// STUDY RESULT · 1998-01 TO 2026-09

Inspired by Livermore: Pivotal Points

NO EDGE

Wait for the pivotal point - the price where the line of least resistance breaks - and pyramid only into profit.

How this run differs from the source: A 20-day high stands in for Livermore's judgment-based pivotal points; no pyramiding or loss limit.

	THE STRATEGY	$SPXTR BUY & HOLD
CAGR	4.8%	9.3%
Sharpe ratio	0.32	0.66
Max drawdown	-71.6%	-50.9%

// GROWTH OF $1, LOG SCALE

AMBER: THE STRATEGY · GREY: $SPXTR BUY & HOLD

Out-of-sample (from the split): CAGR 9.2% against 14.0% for the benchmark; Sharpe 0.20 in-sample, 0.49 out-of-sample.

After 25 bps of trading costs: -0.9% a year. WITHIN RANDOM

// DECADE BY DECADE

ERA	STRATEGY	BENCHMARK
1990s	38.4%	20.9%
2000s	-8.0%	-0.8%
2010s	4.1%	14.0%
2020s	18.2%	15.2%

// YEAR BY YEAR, LOSING YEARS IN RED

1998*10.9%27.2%

199970.4%21.0%

2000-36.9%-9.1%

2001-17.8%-11.9%

2002-21.0%-22.1%

200360.6%28.7%

20041.4%10.9%

2005-8.9%4.9%

20062.7%15.8%

200721.6%5.5%

2008-45.1%-37.0%

200910.9%26.5%

201016.2%15.1%

2011-4.1%2.1%

20122.0%16.0%

201339.8%32.4%

2014-6.3%13.7%

2015-9.2%1.4%

2016-15.4%12.0%

201739.9%21.8%

2018-32.6%-4.4%

201931.8%31.5%

202042.4%18.4%

202121.9%28.7%

2022-27.1%-18.1%

202315.4%26.3%

202462.8%25.0%

202534.7%17.9%

2026*-2.9%11.8%

Losing years: 2000 (-36.9%), 2001 (-17.8%), 2002 (-21.0%), 2005 (-8.9%), 2008 (-45.1%), 2011 (-4.1%), 2014 (-6.3%), 2015 (-9.2%), 2016 (-15.4%), 2018 (-32.6%), 2022 (-27.1%), 2026 (-2.9%). Each cell: the strategy, then the benchmark below it. * a part year.

// THE IDEA, AS PUBLISHED

Jesse Livermore, 'How to Trade in Stocks' (1940); see Edwin Lefevre, 'Reminiscences of a Stock Operator' (1923), a fictionalized account · 1940

Act only when price breaks through a pivotal point, never in anticipation
Confirm with a second stock in the same group
Add only to profitable positions; never average losers
Exit fast when a trade does not act right; long or short

RUN IT YOURSELF ▸ IN THE LIBRARY

A real computation on the QuantGPT warehouse, walk-forward. A study across the whole market includes only part of the companies that later delisted from 1998 (survivors only before); a study on your own list of tickers is not affected. Gross returns, no costs except where stated. Past performance is not a promise. Findings, not advice. COMPUTED 2026-11-08 10:15 ON THE QUANTGPT WAREHOUSE. COMPANIES THAT LATER DELISTED ARE ONLY PARTLY IN THIS UNIVERSE (A FIX IS IN PROGRESS), SO THE RESULT LEANS TOWARD SURVIVORS. FUNDAMENTALS BY FILING DATE. NOT INVESTMENT ADVICE. PRIVACY