Basically, I had no real grasp of trading principles; I was doing everything wrong. Then in October 1971, while at my broker’s office, I met one of the people to whom I attribute my success. Marcus is one of the finest traders I have been privileged to know. Fortunately, some additional persuasion by a mutual friend helped change his mind. When I met Marcus for this interview, it had been seven years since we had last seen each other.
It has increased over the years as they have made money. I would say on average about $2 million each. Driven by supply and demand day trading forex for physical goods; if there is a true shortage, prices will tend to keep trending higher. You realized all this late Friday.
Are you saying that as long as you think the fundamentals, as you perceive them, are unchanged, you will hang tough no matter how much the position goes against you? Of course, if it is triple horrible, I might trade around the position to take the pressure down a little bit. I would say, “OK, this looks awful; I see nothing but buyers. Why don’t I join the buyers and see if I can make some money.” In a matter of speaking, I dichotomize myself. I have a fundamental view, which I believe in my heart, but I try to separate that from the short-term fervor and intensity I may see in the market.
We just bailed out of our long currency positions like crazy. That weekend, President Carter announced a dollar inside bar trading strategy support program. If we had waited until the next V.S. Trading session, we would have been annihilated.
The varying personalities and systems of the people interviewed in this book are a good example of that. 2) the social arbitrage trader buckling traditional technical and fundamental analysis frameworks to create a system based off social data in our big data landscape. These supertraders make millions of dollars-sometimes in hours-and consistently outperform their peers.
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In the early days of T-bond futures trading, the depth was low and you could read when people were overextended long or short. By “trying too hard,” do you mean pressing when there is no trade? Pressing is one of the reasons I’m sitting in here with you for so long during trading hours. The markets haven’t traded well in weeks, and we are proud of ourselves for not having thrown a lot of money away. Is reading other traders a key component of your personal trading right now?
I think you are much better off owning a few stocks and knowing a great deal about them. By being very selective, you increase your chances ofpicking superior performers. You can also watch those stocks much more carefully, which is important in controlling risk.
Market Wizards Jack D Schwager
When did you begin trading again? After a few months, I started trading AMEX stocks, but I found it amazingly slow. I missed the leverage of the commodity markets. I didn’t think I could successfully support myself trading stocks. Around that time, I ran into a friend who is a great options trader. I told him about my experiences and he suggested that Ijoin him.
The book tells a story about a trader who makes a bet that he can make anyone a successful trader if they could get a proven strategy. His disciples were called ‘turtles’ . What goes for stocks also goes for other asset classes too, suggesting Event Buzz may have applications for options traders in many different markets. This book gives you the complete knowledge insight of successful traders. In technical analysis, a price area at which a rising market is expected to encounter increased selling pressure sufficient to stall or reverse the advance. Relativestrengtho In the stock market, a measure ofa given stock’s price strength relative to a broad index of stocks.
It is just a matter of statistics. If you take something that has a 53 percent chance of working each time, over the long run there is a 1()() percent chance of it working. If I review the results of two different traders, looking at anything less than one year doesn’t make any sense.
It sounds like you had a minor compulsion to pursue it. Anyway, the traders at the Ginnie Mae desk taught me a few things, and I went out and opened almostevery mortgage banker account in Salt Lake. I felt extremely hostile, but I didn’t want to show it because he never promised me any results.
The point here is not that technical analysis is better than fundamental analysis, but rather that technical analysis was the methodology that was right for him. Some of the other traders interviewed in this book, such as James Rogers, have been very successful using fundamental analysis to the complete exclusion of technical analysis. The key lesson is that each trader must find his or her own best approach. The second element behind Schwartz’s transition to success was a change in attitude. As he describes it, he became successful when his desire to win took precedence over his desire to be right.
Everybody has a profit; everybody is happy. I would imagine if you go through 7,000 stocks, there must be quite a large number that meet your criteria. On average, there are probably only about seventy stocks that meet the criteria, because it is tough to meet all the conditions.
Trend Following, 5th Edition
Also, I plan to never stop learning. Any other volume signals you look for? When the market, or a stock, is bottoming, you want to see increased volume combined with an absence of further price progress on the downside. For example, if the Dow declines from 2,200 to 2,100, trades down to 2,085 the next day, and then closes higher on increased volume, it demonstrates support. It suggests that there are a lot of buyers coming in.
I went to New York in November 1977 and met with eight big-name companies, seven of whom opened accounts. I was at the right place at the right time. Given today’s increased scrutiny, are people who violate the confidence of dualtrading [handling customer orders and trading one’s own account] likely to get caught? It is still very difficult to create a flawless audit trail in an open outcry market. Are most of the significant size traders on the floor just traders, or do some also handle customers? They all are either brokers or traders now.
