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Market Wizards - Interviews with Top Traders

Marty Schwartz: Champion Trader

Before being a successful trader, Marty Schwartz spent almost a decade losing money. Today he puts in about 12 hours into work everyday, calculating many mathematical ratios and oscillators and posts his own charts. He does so to be better prepared than someone he is competing against.

 

He shares the rigorous training at the U.S. Marine corps gave him the confidence to believe that he could perform beyond his previous expectations. The two experiences of Amherst College and Marines, convinced him that he could do almost anything if he worked hard enough.

 

When in spite of good news the market goes down, it means the market is very weak; when it goes up in spite of bad news, it means the market is healthy.

 

He turned into a winner from a loser because he was successful in separating his ego from money making. 

 

He believes in playing defensive and protecting what you have during rough times. If someone is adding to a losing position, then it's one of the most suicidal things one can do in trading.

 

He says that after making good profits, he tries to play small because he has experienced the biggest setbacks only after his biggest victories.

 

Marty thinks there is no better tool than Moving Average (MA) and he seldom goes against it. If a stock is trading above its recent low even when the market is penetrating to further lows, then the stock is healthy.

 

He believes in diversification and that is why he has several bank accounts and few safe deposit boxes with gold and cash.

 

He says that the most important thing is controlling losses. One should not increase position size until he has doubled or tripled his capital. As soon as people start making money, they start increasing their bets and quickly get wiped out.

 

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