Schwartz est l'un des Market Wizards interviewés par Schwager dans son premier tome. Son style est technique et à court terme.
I turned from a loser into a winner when I was able to separate my ego needs from making money. When I was able to accept being wrong [...] By living the philosophy that my winners are always in front of me, it is not so painful to take a loss. If I make a mistake, so what !Quelques extraits de son interview :
- Bob Zellner taught me how to analyze market action.
- I consider myself a synthesizer; I didn't necessary create a new methodoly, but I took a number of different methodologies and molded them into my own approach.
- I found a guy, Terry Laundry, who lived in Nantucket and had an unorthodox approach called the Magic T Forecast [...] His basic theory was that the market spent the same amount of time going up as going down [...] The point you use to mesure the time element is not the price high, but an oscillator high, which precedes the price high.
- I developed and synthesized a number of indicators that I used to determine when the market was at a lower-risk entry point. I focused on determining mathematical probabilities.
- If I am wrong, I am going to use risk control and stop myself out X dollars away. That is the most critical element.
- I used fundamentals for nine years and got rich as a technician.
- After the first four months, I was ahead by $100,000. The next year I earned $600,000. After 1981, I never earned less than seven figures.
- In my futures trading, I didn't try to make two one year, four the next, eight the next etc. I used my profits to invest in real estate and other things to enhance the quality of my life. I was broke in the seventies, and I never wanted to be broke again.
- I'm proud of my futures trading, because I took $40,000 and ran it up to about $20 million with never more than a 3 percent drawdown.
- I can't stand most established institutions. I have a me-against-them mentality, which I believe helps me be a better, more aggressive trader. It helps as long as I maintain an intellectual bias in my work and discipline in money management.
- Whenever you try to get all your losses back at once, you are most often doomed to fail.[...] After a devastating loss, I amways play very small and try to get black ink, black ink. It's not how much money I make, but just getting my rythm and confidence back.
- I've always had my biggest setbacks after my biggest victories.
- One of my rules is not to have a position when my moving averages in T-bills and bonds diverge because interest rates can't move very far until one confirms the movement of the other.
- The great thing about being a trader is that you can always do a much better job. No matter how successful you are, you know how many times you screw up. As a trader, you are forced to confront your mistakes because the numbers dont't lie.
- I'm extremely well diversified. My thought process is that if I screw up in one place, I'll always have a life preserver someplace else.
- I start off every year with a clean state. That's my philosophy: January 1, I'm poor.
- I hired four people, but nobody lasted. [...] I taught them all my mehodologies, but learning the intellectual side is only part of it. You can't teach them your stomach.
- One of the most suicidal things you can do in trading is to keep adding to a losing position.
One of the tactics in the Marine Corps officer's manual is either go forward or backward. Don't just sit there if you are getting the hell beat out of you. Even retreating is offensive, because you are still doing something. It is the same thing in the market. The most important thing is to keep enough powder to make your comeback.Ses règles de trading :
- I always check my charts and the moving averages prior to taking a position. Is the price above or below the moving average ? That works better than any tool I have. I try not to go against the moving average; it is self-destructive.
- Has a stock held above its most recent low, when the market has penetrated its most recent low ? If so, that stock is much healthier than the market. Those are the types of divergences I always look for.
- Before putting on a position always ask, "do I really want to have this position ?"
- After a successful period, take a day off as a reward. After a strong run of profits, I try to play smaller rather than larger.
- Bottom fishing is one of the most expensive forms of gambling. It's OK to break this rule on occasion if you have enough justification.
- Before taking a position, always know the amount you are willing to lose. Know your "uncle point", and honor it.
- When T-bonds and T-bills diverge, have no position until one confirms the direction of the other.
- Work, work and more work.
- The most important thing is money management, money management, money management. Anybody who is successful will tell you the same thing.
- The one area that I am constantly trying to improve on is to let my gains run. I'm not able to do that well.
- If you're very nervous about a position overnight, and especially over a week-end, and you're able to get out at a much better price than you thought possible when the market trades, you're usually better off staying with the position.
I alway take my losses quickly. That is probably the key to my success. You can always put the trade back on, but if you go flat, you see things differently.Ses conseils aux débutants :
- Think that you can become more successful than you ever dreamt, because that's what happened to me.
- Learn to take losses. The most important thing in making money is not letting your losses get out of hand.
- Don't increase your position size until you have doubled or tripled your capital.