Martin Schwartz: the Champion of Wall Street
Published: July 28, 2020 by Andrew
When a Trader wins a Trading Championship with an exceptional performance, everyone wants to know how he did it. Martin Schwartz has achieved this record and in this guide we will try to explain what strategies led him to that result.
We will analyze his career as a trader, the tips and tricks he can teach us to become more profitable traders.
We will also show which platforms to use to get good results, broker like eToro, which allows you to invest without paying commissions.
Who is Martin Schwartz?
Martin S. Schwartz, born March 23, 1945 is an American trader who made a fortune by selling stocks, index futures and options.
He graduated from Amherst College in 1967 and a master degree at Columbia University in 1970.
Between 1968 and 1973 he served in the military and took his leave as captain. In civilian life he worked as a financial analyst at EF Hutton, accumulating approximately $ 100,000.
At that point he started investing and became popular when he won the United States investment championship (Wall Street) in 1984. He later opened an investment fund.
After this achievement Schwartz wrote the book “Pit Bull: Lessons from Wall Street’s Champion Day Trader”
Martin Schwartz: Pit Bull
Martin Schwartz is one of the most famous traders in the world, also thanks to the extraordinary performance in the trading championships that he won.
In the Pit Bull book, Schwartz describes a trader who for a decade has lost the money worked and paid on Wall Street on the markets.
Then came the famous leagues of 1984, when he achieved a 781% yield.
Most of the investments made by this extraordinary trader concerned futures on the S&P 500 index, one of the world’s leading stock market indices, but also traded in crude oil and options.
Martin Schwartz: best broker platforms to invest
The platform used to invest is undoubtedly among the many components that make money from trading.
Martin Schwartz has a predilection for trading Indexes, especially US, Shares and some Commodities.
In its operation it is necessary to be able to also do many daily operations, both upwards and downwards and therefore the most suitable platforms for this purpose are the CFD Brokers, which allow you to trade without commissions.
CFDs (contracts for difference) give the opportunity to bet both upwards and downwards and make money (if the forecast is right) in any economic situation.
These financial contracts are very cheap as the brokers that issue them do not charge commissions and are absolutely safe and regulated like futures and options.
Invest with CFD Brokers
Here are the requirements that a CFD Broker must possess in order to operate safely:
- Offer commission free trading.
- A CONSOB license, CySEC or equivalent, to guarantee the security and reliability of the Broker.
- The possibility of investing both upwards and downwards (Selling Short).
The best CFD Brokers to trade following Martin Schwartz’s operational strategies are eToro and ForexTB.
eToro: Automated Trading and Intuitive Platform
eToro has achieved such popularity that it is undoubtedly the most used CFD Broker in the world.
Supported by all the licenses, it can operate in Europe in total safety.
eToro offers a very intuitive platform, which allows you to operate quickly on any market.
- To invest with eToro just choose an Index, a Share, a Commodity, etc. click on the “Invest” button on the platform, decide how much to bet on the operation and whether to buy or sell (short).
Many traders would prefer to rely on the experience of more experienced investors, for this reason eToro has created a tool that allow you to copy the operations of the best traders in the world (on eToro).
The system is called Copy Trading and offers two great advantages:
- You can get the same returns as experienced traders
- You learn the strategies of these big investors
To use Copy Trading you simply have to follow these steps:
- Register on eToro with the link at the end of the review
- In the Copy People section choose the traders to copy, based on their earnings
- With a click, Copy Trading will copy the operations of the chosen traders to your account
So you will get the same returns as these trading experts (in proportion to the investment), without doing anything
With this tool even an inexperienced investor can make money like an expert, because he copies his operations!
Here are the average annual returns of some of the best eToro traders:
Click here and choose which traders to copy
Both “automatic trading” and “manual trading” can also be tested on a free Demo account, without taking risks, with virtual money.Click here to sign up for free
To learn more, read our full eToro review
ForexTB: Trading Signals and course to become Trader
ForexTB is the perfect broker for anyone who wants to become a successful trader.
This intermediary has created and arranged a series of services to support investors that facilitate the learning and growth of a beginner.
As a first step, ForexTB has created one of the most complete and detailed trading course on the market and offers it for free to its users, just download it from the link below:Click here and download the trading course for free
To practice the notions learned in the course there are two platforms available, both free:
- The Web platform, very simple and usable by any browser and device without downloading any software
- Metatrader 4, the most used trading software in the world, is very technical and full of customizable tools and indicators
In addition to the theory, ForexTB also offers practical support to traders in the form of Trading Signals. These operational indications are developed by Trading Central and have a success rate of over 70%. They are very useful for investing more precisely and wisely.To receive free trading signals click here
Read our ForexTB review for more information
Martin Schwartz: Tips and Tricks
Martin Schwartz is basically a Day Trader and his investments have mainly ranged around the stock market and major US indexes.
