I Wait.

… after forming a definite opinion with respect to a certain stock or stocks – do not be too anxious to get into it. Wait and watch the action of that stock or stocks marketwise. Have a fundamental basis to be guided by. Say, for instance, a stock is selling around $25.00 and has been holding within a range of $22.00 to $28.00 for a considerable period. Assuming that you believe that the stock should eventually sell at $50.00, and it is $25.00 at the time, and in your opinion it will sell at $50.00, have patience and wait until the stock becomes active, until it makes a new high, say around $30.00, You will then know that marketwise you have been justified. The stock must have gone into a very strong position, or it would not have reached $30.00. Having done so, it is altogether likely that it is on its way to a very definite advance – the move is on. That is the time for you to back your opinion. Don’t let the fact that you did not buy at $25.00 cause you any aggravation. The chances are if you have, you would have become tired of waiting and would have been out of it when the move started, because having once gotten out at a lower price, you would have become disgruntled and would not have gone back in when you should have. (1)

(1) Jesse L. Livermore, How to Trade in Stocks, Duell, Sloan & Pearce, 1940, p.9.