All quotes below are attributed to Schwartz.ġ. Here's a look at the trading rules that helped attribute to Schwartz outsized performance. "I consider myself a synthesizer I didn't necessarily create a new methodology, but I took a number of different methodologies and molded them into my own approach," he said. Eventually, those tidbits morphed into a strategy of his own. He started borrowing bits and pieces of other reputable strategies and testing their efficacy. When Schwartz removed his ego from the trading equation, he was able to home in on his process. "His average return in these nine contests was 210 percent - nonannualized!" The rules "In nine of the ten four-month trading championships he entered (typically with a starting stake of $400,000), he made more money than all the other contestants combined," Schwager penned. That epiphany turned Schwartz' trading execution from mediocre to extraordinary.Īllow Schwager to explain Schwartz' accolades as it relates to the US Trading Championship. Legends like Larry Hite, William O'Neil, David Ryan, and Mark Minervini all have extremely low tolerances for losing trades. Schwartz' theory towards cutting losing trades early and often echos that of an array of famed traders. "By living the philosophy that my winners are always in front of me, it is not so painful to take a loss. "When I became a winner, I said, 'I figured it out, but if I'm wrong, I'm getting the hell out, because I want to save my money and go on to the next trade,'" he said. I figured it out, therefore it can't be wrong."Įventually, however, Schwartz would learn to suppress his temperament - and that's when his performance went parabolic. "Before, admitting I was wrong was more upsetting than losing the money," he said. "I decided it was now time to be successful."Īt the time, Schwartz admittedly wasn't prosperous in a markets sense. "I always knew I wanted to work for myself, have no clients, and answer to no one," he said. To him, it was akin to a performance of sorts. "Although I had steadily earned good salaries, I was still almost broke because I consistently lost money in the market."Īfter spending years as a security analyst, Schwartz had grown tired of what he calls "tap dances" - meetings with an array of portfolio managers strewn across different cities, giving his best stock pitch. "I knew I had to do something different," Schwartz said in an interview for Jack Schwager's famed " Market Wizards" series.
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