Trading Tactics � Limit Or Market Order?There was no complicated trading tactics when Jesse Livermore wanted to put an order out. He always traded at the market. He had proven it was the best way for his trading methodology to work, for his trading entries, stops and exits. Besides, an entry defined by pivot points are the inception of a movement, usually with a strong carry-through force, the stock would simply get away from your entry prices if the movement is real. You may miss a great opportunity just because you want to save a point or two.You see, I never could trade with a limit. I must take my chances with the market, not the particular price.When I think I should sell, I sell. When I think stocks will go up, I buy. My adherence to that general principle of speculation saved me.Whenever I did try to limit the prices in order to minimize the disadvantages of trading at the market when the ticker lagged, I simply found that the market got away from me.I never trade at limits. When you want to get out, get out. Trading Tactics � Probing Method by Jesse LivermoreHowever, there is an important trading tactic he used to establish his position � a probing method. Basically you don�t build up all of your position at once. You first decide a amount of money to risk, so you will know how many shares you want to buy or sell. For example, if you want to buy 10,000 shares in total and the stock reaches your pivot point at $110, acquire them as explained below:Buy 2000 shares at $110.If the price advanced to $111, buy another 2000 shares.If the price advanced to $112, buy another 2000 shares.The price might get to $114. Observe how the reaction goes.If the price resumes and advanced to 113.75, buy the last lot, 4000 shares. The 4000 shares should get filled in smaller lots with higher prices.During these steps, if the price hesitates or retreats, something is wrong and the time is not right, hence you should close out the trade (see Trading Stops). The example above is explained in details in Reminiscences of a Stock Operator in page. 84, paperback version.Please note that a thousand shares in Livermore�s time probably represent more than 100,000 shares in today�s market. There were only 8-9 million shares exchanged at New York Stock Exchange in a heavy day during 1920's. And in today, it�s common to see over 1 billion shares in NYSE total volume. With the big line he was operating, his own buying/selling had the effect to move the price and therefore, if he couldn�t see his buying/selling moved the stock in his favor, he would consider the timing was not right, so he would either put a reverse order for testing purpose or close out the trade immediately.Even if you are operating a small line, the same trading tactic holds true. The benefits are severalfold:It�s actually the same trading tactic as �Press the winner� or �Pyramiding� most professional traders adhere to (For example, the rule #2 of Phantom of the Pits).You only add more positions when the price confirms. Price is the best confirmation to prove if you are right or not.After you acquire all the shares you want, you are already in the money (That�s why Jesse Livermore could naturally start big & how he could sit tight to let the profit ride by using the house money).Minimize the loss if your timing to enter the market is wrong, especially important for large leverageBy using this method, traders stand at better odds. Whenever a trader is wrong, he loses small. And whenever a trader is right, he wins big. Everything was well thought and proved in real trading by Jesse Livermore. If there were a better but different method, he would have found that out.When I am bearish and I sell a stock, each sale must be at a lower level than the previous one. When I am buying, the reverse is true.I must buy on a rising scale. I don�t buy long stock on a scale down. I buy on a s

cale up.When I buy stocks for a rise I like to pay top prices and when I sell I must sell low or not at all.He should accumulate his line on the way up. Let him buy one-fifth of his full line. If that doesn�t show him a profit he must not increase his holdings because he has obviously begun wrong; he is wrong temporarily and there is no profit in being wrong at any time.The moment the tape told me that I was on the right track my business duty was to increase my line.It is foolhardy to make a second trade, if your first trade shows you a loss.It should be said that too many speculators buy or sell impulsively, acquiring their entire line at almost one price. That is wrong and dangerous.Each succeeding purchase must be at a higher price than the previous one. That same rule should be applied in selling short. Never make an additional sale unless it is at lower price than the previous sale.It is a wise thing to have the big bet down only when you win, and when you lose to lose only a small exploratory bet.