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“The big money must necessarily be in the big swing.” – Jesse Livermore
It sounds an obvious fact – big money is when there is a very fierce bull run.
But this obvious fact for many is realized on hindsight, when the bull is charging at an advanced stage, or when the bull run is over.
In the former case – bull is charging ahead and the whole world seems to be excited, everyone seems to make money, there are only good news with more promising economic outlook, and this is in fact the most dangerous time to invest. However, human greed is most manifested at this time, many jump in the bandwagon that charges ahead at the top of the highest cliff, and dives into the death valley!
When the bull run is over, those who did not crush with the bandwagon over the cliff, sighed and regretted for missing the bull run when the bull was about to wake up.
“The big money must necessarily be in the big swing.”
We take a look at the above statement by Jesse Livermore again. He said “BIG SWING”.
“Big swing” connotes a dynamic movement, up and down, or down and up. If there is big swing, there is small swing also.
If you want to make real big money, you MUST catch around the beginning of the big swing and exit at around the end of the big swing. You must get ready with ALL the capital you have.
What are the problems with most investors?
- They make no distinction between big swing or small swing.
- When they invest, they assume it is big swing (because they want to make money) based on whatever may be the logical thinking, rumors, experts’ advice.
- They could not see a pattern of behavior of the market, just like amateur or inexperienced fisherman who could not recognize the changing patterns of the weather that can affect fish catch.
- When, most of the time they experience only the small swings, they are exhausted, get burned in the pocket, they are so wounded physically and psychologically that when the big swing is in-front of them, they could not recognize it anymore.
- Even for a few who recognize the start of the bull run, they have been habitually investing a small sum here and there at different small swings, they continue with such poor strategy by investing a small sum at the big swing. We often hear regretful testimonials from such people, “if only I invest more money, I am very rich now.”
Big swing does not come every day. What every day we experience are small swings. Big swing has its TIMING. We need to study the timing.
How do we Operationalize this Learning Principle : “The big money must necessarily be in the big swing.”?
In our QuaSyLaTic Investment Training, we use TA tools to get ourselves ac-customized to the patterns and trends behavior of the market. It is a one year long coaching from me to get students keep practicing the technical analysis. Look, study, drawn geometry on charts, more charts.
Over time they will get to recognize small swings, big swings from historical data. They will get to differentiate between noises and signals. They plot their own patterns and trends of the market they select and project into the future, and humbly when the market unfolds, they learn from their mistakes, they learn from their previous inadequate assumptions of the market behaviors.
Through this disciplined process, they gain confidence of their own visualizations of the market movement in patterns and trends.
They are better prepared at the next round at the start of the big swing with all the capital they can mobilize.
“The big money must necessarily be in the big swing.”
There is no substitute for constant homework and discipline practice if you believe
“The big money must necessarily be in the big swing.”
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