Marty Schwartz – History & Trading Rules of a Legendary Trader

Marty Schwartz trader is among the best of the best traders who achieved remarkable success in the arena of professional trading. He is a Wall Street trader who accumulated millions of dollars from trading stocks and futures. In fact, Schwartz is an iconic figure in the history of Wall Street. It wouldn’t be wrong to say that perhaps Wall Street will never ever witness such a trader again. His killer instincts, his enthusiasm for trading, and his strength of nerves earned him a well-deserved title “Pit Bull”. 

How did Marty Schwartz become Marty Schwartz’s trader?
What earned him the title Pit Bull?
How did he make his astonishing fortune?
And what are the trading rules of the legendary trader?
These are things we are going to cover in today’s post. So, stay tuned and see what you can learn from the guru of the game.

Marty Schwartz Trader – History

Marty Schwartz trader was born in 1945 in the USA. He graduated from Amherst College in 1967 and completed MBA from Columbia University in 1970. Before entering into the arena of professional trading, Schwartz served in the US Marine Corps Reserve for almost 5 years between 1968 and 1973. He retired from the military as a captain. Later on, he joined a firm named E.F. Hutton in the finance industry. He worked as a financial analyst in the firm for years. However, his natural instincts and passion for trading urged him to leave Hutton. Finally, he parted ways with the firm and reserved a place in the American Stock Exchange. He had amassed $100,000 by then. Thus, he started a new chapter. What the world witnessed later has become a crucial part of history. 

How did Schwartz become a Marty Schwartz trader is interesting as well as inspiring for aspiring traders. He used his hard-earned money and started trading stocks, options, and futures. Schwartz was so confident about the trading abilities that he participated in a competition in 1984. The competition was the United States Trading Championship. It was organized by Stanford University and the winner was Marty Schwartz. In fact, he wasn’t the winner only but a trader who astonishingly outperformed other participants quite comprehensively. He made more profit than the entire profit of other participants. Thus, his name became a rising star sparkling over the horizon. 

A year later, Schwartz also established his own fund in 1985. He had equipped himself with all the required knowledge skills and experience by then. Schwartz then started managing not only his own funds but others. He became a relentless force in the arena and earned a profit of more than $600,000 in his first year as an independent trader. Moreover, he also made more than $1 million in the second year and never looked back ever again. 

Marty Schwartz is as successful a trader as any aspiring trader could wish for. He says he used to make $70,000 while day trading. Schwartz was so engrossed in trading that his health began to deteriorate. He left full-time trading as per the advice of his doctor and shifted to Florida. After slowing things down, he now only trades from the comfort of his home. 

Pit Bull: Lessons from Wall Street’s Champion Trader – a book by Marty Schwartz trader

Pit Bull: Lessons from Wall Street’s Champion Trader is a remarkable tale of Marty Schwartz. The book takes you on a long journey to Marty Schwartz trader’s world. It is, in fact, a true story of how Schwartz became a successful trader. This is so true that Schwartz portrays himself in unfavorable ways. He sheds light on how he was consumed by his desires to generate more money and be more powerful. Then he also highlights the perils of being addicted to money and power. This cautionary tale has it all to help yourself grow as a trader.

Trading Rules of the Marty Schwartz trader

Marty Schwartz is the trader who deservedly amassed his fortune and earned the title of Pit Bull. Because he isn’t an ordinary trader. He is the one who revolutionized trading. If you want to become a successful trader, Marty Schwartz trader’s rules may put you on the right path. 

1. Don’t listen to yourself, instead, listen to the market

“Most people think that they are playing against the market, but the market doesn’t care. You are really playing against yourself. You have to stop trying to make things happen in order to prove that you’re right. Listen Only to what the market is telling you now. Forget what you thought it was telling you five minutes ago. The sole objective of trading is not to prove you’re right, but to hear the cash register ring.” 

These are the words of the Marty Schwartz trader that deserve to be written with gold. The point is to forget about what you think. Instead, listen to what is said if you want to make money as a trader.

2. Think about losing money before thinking about making money

“Before taking a position, always know the amount you are willing to lose.”

Firstly, it is absolutely imperative to think about how much money you can afford to lose. Because trading is the arena where fortunes are made or lost in a matter of days. Therefore, it is important to throw as much money as you can afford to lose. In a nutshell, think about losing money before thinking about making money. 

3. Always reflect on what you are about to do

“Before putting on a position, always ask, ‘Do I really want to have this position?”

Again, this is very important advice from the mighty mind of a legendary trader. It asks you to reflect on what you are about to do. Because what’s done cannot be undone. Therefore reflecting on your position before entering a trade can save you from a wrong move. 

4. Follow the moving averages

“I try not to go against the moving averages; it is self-destructive.”

Marty Schwartz trader always follows moving averages. He uses 10-period Exponential Moving Average (EMA). This is the right approach because following moving averages help you get a clear picture of the market. You can also filter out the noise by following moving averages. Therefore, follow this yet another golden rule and take the right step to success. 

5. Don’t be overconfident

“My biggest losses have always followed my largest profits.”

It is yet another precious piece of advice because controlling one’s emotions is the real challenge. You cannot think of yourself as a demigod or indestructible. Therefore, overconfidence may lead you to catastrophe. Being rational and keeping emotions at bay are the keys to avoiding huge losses.

6. Always follow a trading strategy

“If you have a game plan prepared ahead of time, it can help you find courage in the heat of the battle.”

Yes, strictly following a strategy or a trading plan is the right way. Once you develop a strategy for yourself, you need to follow it no matter what happens. You may tweak it along the way but shouldn’t disregard it in any case whatsoever. 

7. Always have a checklist

“I review my checklist. It is a handwritten sheet laminated in plastic and taped to the right-hand corner of my desk where I can’t overlook it.”

It seems a pretty ordinary rule but it isn’t. A checklist helps you stay on the right track. It empowers you not to get astray in any case. Thus, keeping yourself on track means reaching the destination quite easily. 

The wrap-up

Marty Schwartz trader is undoubtedly among the best traders the planet earth ever witnessed. He is wise and he is witty. He is also a disciplined trader who knows the art of making money by being disciplined. His golden rules are there for anyone to follow. He made his fortune by following those rules. Therefore, you can also achieve success by following those rules. Moreover, if you really want to get an insight into the tale of being a Wall Street trader, Schwartz’s book is a really great source. The book isn’t just an autobiography. It is in fact, a torch that can illuminate your road to successful trading.