded off to 5^th points etc. There is opportunity at these levels.
• THE RECOGNITION OF OUR OWN MISTAKE SHOULD NOT BENEFIT US ANY MORE THAN THE STUDY OF OUR SUCCESSES. When you make a killing, understand why you were able to do so. If you are able to identify the patterns for these profitable killings, you get a money making winning strategy.
• CHARTS SHOULD BE READ TO DECIDE WHEN TO ENTER OR EXIT; it will not say you to enter at particular time on someday. The object of chart is to ascertain, how and when to trade and when it is wiser to buy then to sell.
• LINE OF LEAST RESISTANCE. It is the price point where the bid/asks are the least. It means, any big quantity can drive the price of the stock easily. This line of least resistance should be considered to trade efficiently for bigger orders.
• To ascertain general direction of market:: “IN BULL MARKET, BEAR NEWS ARE IGNORED AND BULL NEWS ARE EXAGGERATED. AND IN BEAR MARKETS, BULL NEWS ARE IGNORED AND BEAR NEWS ARE EXAGGERATED.
• IGNORE ANTICIPATING MOVEMENT IN RANGE BOUND MARKET. You might profit small by selling on top of range bound and buying on bottom of range bound. However, in a range bound market you will not be able to anticipate when the markets will break the ranges.
• IT IS INSEPRABLE IN HUMAN NATURE TO HOPE AND TO FEAR. When in a trade, if stocks move in our direction we tend to fear and book early profits. Also, when market goes against our trade, we hope and hold the stock for longer periods.
• ALWAYS SELL WHAT SHOWS YOU A LOSS AND KEEP WHAT SHOWS YOU A PROFIT. The above should be performed based on general market conditions. So, if markets are extremely good then keeping a profit is a better idea. If markets turn volatile/choppy, then it is better to book partial/full profits based on your risk management.
• DON’T ASSUME THE MARKET WILL PAY FOR YOUR EXPENSES. In the desire to earn from the market to pay for your expenses you will end up losing more and make a fool play in the trading strategy. When you trade to buy a particular object, there are high chances that you will take a bad trade.
• HUMAN PHYSCIOLOGY IS IMPORTANT PART IN TRADING. It will make you or break you as a trader.
• IF IN OVERALL BULL MARKET, THE INDIVIDUAL STOCK GETS DOWN, THERE IS GREAT DEAL OF WRONG IN IT. Even if there is no news regarding the stocks, it says that something insider has come out affecting the company. Be careful, observe these trends and trade accordingly.
• OBSERVATION, EXPERIENCE, MEMORY AND MATHEMATICS, THESE ARE WHAT THE SUCCESSFUL TRADER MUST DEPEND ON.
• MAKE GOOD OBSERVATION. It is a long hand in big play, you should observe chart/many other details and make something out of it always. Good Observation Skills is what helps in tapping the rare appearing opportunity.
• IGNORE COMPANY RELEASED STATEMENTS AND NEWS. The news released by KMP, BOD’s or shareholders etc. are always for a motive. Stay away as they might not be honest or true, unless you understand these persons nature, promises and their execution skills.
• DO NOT TRUST BROKERAGE REPORTS. They suggest buying on basis of current earning performance of the company. Whereas, the stocks currently in trade has already taken the effect of future 6-9 months prospect or maybe even more.  So, study what is going to happen in future (Time frame depends) and then trade on that basis. That is why relying on stock report and recommendation is not a good option.

So, these were the major pointers noted by me. This book is excellent book for the traders and definately a read. It is amongst the “Hot” books amongst the traders and there are lot of principles that could be applied to the real life.

Thank You!!

Disclaimer: I have tried my best to evaluate the content from book into short pointers and summary, and where necessary added my own point of view. By no means, this summary is an infringement to any involved party. It is just a short representation form the orignal content.