Trading Lesson of the Week

• November 9, 2025
• T.BTE | RIG | XPEV

In This Week’s Issue:

• Market Outlook – Market Focused on US Government Shutdown
• This Week’s Market Minutes video – Will the Stock Market Crash in November?
• Trader Training – Jesse Livermore’s Trading Principles Through the Lens of a Modern Trader
• Strategy – 3 Stocks for Longer Term Traders

Market Outlook – Market Focused on US Government Shutdown

The market was adrift for a few weeks with downward momentum gathering momentum on Friday. As the indexes started to test their upward trend lines, the market reversed Friday afternoon to close strong. It was more than a technical bounce from oversold conditions, investors were speculating that there may be a break in the US Government shutdown. Over the weekend, that is what happened and stocks opened strong this morning, breaking the short term downward trend and holding the long term upward trend line. Expect volatility in the market in the short term. If there is a resolution to the shut down, the market should jump higher. If the current progress does not result in a deal to resolve the impasse, expect more selling pressure.

In this environment, focus on Alpha stocks that are trading abnormally as they will disconnect from the gyrations of the overall market. The market uncertainty will mean that there are fewer of them so be fussy and patient. Trade less until conditions normalize.

This Week’s Market Minutes Video – Is NVDA a Stock Bubble About to Burst?

The market saw weakness this past week as a large short seller targeted NVDA and PLTR. Will this be a catalyst for a stock market crash in November? This week, I show what to look for, provide my analysis of the overall markets and look at the trade of the week on IFRX.

CLICK HERE TO WATCH THIS WEEK'S VIDEO

https://youtu.be/zkkIyW70j64

Commentary – Jesse Livermore’s Trading Principles Through the Lens of a Modern Trader

When you study the great traders of history, few names stand taller than Jesse Livermore. Though he traded in an era without computers, online brokers, or even real-time quotes, his principles still cut to the core of what makes a trader successful today. The tools have changed, the psychology hasn’t. Livermore understood that trading is less about predicting the market and more about understanding yourself within it.

At Stockscores, I’ve taught thousands of traders that the market is a psychological battlefield. Price charts are simply visual records of human emotion including fear, greed, hope, and regret. Livermore grasped this truth a century ago. His success wasn’t based on complicated formulas or insider information. It came from discipline, patience, and the willingness to wait for the right opportunity, not just any opportunity.

1. Patience and Preparation

Livermore famously said that “the big money is made in the sitting, not the thinking.” In modern trading terms, this means knowing when not to trade. Most retail traders lose because they feel they always have to be doing something. Scanning, clicking, reacting. Livermore knew that waiting means preparing: studying the charts, understanding the market’s rhythm, and being ready to strike when the setup is undeniable.

When I teach traders about building a process, I stress this same concept. You can’t control the market, but you can control your readiness. When your rules tell you the odds are in your favor, when volume confirms, trend aligns, and emotion creates opportunity, that’s when you act decisively. Until then, you do nothing. Patience is not inactivity; it’s preparation.

2. Trade with the Trend

Livermore’s greatest profits came from aligning himself with major market trends. He didn’t fight the tape; he flowed with it. “Markets are never wrong, opinions often are,” he once said.

I call this understanding the mood of the crowd. Price trends develop because human behavior repeats. When investors collectively believe in a story, they push prices higher until reality catches up. Livermore’s genius was recognizing when that collective psychology was shifting. He watched price action, not headlines, to see when smart money was entering or leaving.

Every trader should learn to read the market’s language. Support and resistance, volume surges, and price breakouts are the words and sentences of that language. When they align with strong emotion, you have the footprints of institutional activity, and that’s where the high-probability trades lie.

3. Cut Losses Quickly

No discussion of Livermore is complete without mentioning his rule on cutting losses. He treated losses as part of the business; small, manageable expenses on the road to profit. “It was never my thinking that made the big money for me. It was always my sitting,” he said, but sitting never meant sitting on a losing position.

Modern traders often fail because they want to be right more than they want to be profitable. Livermore understood that the market doesn’t care about your opinion. If price action invalidates your setup, you exit, no hesitation, no emotion. Every professional trader I know lives by this principle. The market rewards discipline and punishes ego.

4. Emotional Control

Livermore’s career had incredible highs and devastating lows, not because his principles failed, but because at times he failed to follow them. That’s perhaps his most important lesson. Trading success is not about brilliance; it’s about control. Control of risk, control of process, and above all, control of emotion.

In my own trading and teaching, I emphasize process over prediction. You can have the best strategy in the world, but if you let emotion dictate your decisions, the strategy is useless. Livermore called the market “the greatest game in the world,” but like any game, you win by playing with discipline and consistency, not impulse.

5. The Eternal Relevance of His Wisdom

Despite the century between us, Jesse Livermore’s trading philosophy aligns perfectly with the principles I teach today. He was a price action trader before the term existed. He studied crowd psychology before behavioral finance was a field. Most importantly, he understood that successful trading is 90% mental.

Technology has given us faster execution, better data, and algorithmic precision — but it hasn’t made us more disciplined. In fact, it’s made patience rarer. Livermore’s wisdom reminds us that the trader’s real edge doesn’t come from tools; it comes from temperament.

Jesse Livermore mastered the hardest skill in trading: self-control. His principles; patience, trend alignment, loss management, and emotional discipline, form the foundation of any sustainable trading strategy.

We translate those same timeless lessons into modern market practice. The market will always tempt you to act when you shouldn’t, to hold when you should sell, and to believe when you should doubt. But if you can learn to wait, to prepare, and to act decisively when the odds are right, just as Livermore did, you’ll discover that successful trading isn’t about prediction at all.

It’s about discipline, psychology, and trust in a well-built process. The tools evolve, but the truth remains the same.