Marcus has been one of the most successful traders. Over a ten-year period, he multiplied his company account by an incredible 2,500-fold! Consider this excerpt from an interview in Market Wizards by Jack Schwager:
Q. Did you know what you were doing wrong then?
A. Good question. 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.
Q. Who is that?
A. Ed Seykota. He is a genius and a great trader who has been phenomenally successful. When I first met Ed he had recently graduated from MIT and had developed one of the first computer programs for testing and trading technical systems. I still don’t know how Ed amassed so much knowledge about trading at such an early age. Ed told me, I think you ought to work here. We are starting a research group and you can trade your own account. It sounded great; the only problem was that the firm’s research director refused to hire me.
The philosophy behind his trading (excerpt):
Every trader has strengths and weaknesses. Some are good holders of winners, but may hold their losers a little too long. Others may cut their winners a little short, but are quick to take their losses. As long as you stick to your own style, you get the good and bad in your own approach.
The best trades are the ones in which you have all three things going for you: fundamentals, technicals, and market tone.
First, the fundamentals should suggest that there is an imbalance of supply and demand, which could result in a major move. Second, the chart must show that the market is moving in the direction that the fundamentals suggest. Third, when news comes out, the market should act in a way that reflects the right psychological tone.
I think to be in the upper echelon of successful traders requires an innate skill, a gift. It’s just like being a great violinist. But to be a competent trader and make money is a skill you can learn.
In the final analysis, you need to have the courage to hold the position and take the risk. You need to be aware that the world is very sophisticated and always ask yourself: ‘How many people are left to act on this particular idea?’ You have to consider whether the market has already discounted your idea.
I look for confirmation from the chart, the fundamentals, and the market action. I think you can trade anything in the world that way.
Comm. Corp. taught me to see the signal, like the signal, follow the signal. If you follow your system /methodology then over time your edge will kick-in and you’ll end up ahead.
More on Marcus:
Michael Marcus was originally profiled in the Market Wizards
Michael Marcus’s mentor was Ed Seykota
Marcus is another in the long line of alumni from the legendary Commodities Corporation
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