Showing posts with label Franklin O. Ochoa Jr.. Show all posts
Showing posts with label Franklin O. Ochoa Jr.. Show all posts

Wednesday, July 10, 2024

S&P 500 vs Tri-Annual, Yearly, Quarterly, Monthly, Weekly & Daily Pivot Levels

S&P 500 E-mini Futures (weekly candles) vs Tri-Annual Pivot Levels (for 2022-2024).
Based on spectrum analysis, Sergey Tarassov forcasted a multiyear high in US-stocks sometime 
around August 2024 between the crests of the 40 Month Cycle and the 42 Month Cycle
By then the tri-annual R1 level at 6,019 could well be reached. R2 is at 6,928.
 
S&P 500 E-mini Futures (weekly candles) vs Yearly Pivot Levels (for 2024).
Tri-Annual and Yearly Pivot Points and Levels are suitable for long-term investing or swing trading
with a time frame of several months to a year or more.

S&P 500 E-mini Futures (weekly candles) vs Quarterly Pivot Levels (for Q3 July-September 2024).
Quarterly Pivot Points and Levels are suitable for medium-term trading with a time frame of several 
weeks to a few months. They are useful for identifying intermediate support and resistance levels, 
trend continuations, and potential corrections.
.
S&P 500 E-mini Futures (daily candles) vs Monthly Pivot Levels (for (July 2024).
Monthly Pivot Points and Levels are ideal for short-term to medium-term trading 
with a time frame of several days to a few weeks.

S&P 500 E-mini Futures (daily candles) vs Weekly Pivot Levels (for July 07-12, 2024).
Weekly Pivot Points and Levels are suitable for short-term trading with a time frame of one to several
days to a week, to identify short-term support and resistance levels, trend continuations, and potential reversals.

S&P 500 E-mini Futures (4 hour candles) vs Daily Pivot Levels (for July 10, 2024).
Daily Pivot Points and Levels are ideal for short-term and intraday trading with a time frame of several hours to a day in order to identify short-term support and resistance levels, trend reversals, and potential breakouts. Daily Pivots can be used to make quick trading decisions, adjust stop-losses, or set price targets for the current trading session.
 

Pivot Points, Support and Resistance levels are calculated based on previous high, low, and close prices. These levels can identify areas, where price may bounce, reverse or break through, and where to set entry, stop-loss and take-profit orders. This technique is valid on various timeframes. Common types are Floor (Trader) Pivots a.k.a. Standard or Traditional Pivots (= all charts above), Central Pivot Range (CPR), Fibonacci, Woodie, Classic, Camarilla and DeMark Pivot Points, each type having their own calculation method.
 

See also:

Sunday, August 13, 2023

The Central Pivot Range & Floor Trader Pivots | Franklin O. Ochoa Jr.

Floor Trader Pivots have been around for a long time and many traders have used these pivots to master the market for decades. Larry Williams re-popularized the formula by including it in his book, How I Made One Million Dollars Last Year Trading Commodities (1979). He described the "Pivot Price Formula" that he used to arrive at the next day's probable high or low. The concept of the Central Pivot Range was developed by Frank Ochoa (2010) based on Mark Fisher's Pivot Range (2002).  

Here is is one example of a trading strategy: Buy at the Central Pivot Range's support in an uptrend and sell at resistance in a downtrend. Filter all Floor Trader Pivots except S1, R2, and the central pivot point when the market is in an uptrend. In a downtrend, all pivots are filtered except R1, S2, and the central pivot point. If the market is trending higher, one should look to buy at support at either S1 or the central pivot range with the  target set to a new high at either R1 or R2.
 
Likewise, if the market is trending lower, look to sell at resistance at either R1 or the central pivot range with the target set to a new low at either S1 or S2. It takes a lot of conviction to break a trend and push prices in the other direction, which means to be able to identify the change in trend early enough, to profit from a very enthusiastic price move, which can last a day, or even weeks. Once a severe breach occurs through the first layer of the pivots, one typically sees a shift of the trend toward the opposite extreme. That is, a bullish trend becomes a bearish trend, and a bearish trend becomes a bullish trend. Two key buying or selling zones, S1 and the central pivot range in an uptrend, and R1 and the central pivot range in a downtrend.
 
