(1) Jesse Livermore was born July 26, 1877. Some other events that took place in this year were: Queen Victoria became Empress of India, Crazy Horse fought his last battle with the US Cavalry, Mars’ outer moon Phobos was discovered and Thomas Edison invented the phonograph.

(2) From his earliest days, Livermore spent the money he took from the markets freely - enjoying the sort of lifestyle more usually associated with Hollywood’s biggest stars.

(3) He was a cigar smoker.

(4) His favorite hobby was fishing and he also enjoyed hunting and playing golf.

(5) He took long vacations – often in Florida for a month or more in winter - or sailing to European resorts in his ocean-going yacht.

(6) He believed his breaks from routine - when sailing or fishing - allowed him to have some of his best ideas.

(7) He was a three-times married womanizer.

(8) Throughout his life, he suffered from clinical depression.

(9) Jesse Livermore died, aged 63, on November 28, 1940. Some other events that took place in this year were: Germany invaded France, Winston Churchill become Prime Minister of the UK and Franklin D. Roosevelt was re-elected US president.

Jesse Livermore, one of the greatest stock traders in history, made his biggest market killings when he shorted stocks. In particular, he made $100 million (worth more than $1 billion in today’s money) when he shorted the market in 1929.

Non-expert traders should be reluctant to short stocks though, without very great cause. Here are some reasons why short trades are riskier than long trades:

Why you should think Twice Before Shorting

1. When a long goes against you, your position size falls. When a short goes against you, your position size rises, increasing your risk.
2. A rising stock market serves the interests of society’s most influential people - business owners and governments. They will lobby and legislate for conditions in which businesses and wealth creation can prosper. Notice how central banks cut interest rates when economic conditions take a downward turn.
3. Business owners and managers work hard to make their businesses succeed. Their desire to increase their profits usually results in rising stock prices.
4. The long-term charts of the Dow, S&P500 and the NASDAQ reflect points 2. and 3. The long-term direction is upward. When you short, you go against the natural, long-term market trend.
5. Long positions can result in 100% loss of your stake. Short positions can lose you an unlimited amount.

Every serious trader should have shorting as a stock trading tactic – but it’s a tactic that requires greater caution than going long.