6 Mar 2006 mchirico   » (Journeyer)

How to Trade in Stocks

It's been said that Jesse Lauriston Livermore was the greatest stock market operator in history - the only operator who ever made and lost four stock market fortunes. He did it all on a ``small bankroll, a stock ticker and a telephone.''[1]

Jesse Livermore stock picking techniques are still applicable today. In fact, if you do a careful read, you'll see that some well-know authors have actually stolen his techniques. Livermore's techniques worked well for him, when he followed them. Unfortunately, he got emotionally wrapped up in the marketed and departed from his rules. He died by suicide in 1940.

    ``It is the human frailty with we all possess in some degree that becomes the investor's and speculator's greatest enemy and will eventually, if not safeguarded, bring about his downfall.''[1]

Livermore had a number of rules: Never by on a tip alone; Stocks reaching new highs tend to go higher; Never trade in stocks under $15. Have an exit strategy before you buy, etc.

Stock Prices

There's a program stock.tar.gz that grabs current stock price data from yahoo finance. Below is an example usage getting the stock price for Redhat. By the way take a look at this price. It's starting to hit new highs, and it volume follows through on the new high it could be a good buy. Oh, first rule: Never buy on a tip alone.

            $ stock rhat

This program[1] can do multiple stocks and or indexes as well. See the man page on the program for more help. The source is very simple using socket, bind, connect. It can easily be adjusted for scraping other pages, sending mail (you'll have to change the port), or other desired tasks.

Email Alerts

I use Gmail; but, but it's a custom setup with the local MTA (Postfix) and Fetchmail. The advantage here is being able to run any standard shell scripts for sending out mail, on your home system, where you might not have a dedicated IP address.


    [1] How to Trade in Stocks: the Livermore Formula for Combining Time Element and Price. By Jesse L. Livermore. Copyright 1940. ISBN: 0-934380-20-1
    [4] stock.tar.gz Direct download. This is a simple GPL socket, bind, connect, C program.

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