CPR as a Magnet for Price 
The central pivot range (CPR) can have an amazing magnetic effect on price that can lead to a high percentage fill of the morning gap. If price opens the day with a gap and the centrals are back near the prior day's close, you typically see a fill of the gap a high percentage of the time, given the right circumstances. The central pivot point is reached 63 percent of the time at some point during the day. When the market gaps at the open, the trade inherently has a 63 percent chance of being a winner. Gaps that are too large don't tend to fill as easily as those that are moderate in size. Pivot range placement should be at, or very near, the prior day's closing price. If the range is too close to price, however, it could hinder the market's ability to fill the gap. Don’t wait all day for a gap to fill, because the longer the trade takes, the more unlikely it is to fill. Gap fills in general, seem to work best during earnings season. If price gaps up to R1 resistance, or down to S1 support, these pivots can serve as a barrier to a breakaway trade, which leads to a higher percentage of filled gaps. A gap down requires much more confirmation, conviction, and volume in order to fill the gap on most occasions.
 
Breakaway Strategy 
When the market has formed a narrow-range day (NR4, NR7) in the prior session, the pivots are likely to be tight, or narrow. Narrow pivots foster breakout and trending sessions. If the market opens the session with a gap that is beyond the prior day's price range and beyond the first layer of the indicator, the chances of reaching pivots beyond the second layer of the indicator increase dramatically. Price opened the day with a gap that occurred beyond the prior day's price range and above R1 resistance. When this occurs, one should study price behavior very closely in order to determine if the pivot that was surpassed via the gap will hold. If the pivot holds as support, you will look to enter the market long with your sights set on R3 as the target. The third and fourth layers are 30 percent more likely to be tested when price gaps beyond the first layer of the indicator. When trading the Breakaway Strategy using the Floor Trader Pivots, one should typically like to see the gap occur beyond the prior day's range and value, preferably just beyond the first layer of the indicator. In addition, the gap should occur no farther than the second layer of the pivots.  
 
CPR Width Forecasting
Pivot Width is the distance between the top central pivot (TC) and the bottom central pivot (BC). Since the prior day's trading activity leads to the creation of today's pivots, it is extremely important to understand how the market behaved in the prior day in order to forecast what may occur in the upcoming session. More specifically, if the market experienced a wide range of movement in the prior session, the pivots for the following day will likely be wider than normal, which usually leads to a Typical Day, Trading Range Day, or Sideways Day scenario. Conversely, if the market experiences a very quiet trading day in the prior session, the pivots for the following day are likely to be unusually tight, or narrow, which typically leads to a Trend Day, Double-Distribution Trend Day, or Extended Typical Day scenario.  
 
 
Pivot width analysis works best when the range of movement is distinctly high or low, thereby creating unusually wide or narrow pivots If the pivot width is not distinctly wide or narrow, it becomes very difficult to predict potential trading behavior with any degree of certainty for the following session. An unusually narrow pivot range usually indicates the market is primed for an explosive breakout opportunity. A tight central pivot range can be dynamite. Be aware when a day has the potential to start off with a bang. A day that has a wide range of movement, like a Trend Day, will lead to the creation of an abnormally wide pivot range for the following session. In this instance, you typically see a quieter atmosphere in the market, as dictated by the wide-set pivot range. Sometimes, a wide-set pivot range leads to nice trading range behavior that allows you to pick off quick intraday swings in the market, much like the Trading Range Day. The key to trading a day when the centrals are wide is to identify the day's initial balance after the first hour of trading. If the initial balance has a wide enough width, you are likely to see trading range behavior within the high and low of the first sixty minutes of the day. If the initial balance coincides with key pivot levels, you have highly confirmed support and resistance levels that offer great opportunities for short-term bounces.

The market has a much better chance to reach pivots beyond the second layer of the Floor Pivots indicator if the central pivot range is unusually narrow due to a low-range trading day in the prior session. Conversely, a market is less likely to reach pivots beyond the second layer of the indicator if the central pivot range is unusually wide due to a wide-range trading day in the prior session.
  
CPR Trend Analysis 
Buying the dips means buying the pull-backs within an uptrend, while selling the rips means selling (or shorting) the rallies within a downtrend. One of the best ways to buy and sell pull-backs in a trend is to play the bounces off the central pivot range, which is the method many professionals use. A strong trend can usually be gauged by how price remains above the bottom central pivot (BC) while in an uptrend, and below the top central pivot (TC) while in a downtrend. Once price violates this paradigm by closing beyond the range for the day, you see either a change in trend or a trading range market develop. Pull-back opportunities usually occur early in the session, with follow-through occurring the rest of the day. Any pull-back to the range early in the morning is a buying or selling opportunity depending on the direction of the trend. Once in the trade, the goal is to either ride the trade to a prior area of support or resistance, or to a new high or low within the trend.


