The 8 Ironclad Trading Rules Of A Market Wizard - Marty Schwartz
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1. An object in motion will stay in motion
Once the price starts trending, there is a good chance that the trend will continue.
Amateur traders always try to call tops and bottoms.
Once the price starts trending, there is a good chance that the trend will continue.
Amateur traders always try to call tops and bottoms.
2. Donโt put stops below the low and above the high in a range
Amateur and inexperienced traders have โobviousโ stops.
This makes it easy to guess where the majority are.
Amateur and inexperienced traders have โobviousโ stops.
This makes it easy to guess where the majority are.
If you notice your trades get stopped and price reverses in the opposite direction, it might be time to re-think your approach.
3. Understand the news
Often, you donโt โtradeโ the actual number, but how traders and investors perceive the numbers
Surprises and deviations from expectations can move the markets.
Data which comes in as expected usually does not have any effect.
Often, you donโt โtradeโ the actual number, but how traders and investors perceive the numbers
Surprises and deviations from expectations can move the markets.
Data which comes in as expected usually does not have any effect.
4. Connect with your charts and work ethic
Most traders randomly flip through hundreds of charts, doing random stuff, playing around with indicators until they accidentally feel like they find something.
Most traders randomly flip through hundreds of charts, doing random stuff, playing around with indicators until they accidentally feel like they find something.
You need a more mindful and thought-out trading process.
This will help you achieve a more professional approach.
This will help you achieve a more professional approach.
5. Use a checklist and trading plan
โI review my checklist. Itโs a handwritten sheet laminated in plastic and taped to the right-hand corner of my desk where I canโt overlook it.โ
โI review my checklist. Itโs a handwritten sheet laminated in plastic and taped to the right-hand corner of my desk where I canโt overlook it.โ
โIf you have a game plan prepared ahead of time, it can help you find courage in the heat of the battle.โ
A checklist of entry criteria can help you avoid impulsive and emotionally driven trading decisions.
A checklist of entry criteria can help you avoid impulsive and emotionally driven trading decisions.
6. Before putting on a position always ask, โDo I really want to have this position?โ
Does it really match your criteria, or are you violating some of your rules?
Is your decision emotionally driven or based on sound logic?
Does it really match your criteria, or are you violating some of your rules?
Is your decision emotionally driven or based on sound logic?
Are you chasing a trade or trying to trade for excitement?
Waiting and reflecting on what you are about to do can help you stay out of bad trades.
Waiting and reflecting on what you are about to do can help you stay out of bad trades.
7. โMy biggest losses have always followed my largest profits.โ
During a winning streak, many traders become too confident.
During a winning streak, many traders become too confident.
Subsequently, traders tend to violate their trading rules, entering trades prematurely and even increasing their risk.
This eventually results in large losses because every winning streak has to end eventually.
This eventually results in large losses because every winning streak has to end eventually.
8. Remember your greatest enemy as a trader
โMost people think that theyโre playing against the market, but the market doesnโt care.
Youโre really playing against yourself.
You have to stop trying to will things to happen in order to prove that youโre right.
โMost people think that theyโre playing against the market, but the market doesnโt care.
Youโre really playing against yourself.
You have to stop trying to will things to happen in order to prove that youโre 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 youโre right, but to hear the cash register ring.โ
โย Marty Schwartz
Forget what you thought it was telling you five minutes ago.
The sole objective of trading is not to prove youโre right, but to hear the cash register ring.โ
โย Marty Schwartz
The last point includes two very important concepts:
A) Donโt let your ego get in the way of a trade
B) YOU are always responsible for the outcome
A) Donโt let your ego get in the way of a trade
B) YOU are always responsible for the outcome
Although a trader needs confidence and trust in his abilities and his method, he has to understand that he cannot control the outcome.
TL;DR
1. An object in motion will stay in motion
2. Donโt put stops below the low and above the high in a range
3. Understand the news
4. Connect with your charts and work ethic
1. An object in motion will stay in motion
2. Donโt put stops below the low and above the high in a range
3. Understand the news
4. Connect with your charts and work ethic
5. Use a checklist and trading plan
6. Before putting on a position always ask, โDo I really want to have this position?โโ
7. โMy biggest losses have always followed my largest profits.โ
8. Remember your greatest enemy as a trader
6. Before putting on a position always ask, โDo I really want to have this position?โโ
7. โMy biggest losses have always followed my largest profits.โ
8. Remember your greatest enemy as a trader
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Thanks for reading!
Make sure you follow me @Trader_Theory for more epic content on creating financial freedom through trading.
Also, if you found this valuable be sure to like and retweet the original post of this thread to help others. Thanks ๐
Make sure you follow me @Trader_Theory for more epic content on creating financial freedom through trading.
Also, if you found this valuable be sure to like and retweet the original post of this thread to help others. Thanks ๐
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