Jesse Livermore, the legendary stock market trader of the earlier 20th century, is a highly valued resource for both novice and experienced traders. Many traders study his tactics, methods, and tactics extensively for insight into how the markets can be successfully managed over time. One of his most valuable insights is the concept of holding “dead money” positions.
Dead money positions are the stocks or assets that are not volatile and show no movement whatsoever in the market. This means that they lack potential profits, and are okay for traders to hold in the form of long-term investments. Holding them can be a passive way of making a profit as eventually, some of them will become profitable even if there is no volatility at the time.
Therefore, each asset of this type should be treated as a “long-term” asset that should be held with minimal active trading. As Livermore puts it, “you can’t go broke taking profits” meaning that the profits will become virtually limitless when the assets do start to become profitable.
Moreover, another useful tip that Livermore proposed is that investors should not be too worried about their positions in the market if they don’t show any particular movements. Instead, they should focus on what may happen in the future and plan accordingly. That way, traders can take advantage of opportunities when stocks become more volatile and take the profits when the market shifts.
In conclusion, Jesse Livermore has contributed a significant amount of knowledge to the trading world. His insights into holding dead money positions help investors find ways to make profits without taking too much risk. They are perfect for novice traders looking to make consistent profits in the market without actively managing their portfolios. Therefore, the advice that Jesse Livermore provides is still useful to this day and should be taken into consideration by all traders.