Two-Day CPR Range Relationships
Understanding how the current central pivot range relates to a prior day's CPR will go a long way toward understanding current market behavior and future price movement. Where the market closes in relation to the pivot range gives you an initial directional bias for the following session. The next day's opening price will either confirm or reject this bias Higher Value relationship. Current day's pivot range is completely higher than the prior day's pivot range.
 
 
Two-Day Unchanged CPR Range = Sideways or Breakout Bias
The current pivot range is virtually unchanged from the prior day's range. Of the seven two-day relationships, this is the only one that can project two very different outcomes, posing a bit of a dichotomy. On the one hand, a two-day neutral pivot range indicates that the market is satisfied with the facilitation of trade within the current range. When this occurs, the market will trade quietly within the boundaries of the existing two or three day trading range. On the other hand, however, a two-day unchanged pivot range relationship can indicate the market is on the verge of a major breakout opportunity, similar to when the market has formed two, or more, points of control that are unchanged. The outcome is typically driven by the opening print of the current session. If the market opens the day near the prior session's closing price and well within the prior day's range, the market will likely lack the conviction necessary for a breakout attempt. If the opening print occurs beyond the prior day's price range, or very close to an extreme, the chances are good that a breakout opportunity may lie ahead.

Daily CPR Width and Range Relationships.

Outside CPR Range = Sideways Bias
This happens when the current day's pivot range completely engulfs the prior day's range. This two-day relationship typically implies sideways or trading range activity, as the market is happy with the current facilitation of trade in the current price range. A wide range will usually indicate trading range behavior This relationship is much more telling if the current day's pivot range is significantly wider than the prior day's range. Otherwise, merely engulfing the prior day's range without the necessary width may lead to the same result, but with less accuracy.

Inside CPR Range = Breakout Bias
It occurs when the current day's pivot range is completely inside the prior day's range. This two-day relationship typically implies a breakout opportunity for the current session, as the market is likely winding up ahead of a breakout attempt. If the market opens the day beyond the prior day's price range, there is a very good chance that initiative participants will enter the market with conviction in order to push price to new value. If the market opens the day within the prior day's price range, a breakout opportunity could still be had, but with much less conviction. This two-day relationship doesn't occur frequently. On the days when it develops, usually lead to major trending sessions. If the prior day's pivot range is noticeably wider than the inside day pivot range, you are more likely to see a breakout opportunity, especially if the current day's pivot range is very narrow. If both pivot ranges are virtually the same width, but technically meet the inside requirement, the rate of success will noticeably drop.

Daily CPR Width and Range Relationships and Floor Trader Pivot Levels.

Higher CPR Range = Bullish Bias
Current day's pivot range is completely higher than the prior day's pivot range. The most bullish relationship of the seven two-day combinations Initial directional bias will be bullish. However, how the market opens the day will either confirm or reject this initial bias. If the market opens the day anywhere above the bottom of the pivot range, you will look to buy a pull-back to the range ahead of a move to new highs. This is especially the case if price opens above the top of the range. As long as the market opens the following day above the bottom of the pivot range, but preferably above the top of the range, any pull-back to the range should be seen as a buying opportunity.

Lower CPR Range = Bearish Bias 
It occurs when the current day's pivot range is completely lower than the prior session's range. This is the most bearish two-day relationship and typically leads to further weakness should the current day's opening price confirm the directional bias. If price opens the session below the central pivot range, you will look to sell any pull-back to the range ahead of a drop to new lows within the current trend. If price opens the following session below the top of the pivot range, but preferably below the bottom of the range, any pull-back to the range should be a selling opportunity. It must be reiterated, however, that just because a two-day relationship implies a certain behavior in price, this bias must be confirmed by the opening print. While a Lower Value relationship is the most bearish two-day relationship, perhaps the biggest rallies occur when the opening print rejects the original bias.

Overlapping Higher CPR Range = Moderately Bullish Bias
This offers a moderately bullish outlook for the upcoming session. The top of the range is higher than the top of yesterday's range, but the bottom of the range is lower than the top of yesterday's range. The same closing and opening price dynamics are in effect for this relationship as well.

Overlapping Lower CPR Range = Moderately Bearish Bias 
The current day's bottom central pivot is lower than the bottom of the prior day's range, but the top of the current day's range is higher than the bottom of the prior day's range.It indicates a moderately bearish outlook for the forthcoming session. If price opens within or below the pivot range, price should continue to auction lower. Any pull-back to the range should be seen as a selling opportunity.
 
