Jesse Livermore’s 12 Risk Management Rules

1. Never average a losing position
Averaging down is how small losses become fatal ones.

2. Always use a stop loss
A trade without a stop is a bet without limits.

3. Cut losses quickly
Losses must be taken immediately, without debate.

4. Let winners run
Big money comes from a few big winners, not many small ones.

5. Trade only when the market confirms your idea
Your opinion means nothing until price agrees.

6. Never trade on hope
Hope is not a strategy — it is a confession of being wrong.

7. Risk only a small portion of capital on any trade
Survival comes before profit.

8. Trade with the primary trend
Fighting the trend is the fastest way to ruin.

9. Sit tight when you are right
Impatience kills profits more than bad entries.

10. Stay out of the market when conditions are unclear
No position is a position.

11. Increase size only when winning
Pyramiding works only in your favor — never against you.

12. Protect capital above all else
You can’t recover if you’re wiped out.

Every rule was paid for in losses, pain, and blown accounts.