"On another occasion, I recall waiting three weeks before starting to buy Bethlehem Steel. On April 7, 1915, it had reached its highest price on record $87*. Having observed that stocks passing a Pivotal Point gained rapidly, and being confident that Bethlehem Steel would go through 100, on April 8+ I placed my first my first order to buy and accumulated my line from $89 up to $99. The same stock sold up to a high of $117. It never halted in its upward flight except for minor reactions until April 13, or five days later, when it sold at a high of $155, a breath-taking rise. This again illustrates the rewards that go to the person who has the patience to wait for and take advantage of the Pivotal Points.
But I was not through with Bethlehem. I repeated the operation at $200 point, at the $300 point, and again at the dizzy peak of $400. Nor had I finished even then, for I had anticipated what would happen in a bear market, when the stock broke the pivotal points on the way down. I learned the main thing was to watch the follow-through as it crossed through the Pivotal Point. I found it was an easy matter for the me to turn around and get out of a position, when vitality was lacking after a stock crossed the Pivotal Point and there were many occasions when I reversed my position and went over to the short-side." p52 How To Trade In Stocks, Jesse Livermore
* New High breakout.
+ This looks like a Time stop.
So my interpretation would be to take the nearest round number when that new high was made. That would be $80 (or even $85, intervals of $5 round numbers, if the stock was not volatile) and have a stop not far from there just beneath. Accumulate stock where you can, but not too far from the new high. I would think it is about no more than 5% of the high price ideally. From other book readings, traders recommend to have a target price at least two times your risk (i.e. your average price that you have bought at, minus the stop price = the amount you are risking). As soon as your target is reached you can comfortably raise your stop to the next "pivotal point". Perhaps that would be $110 when Jesse Livermore's states that it reached $117, and so on,
Follow the Jesse Livermore Experiment HERE