Weekly CPR Width and Range Relationships.
 
References:

Saturday, March 11, 2023

Six Types of Market Days | Mind Over Markets

In Mind Over Markets (1st ed. 1990) James F. Dalton, Eric T. Jones and Robert B. Dalton describe six types of market days repeatedly seen across all financial markets, but no two days are ever identical: "The labels we will give these patterns are not as important as understanding how the day evolves in relation to the initial balance and the confidence with which the other time-frame has entered the market. Think of the initial balance as a base for the day's trading. The purpose of a base is to provide support for something, as the base of a lamp keeps the lamp from tipping over. The narrower the base, the easier it is to knock the lamp over. The same principle holds true for futures trading in the day time-frame. If the initial balance is narrow, the odds are greater that the base will be upset and range extension will occur. Days that establish a wider base provide more support and the initial balance is more likely to maintain the extremes for the day."


The Initial Balance is traditionally defined as the price range of the first hour of the day, which is extremely important to professionals on the floors of the exchanges. They use the initial balance high and the initial balance low as important points of reference in order to facilitate trade between buyers and sellers.
 
ooOoo
 
1. Trend Day
The Trend Day is the most aggressive type of market day. On a bullish Trend Day, the open usually marks the day’s low, while the close usually marks the day’s high, with a few ticks of tolerance in either direction. On a bearish Trend Day, the open will usually mark the day’s high, while the market will usually close near the session’s low. The market will typically start fast and the farther price moves away from value (roughly 70% of the prior day's range), the more participants will enter the market, creating sustained price movement on increased volume. Initiative buying or selling is responsible for this type of market day, as these participants are confident they can move price to a new area of established value. Price conviction is strongest during Trend Days
 
Trend Days have the widest price range (high price minus low price), meaning it is costly positioning against the market or failing to recognize the pattern early enough to enter alongside the market. Trend Days only occur a few times a month, but catching these moves certainly makes money. The Trend Day is usually preceded by a quiet day of market activity, which is usually a day with a small range of movement (Toby Crabels NR4, NR7, ID - see HERE and HERE). However, rare as they are, a Trend Day is oftentimes followed by  another Trend Day.

2. Double-Distribution Trend Day
While the Double-Distribution Trend Day is a trending day, it lacks the confidence or conviction of a Trend Day. Instead, this type of day is characterized by indecision at the start of the session. The market will usually open in a quiet manner, trading within a fairly tight range for the first hour or two, thereby creating a narrow initial balance.

If the initial balance is too narrow, price will break free from the range and auction toward new value, creating range extension, which is any movement outside the initial balance. After the initial balance of the Double-Distribution Trend Day has been defined, price will break out from the range and auction toward new value, where it will form a second distribution of price. This is the market’s attempt at confirming whether new value has indeed been established. The Double-Distribution Trend Day opens quietly, trading within a tight range. Eventually, price breaks free of the range and begins trending toward new value, igniting initiative buying or selling. Once the market finds new value, it then builds out another range before ending the day. The ranges formed at both the beginning and end of the day is where the term “double-distribution” comes from, as the bulk of the day’s volume resides at one of these extremes, essentially forming a double distribution of trading activity.

The initial balance is the base for any day’s trading but extremely important to the Double-Distribution Trend Day. A narrow initial balance is easily broken, while a wide initial balance is harder to break. The fact that the initial balance is narrow on this type of day indicates that there is a good possibility of a breakout from the initial range, indicating that you will likely see a move toward new value.

3. Typical Day
The Typical Day has a wide initial balance established at the outset of the day. Price rallies or drops sharply at the beginning, moving far enough away from value to entice responsive participants to enter the market. The responsive players push price back in the opposite direction, essentially establishing the day’s trading extremes. The market then trades quietly within the day’s extremes the remainder of the session. The opening rally or sell-off is usually sparked by reactions to economic news that hits the market early in the day. This opening push creates a wide initial balance, which means the day’s "base" is wide and will likely go unbroken.

4. Expanded Typical Day
The Expanded Typical Day is similar to the Typical Day in that it usually begins with early directional conviction. However, price movement at the open is not as strong as that seen during a Typical Day. Therefore, the initial balance, while wider than that of a Double-Distribution Trend Day, is not as wide as that of the Typical Day, which leaves it susceptible to a violation later in the session.
 