Let’s see now what are the lessons we can learn from the investments made by this trader and what tricks we can take to increase our profits.
Act quickly in case of danger
He is said to have learned this lesson when he was in the Marines and thus avoided the famous collapse of Black Monday in 1987.
He was trading on the S&P 500 and was heavily positioned on the upside. That day, the high reached $ 269 and his speed of reasoning and execution allowed him to liquidate everything at $ 267.50, allowing him to reduce losses to $ 315,000 instead of $ 5 million.
Marty (diminutive of Martin Schwartz) remembers this trade, despite being a loss, as one of the best of his career.
Be prepared the night before
It is very important for Martin Schwartz to prepare for the trading day the night before.
It is necessary to note the Pivot Point levels, trace the values of the indicators and plan which patterns could develop the next day.
Every market day you must be prepared, keeping in mind what direction to take.
Trading is primarily “waiting”
Trading is often fun, but only when you are operating.
To make a similarity we can compare it to the game of poker. Nobody wants to sit at a green table and spend all their hands for hours, players want action, and it is in search of this action that they make mistakes!
Poker is also made of waiting, you have to wait for the right hand, the opportunity for profit, passing most of the time.
In trading you have to know how to wait, sometimes there are no trades to do, it can take days before finding the right configuration and you have the impulse to enter the market anyway.
Here is what distinguishes a professional from a novice trader: The neophyte looks for action, the professionicta tries only to make money!
“Trading” is a Job
Marty had pneumonia a few years ago and a colleague of him said that while they were taking him on a stretcher outside his office, he was still trading and did not stop until the elevator doors closed.
Trading is a job in all respects and must be taken seriously.
Martin Schwartz Strategy
It is not easy to understand the trading strategies of Martin Schwartz, he has not described exactly how he works and is not “transparent” as Warren Buffett, although there are some hints in his book Pit Bull.
Let’s describe the main strategies used by Marty.
A great inspiration for Martin Schwartz were the searches of Terry Laundry, a very particular trader.
Laundry has developed what is known as T-Theory, which theorises that markets consolidate for the same time that they go into trend.
According to this theory, there is a period of action and a period of rest, Laundry has called this idea “The theory of combined trend times”.
Here is how Laundry graphically explains his theory applied to the Dow Jones:
Red light, Green light
In his book, Martin Schwartz often speaks of the 10-day exponential moving average as his “Red light or Green light”.
In other words, Marty does not keep positions open if prices are below this Moving Average and vice versa for Short Selling.
I know you expected some incredible indicators but sometimes simplicity is the right way and even a 10-day EMA can give you the signals you need.
This filter is used to avoid many losing trades. A simple filter based on the moving average can radically change the trading results.
For Marty, it is often the exchanges that are not made that make the economic balance positive.
Divergence and Convergence
Here is another filter used by Marty, identifying convergence and divergence in the markets is very important.
A sign of strength in a stock can be seen when it shows a divergence with another market. For example, the divergence of the S&P 500 with interest rates was a strong sign of action for Schwartz in the 1980s.
Now this inverse correlation is no longer so strong.
Martin Schwartz, in the past decade, has accumulated profits higher than those of the famous 80s mentioned in his book.
But this trader is modest, he often said that he does not know many things about trading, but what he knows, he takes advantage of.
The mentality of this investor is based on the concept:
Can it affect my profits? No? Then I don’t care.
Adopting its selective mentality is not easy but it is the basis of profitable trading, you cannot know everything and you need to know only what you need.
To test Marty’s strategies it is better to start with the Demo accounts, without risking money, in this way you accumulate experience without wasting money.
Here are the links to access the Demo accounts of the best trading platforms that we have reviewed:
- Access the eToro Demo account for free by clicking here
- Register for free on ForexTB and access the Demo account from this link
Martin Schwartz is an American trader who has made huge performances in his career.
Martin Schwartz won the U.S. trading championship in 1984 with an extraordinary achievement.
Martin Schwartz does not use a single strategy, but several together, find out what they are by reading our guide.
You need a CFD broker like eToro or ForexTB, which allows you to trade safely and without paying commissions.