If the market keeps going the way it shouldn’t go, especially if it is a hysterical blowoff, then you know an opportunity will present itself. I didn’t say you were way off timewise, but pricewise it must have been a pretty scary ride. When you do a trade like that, isn’t there a point where you have second thoughts? That brings to mind a classic example ofbysteria. In late 1979-early 1980,the gold market witnessed an incredible accelerated advance. I guess so, because when the conservatives did win, the market exploded that same day.
I walk into the pit every day with a clean slate, so that I can take advantage of what is going on. A clean slate sounds like you come in with a flat position every day, but you obviously hold positions overnight. So, you figured you would wait till the next day. Yes, and do you know what I did to hedge myself?
That is the only way to go; there is no doubt about it. Why were you attracted to that market? It was a new market and seemed more umarkets manageable than the conventional commodities. I figured my business would grow more steadily if I focused on that market.
That is how people were thinking in those days. Leverage-The futures marlcets offer tremendous leverage. Roughly speaking, initial margin requirements are usually equal to 5 to 10 percent of the contract value. The high-risk reputation of futures is largely a consequence of the leverage factor.
Girls That Invest: Your Guide to Financial Independence through Shares and Stocks
By helping one kid, you can have an impact on his family and other kids. We have also recently set up a new program called the Robin Hood Foundation. We are trying to seek out and fund people who are on the frontlines in providing food and shelter to the poor. We are seeking out the people who are used to working with virtually no budget at all, rather than the bureaucracies, which often do not deploy the money effectively.
The Toyota Way, Second Edition: 14 Management Principles from the World’s Greatest Manufacturer
Two weeks ago you were very bearish. You mean besides the Wall Street Journal article that publicized to the world that I was short 2,000 S&P contracts? The first thing I do is put my ear to the railroad tracks.
Surely, some people lose because they lack the skill, even though they really want to win. It is a happy circumstance that when nature gives us true burning desires, she also gives us the means to satisfy them. Those who want to win and lack skill can get someone with skill to help them.
Advances in Financial Machine Learning
Having traded both the stock and commodity markets, would you say they behave differently? In contrast to the commodity markets, the stock market very rarely gives you the opportunity to enjoy a meaningful trend. Did you make any effort to learn anything about the markets in the interim? I studied the gold market, learned how to chart, and became familiar with the concept of overbought and oversold markets. I figured that if I bought a severely oversold market and left myself enough money for two margin calls, I couldn’t lose unless something drastic happened in the economy. Didn’t it occur to you that you should learn something before you started?
It’s not a matter of predicting, it’s a matter of clearly seeing what is going on, and what that’s likely to imply in the near future so that you can trade advantageously. He just finished his most recent book calledUnknown Market Wizards,which profiles some of the greatest unknown traders, some of which have been sourced via FundSeeder. Aside from reading books like the ones listed here, you can improve your trading psychology through discipline and self-awareness. Journaling and inner dialogue can help you track your thinking and ensure you stick to your trading plan.
But even more important is the idea of trading a long in one market against a short in a related market. For example, right now, although I am net short the dollar, I am long the yen and short the Deutsche mark.. In all my trading, if I am long something, I like to be short something else. Will the interbank market price response to such events be less extreme? Yes, because what happens on the futures market is that the locals back away and let the stops run. The only thing that pulls the markets back is the arbitrageurs who have the bank on the other side.
Stock Market Wizards: Interviews with America’s Top Stock Traders
Yes, that was the number one reason. The second reason was that the transition occurred during the 1986 runaway bull market. I was bound to lose because my style was not based on following trends. Because there were too many players?
Then I bummed around for another few months, just working temporary jobs to pay the rent. It sounds like you were looking for revenge. Every time I looked at a commodity chart book, my eyes would edge over to the soybean chart, then I would quickly flip the page. I watched the market peripherally for years before doing anything.
I felt tortured because I wanted to be free to trade without going through this elaborate charade. A trader who made tens of millions using a unique approach that employed neither fundamental nor technical analysis. Douglas uncovers the underlying reasons for lack of consistency and helps traders overcome the ingrained mental habits that cost them money.
Probably the saddest thing I ever did was to became a trader too. I was a great broker in my twenties, and if I had parlayed that for ten years, I probably would have ended up where I am now without enduring all the pains of trading. I consider trading to be an unrewarding, unglamorous game. I was the biggest trader and the biggest broker in the same market.
They wanted to know when they could go on vacation, get raises, etc. I wasn’t interested in any of that; I was interested in investing. In September 1979, I decided it would be my last year. But then, in October, there was a big collapse in the stock market, which we sailed right through. It was so much fun that I decided to stay on one more year. Why were you expecting a financial collapse?