Eventually, one of the day’s extremes is violated and price movement is seen in the direction of the break, which is usually caused by initiative buying or selling behavior. The initial balance was wider than that of a Double-Distribution Trend Day, but not so wide as to challenge the width of the Typical Day. When the base of the day is neither wide nor narrow, it can be a coin flip whether a breakout will occur. The fact that the initial balance is not wide introduces the potential for failure at some point during the day at one of the extremes. In this particular case, initiative sellers overwhelmed the bottom of the day’s initial balance and extended price movement to the downside. Selling pressure essentially expanded the day’s range, thereby introducing the namesake for this type of day. The initiative selling pressure led to continued weakness the rest of the day, as price moved to establish lower. During an Expanded Typical Day, both the upper and lower boundaries of the initial balance are susceptible to violations. On any given day, one, or both of the boundaries can be violated, as buyers and sellers attempt to push price toward their own perceived levels of value.
ooOoo
 
The last two types of days seem similar, but they have distinct differences that set them apart from each other. The Trading Range Day and the Sideways Day even sound similar, but the difference lies within the participation levels of both buyers and sellers.

5. Trading Range Day
A Trading Range Day occurs when both buyers and sellers are actively auctioning price back and forth within the day’s range, which is usually established by the day’s initial balance. The initial balance is about as wide as that of a Typical Day, but instead of quietly trading within these two extremes throughout the day, buyers and sellers are actively pushing price back and forth. Buyers and sellers will stand at the extremes of the day and will enter the market in a responsive manner when price reaches the outer limits of the day’s range. Responsive sellers will enter shorts at the top of the range, which essentially pushes price back toward the day’s lows, while responsive buyers will enter longs at the bottom of the range, which pushes price back toward the day’s highs. This pattern will continue until the close. A Trading Range Day offers easy facilitation of trade and gives traders amazing opportunities to time their entries.

6Sideways Day
During a Sideways Day price is stagnant, as both buyers and sellers refrain from trading. This type of session usually occurs ahead of the release of a major economic report or news event, or in advance of a trading holiday. There is no trade facilitation and no directional conviction. This is a non-trend Day with a very compressed range, oftentimes an inside day, and the risk-reward ratio for day traders is not favorable. The initial balance is rather narrow, which at first indicates the potential for a Double-Distribution Trend Day. However, the initiative buying or selling required for a Double-Distribution Trend Day never enters the fray, which leaves the market very quiet for the rest of the session.
ooOoo
 
Jan Firich (2012)

The market will typically alternate between high and low range sessions. The fact that the market rallies after the formation of a narrow value area causes the value area for the next session to be extremely wide. A wide value area will typically lead to a Trading Range or Sideways Day behavior. When this occurs, the initial balance is usually larger, as the market establishes the extremes for the day’s trading activity, which usually results in a Typical, a Trading Range, or Sideways Day

References:

Monday, February 13, 2023

The Arithmetic of Pump & Dump Patterns | Jesse Livermore


Jesse Livermore was born in 1877 in Shrewsbury, Massachusetts, to a poverty-stricken farmer family. He learned to read and write at the age of three-and-a-half. At the age of 14 his father pulled him out of school to help with the farm. However, with his mother's blessing, Livermore ran away from home to begin to live on his own behalf and responsibility aged 14 as a quotation board boy at a Boston stock brokerage business earning $5 per week. By 1923 Livermore was one of the richest people in the world. He was, he believed, particularly suited to his first job because of his strong abilities in mental arithmetic and number memorization.
 
The 1870 census in the US found that 1 out of every 8 children below 14 years old
was a wage slave. By 1910 it was 1 out of 5.
 
Stock and commodity prices came into his broker’s office on a ticker tape, a continuous strip of paper. It was Livermore’s job to read, to memorize and to transfer all the price numbers as they come in to the quotation board outside for all the broker’s different clientele crowds in and around the trading pits and lobbies to be seen and to animate them to act in that very specific foolish way they were expected to act: buying and selling and placing buy-, sell- and stop orders at certain levels. This is exactly what generates these constantly repeating tremendous opportunities, profits and cuts for the broker and for the invisible Composite Operator over there in New York and in Chicago. He realized that for the rest of his life his destiny became aligned to this information of the ticker tape and his ability to understand the message of the algorithm. Livermore literally saw patterns in the waves of numbers that flowed each day from the tape and aligned his activity accordingly. He began to write those numbers in his own notebook and tested himself, predicting the direction that different stock prices would take at certain levels, times and days. 
 
