A Simple, 7-Step Checklist for Your Trading Success

Dec 4, 2019

Vijay Bhambwani, Editor, Fast Profits Daily


Vijay here with another video about winning the battle in the markets.

I always like to say that we traders are mind-warriors. We fight and win in the markets with our minds.

Our brain is our primary weapon against the market. So, what can we do to sharpen our minds?

Well, let's learn from one of the greatest traders of all-time!

In today's video...

  • Jesse Livermore's checklist for trading success

Yes, that's all the video's about!

By the way... I have implemented this checklist myself and I know it absolutely works.

And today, I'm sharing it with you.


This is Vijay Bhambwani and I'm gonna talk to you today about something that Jesse Livermore, one of the finest traders in the world, who has created a record of earning more than US$ 250 m in a single session, in short-selling the market in 1929, used to follow.

Jesse was a trader as sharp as they come. He was not very literate. As a matter of fact, he had studied up to grade four of grammar school. He was a son of a farmer but he was extremely sharp when it came to mathematics and he had a checklist.

A checklist system, just like a pilot and co-pilot go through before a flight takes off. They check the time pressure. They checked the fuel. They check the batteries, oxygen levels the flaps, et cetera, et cetera.

Jesse Livermore had a checklist system which he used to follow to the point of paranoia. I'm gonna share with you his checklist so that you can achieve a better probability of success.

This is not a mathematical secret formula. This is as earthy and as grounded information as it comes. So here goes.

Jessie's rule number one. Always trade if and only if you've had a good night's sleep. We traders are actually brain warriors. It's not about the fastest Internet connection. It's not about the best computer. It's not about the best software or the fastest refresh rate of your broker's treating terminal. We fight with our ideas and our brains. If you have not had good sleep in the night, and if your brain is tired, it won't function as well. So Jesse said, if I've not hand good night's sleep, I will not trade.

Secondly, I think traders are kings or queens. A king or a queen deserves a king's breakfast or a queen's breakfast. So if you've not eaten enough carbs, proteins, and nutritious food for breakfast, do not trade. Your body needs energy. Believe me, trading is hard work. You may be sitting in a chair and jabbing away on a few computer keyboard buttons or clicking away on a mouse wheel but it's extremely, extremely strenuous. Even the brain actually burns one and half calories a second when it is under stress, and traders are always under stress. If your body is wanting nutrition, it will not function.

Number three, if you're emotionally upset, Jesse said, do not trade. We, like I said, are brain warriors. We traders fight with our minds and ideas. If your mind is upset, it is going to make wrong decisions. Do not trade. If you had a fight with your spouse, if you have still not overcome the grief of the death of a near and dear relative, do not trade.

Rule number four. Be well informed. Jesse used to read a couple of newspapers. He had a hotline to at least half a dozen brokers with whom he would chat before the trading session and asked them their views of the market. He would trade on his own ideas about the markets but he was very careful about knowing what was happening out there. So unless you have done your homework and today Google does that for you, unless you've done your homework, do not trade.

If your mind is not prepared with background research about what the overnight US markets are doing, what the USDINR is, where oil prices are, where bond yields are, if there's any good or bad news in the pipeline which has come after the markets closed yesterday but before they opened today for the trading session, you are likely to be taken by surprise. So, as the old saying goes, chance favours the prepared mind. Be prepared for the trading session. Be aware about the world around you and the breaking news around you before you trade.

Rule number five. Always make sure that you sip a little bit of water every 90 minutes or so. Water thins our blood and it also facilitates carrying oxygen in the blood to the brain. The brain needs ample supply of oxygen, which is why you must keep hydrating yourself with water and keep breathing very, very deeply once in every few minutes, so that you're well hydrated. Your brain is well cushioned with an ample supply of oxygen. I remind you again we have brain warriors and we win or lose with our ideas.

Number six. Keep eating nutritious food every three hours. Every three hours might come as a surprise to my friends who are equity traders but it's not so much for a surprise for commodities and currencies traders because the equity market opens at 9 a.m. and shuts at 3:30 p.m. The currency market shuts at five. Hey, commodity traders start trading at 9 a.m. and wind up at 12 midnight. That's a good 15 hours of trade. If you do not nourish your body in between, you're gonna be feeling weak and tired and your decisions will also mirror that fatigue in the trade. So keep eating every three hours so as to keep nourishing your body.

Always stretch your legs. Take a break every 2 to 3 hours on walkabout a little bit. Look at distant objects because your eyes are so focused to the screen, which is maybe 12 to maybe 24 inches away from your eyes, that it could get fixated. This causes frequent headaches and heaviness in the head. Always exercise your eye muscles by looking at distant things once every 20 minutes so as to relax the eye muscles. You don't want fatigue to set in.

The next item on my checklist. Whenever there is a mark to market loss on your screen, do not panic. Always take deep breaths, slow down, take a step back from your computer, and look at it with a dispassionate eye. This way, you will be in a clear position to know whether you should be exiting from that position, booking a loss, or should actually need to hold on to that position.

These are some of the very few simple checklists that Jesse Livermore followed and he attributes these steps to his sterling performance in calling the collapse in the US stock markets in the great recession, when he made approximately US$ 289 m shorting the market in one single trading session. Follow these steps and trading success is probably yours.

This is Vijay Bhambwani signing off for now. Till we meet again, I wish you a very profitable day.

But before I sign off, do not forget, if you're watching this video on YouTube, to click on the like button. In the comments section, let me know what you think of this video and which other aspect of the market, investments, or trading, you want me to cover for you in my next video.

Also, please share this video with your friends and family. Goodbye for now till we meet again.

Thank you.

Warm regards,

Vijay L Bhambwani
Vijay L Bhambwani
Editor, Fast Profits Daily
Equitymaster Agora Research Private Limited (Research Analyst)

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2 Responses to "A Simple, 7-Step Checklist for Your Trading Success"


Dec 7, 2019

He was such a phenomenol success in reading daily movement of stocks that he could correctly guess hhe day's high and low and make profit. His detractors finally managed to get him banned from stck markets. Then he shifted to commodities and bought 90% of cotton in one instance only to sell it later for huge profit ! His winning streak continued there too !


Arla Sivaprasad

Dec 4, 2019

Very informative,interesting and useful.

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