Marty Schwartz

It's been a while. I saw this months ago on Linda Raschke's site but was too lazy to post it and here is the source:

https://www.lbrgroup.com/index.asp?page=ClassTranscripts2002_103102

lindarasc: 15:09:13 Linda, my question is how does a trader increase their size in relation to one's account. Everthing I have read always states to not risk more than 2% of your equity. I have read Marty Schwartz's book and when he was getting his system down started on year with Aprx. 1,000,000 and ended the year with 6,000,000. I'm stating this because I can't figure out how he made so much and what type of money management h
lindarasc: 15:10:04 you know......every trader has exceptional years.........and in the 80's, keep in mind that margin requirements were a fraction what they are now in many markets....
lindarasc: 15:10:29 used to be that you could be short premium (like OEX straddles) for a tenth of what it would cost you now days.
lindarasc: 15:10:49 Marty is a trader who is exceptionally good at "loading the boat" when everything lines up.
lindarasc: 15:11:08 He is scalper, nickel and dime trader like manys....
lindarasc: 15:11:14 he makes many small trades....
lindarasc: 15:11:24 he also always has a stop in place....
lindarasc: 15:11:33 but....he is constantly PROBING for a turning point...
lindarasc: 15:11:53 and if he feels that he is finding one., he is very good about being exceptionally agressive at those key points.
lindarasc: 15:12:06 if you are RIGHT....then voila....it makes your year....
lindarasc: 15:12:11 just like the last recent low....
lindarasc: 15:12:44 someone who is right in synch with that type of turn and is very aggressive about adding to positions at that point and pressing them..
lindarasc: 15:12:49 you only need that once a year.
lindarasc: 15:13:05 optiosn are fantastic vehicle at these points.
lindarasc: 15:13:33 So maybe a professional trader can have a year like that one out of every several....ader like t n
lindarasc: 15:13:40 and marty has had flat years too....
 
The strategy is somewhat similar to a technique that I now use daily for the ER. I fade 2-3 points moves for 5 ticks. Continually fading higher as the surge moves higher, at some point the move has been exhausted. With some experience, you can get a feel whether it's the high/low of the day. Then it's time to hold for the longer move.
 
Quote from lwlee:

The strategy is somewhat similar to a technique that I now use daily for the ER. I fade 2-3 points moves for 5 ticks.
More...

Why ER and not YM or ES? Isn't there more slippage in ER?

Thank you.
 
What are the first three rules (out of ten) from Marty's checklist?


1) Check charts and moving averages prior to making a trade. Is it above below the EMAs. Positive or negative? Is it above or below a dominant trend line? Is the recent price action taking out its previous high or low?

2) Do I really want to have this position? Do I really want to win with this?

3) By honoring EMAs and using careful thought I automatically limit my risk. Moving average work better than any tool that I have. Don't go against them or it's self-destructive.
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If one is in touch with the Great Spirit, there is no need for "Mark Douglas" crap. :D
 
Basically, I'm taking advantage of the ER erratic-ness. Other traders cite the "smoother" volatility of the ES/YM as being the main reason they trade those products. I prefer the ER because the move are more profitable.

Gotta learn how to ride that bucking broncho somehow. If done correctly, this method actually is less riskier than some might think.

I've not encountered any slippage yet. The movements will trade through my target price so I'm usually filled. But say it doesn't, for instant if I'm last in the queue. It hits my price but I don't get executed. Depending on where the consolidation occurs, I either cancel the trade and go higher(lower) or I leave it in play.

Though this method should work for the YM/ES as well. I plan on using it on the YM if the ER's behaviour ever changes since it is more erratic than the ES.

Quote from slacker:
Why ER and not YM or ES? Isn't there more slippage in ER?
Thank you.
More...
 
It's funny to look back. I still remember trying to listen between the lines in the interview such as "saw the wave 4 (on gold) and should have play the wave 5 (Elliott waves)" - he plays pullbacks too although I think he is more known as a reversal trader. :)
 
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