Patterns in the Waves of Numbers:
Arithmetic of the Pump and Dump.
 
Price delivered by Composite Man for the broker through the broker to the broker's different clientele crowds. Livermore realized that scheme generates more profit than any other business activity ever known to man. For the Composite Operator. Hence he aligned himself to the tune of the invisible Composite Operator's price algorithm coming in on the ticker tape from New York and Chicago. The cumulative price range of all one minute price bars of any instrument traded by any broker on any given day nowadays exceeds what is called The Average Daily Price Range by the factor of fifty. Fifty times the so called average daily trading range during each and every single trading day. Up and down. Every day. Say the average daily price range of a given instrument is 1,000, the cumulative price will range around 50,000 during any trading day. Up and down. From balance to imbalance back and forth in this very specific manner and sequence through time and price.
 
He used breakouts to a high degree of success. He would wait for price to break above a certain pivot level and then go long to ride on the emerging trend. Daily and weekly highs and lows, session highs and lows, measured moves and Floor Trader's Daily and Weekly Pivot Point Levels provide all clues for Livermore's pivotal levels. He would exit a trade only when a similar breakout occurs in the opposite direction, signifying a potential reversal in trend after a peak formation high or low, that is a change of structure and direction of price. If the reversal signal is strong enough, he would take a short trade and ride the bear market.
 
"Many years of my life had been devoted to speculation before it dawned upon me that nothing new was happening in the stock market, that price movements were simply being repeated, that while there was variation in different stocks the general price pattern was the same." Livermore used to say: "Whatever happens in the stock market today has happened before and will happen again". 
 
In his notebook Livermore fills prices into columns headed Secondary Rally  -  Natural Rally Up Trend  - Down Trend  -  Natural Reaction, and Secondary Reaction.
 
Trend Change Rules

Livermore’s approach to swing trading required two filters: (1.) a larger swing filter and (2.) a penetration filter of one-half the size of the swing filter. Penetrations were significant at price levels he called pivot points. A pivot point is defined in retrospect as the top and bottom of each new swing. The pivot points in the below swing chart are marked with letters. Positions are taken only in the direction of the major trend. A major uptrend is defined by confirming higher highs and higher lows, and a major downtrend by lower lows and lower highs, and where the penetration filter (swing filter) is not broken in the reverse direction. That is, an uptrend is still intact as long as prices do not decline below the previous pivot point by as much as the amount of the penetration filter. Once the trend is identified, positions are added each time a new penetration occurs, confirming the trend's direction. A stop-loss is placed at the point of penetration beyond the prior pivot point. Unfortunately Livermore never revealed how the penetration point was calculated. It seems however to be a percentage of the current swing size (e.g. 16%, 20%, 25%, 33%,50%)
 
Failed Reversal in the Livermore Method

In Livermore's system the first penetration of the stop-loss (a swing high or low depending on the direction of the trade) calls for liquidation of the current position. A second penetration is the necessary confirmation for the new trend. If the second penetration fails (at point K) it is considered a secondary reaction within the old trend. The downtrend may be re-entered at a distance of the swing filter below K, guaranteeing that point K is defined, and again on the next swing, following pivot point M when prices reach the penetration level below pivot point L. It is easier to re-enter an old trend than to establish a position in a new one.
 
This is Jesse Livormore's insight and conclusion:
  1. Markets are never wrong opinions often are. Back your judgment and don't trust your opinion, until the action of the market itself confirms your opinion.
  2. Few people ever make money on tips, beware of inside information. If there was easy money lying around, no one would be forcing it into your pocket.
  3. Money is made by sitting, not trading. It takes time to make money. Don't give me timing; give me time.
  4. Buy right, sit tight. Big movements take time to develop. Men who can both be right and sit tight are uncommon.
  5. Money cannot consistently be made by trading every day or every week during the year.
  6. Nothing new ever occurs in the business of speculating or investing in securities and commodities.
  7. Never average losses.
  8. The human side of every person is the greatest enemy of the average investor or speculator. Wishful thinking must be banished.
 

References:
Richard D. Wyckoff (1920) - Jesse Livermore's Methods of Trading in Stocks.
Edwin Lefèvre (1923) - Reminiscences of a Stock Operator.
Jesse Livermore (1940) - How To Trade In Stocks.
Jesse Thompson (1983) - The Livermore System. In: Technical Analysis of Stocks & Commodities. 
Mark B. Fisher (2002) - The Logical Trader.
 Richard Smitten (2005) - Trade Like Jesse Livermore.