Chapter X Summary and Analysis

Livingston trades in stocks and also the commodities market. He considers commodities down to earth and less prone to complex maneuvering than stocks. Commodities are affected by basic conditions such as supply and demand, crop health, transportation issues, and other understandable factors. Livingston discusses how to determine the direction of prices and then trade in accordance with this direction. Since the direction of least resistance is based on underlying factors, if a surprise event happens, it is more likely to contribute to the direction the market is already going and help one's trade.

A trader errs if he tries to trade when the direction of the market is not firmly established. He may push the market around through large trades, but it will always return to where it was. If it is ranging in a narrow band, any trade...