Martin Buzzy Schwartz or the Wall Street Pit Bull was a top trader in the 1980s. After working as a financial analyst which he considered to be a dead job, he bought a seat on the American Stock Exchange. On August 13, 1979 Martin Schwartz had entered the Wall Street, on his way to become a champion trader.
Martin in his school days had an excellent academic record. He was a Marine Reserves Officer for 5 years before becoming an analyst. He was from an ordinary background but had strong analytical skills. These made him a combination of a sharp mind, discipline and strong work ethics. All of which contributed to him, turning out to be better than his peers.
The book is an autobiography which has been written in a brutally honest way. Mark has been candid about his experiences and has delivered top niche advice when it comes to dealing with lifestyle of a trader. His analysis of his losing days renders valuable lessons to the readers. The book chronicles the days of Mark Schwartz when he acquired the position of a trader at the American Stock Exchange.
Trading books have always given advice on how a trader should trade but not on how a trader should be. Mark has provided a glimpse on the inside story of a traders life. The complexities that a trader faces as well as the mental exertion that he suffers every day are explained by personal experiences.
Wall Street is the place where everyone wants to be but not where everyone can handle the pressure. The book is a glimpse of the high strain, high stakes of the Street. Every trader on the street is a potential gambler. And just like gambling, trading can alter from absolute passion to your unbalanced obsession. It includes a cautionary tale on dangers of being addicted to making money.
Life story of Mark Schwartz
Being an autobiography the books has acquainted us with the life story of Mark Schwartz. House in Hamptons, Park Avenue Apartment, extravagant vacations sure seem to be a luxurious life but the inside story makes a person feel emphatic to the writer. Mark was surely a good trader but writing wasn’t the best of his skills. The trading jargons used in the book makes it difficult for a person from the non-financial background to understand the concept. But the book delivers good advice though.
Mark in the final chapter of his book has walked us through his typical day. A peep into his daily schedule makes us realize; all that money comes at a price. Marks Day starts at 7, but his work schedule begins around 8. Reviewing the work being faxed overnight, reading the reports that were released from post market analysis, Listing P&L’s of all accounts and trades of the previous day, was equal to the refreshment from morning tea for Mark.
Next activity in line is the calls to brokers to get their support and resistance on the bonds for the day. He usually began his day by trading bonds. According to him it was a good way to loosen up for the rest of the day. But being an expert in futures, it always remained in the back of his mind. If the F sign went up in the morning, bonds were the last thing he was concerned about. F sign means all the normal rules in future trading are suspended for the day and it is now in the hands of the boys at the Street.
His mid-day routine included rifling through the information floating around him. Analysing the faxes from all the companies and matching them to the information available. Reviewing this information was essential for him to form an opinion.
Before forming an opinion Mark had a practice of reviewing his checklist; his handwritten notes glued to the fax machine.
- Is it moving above or below the average?
- Is it above or below the dominant trend line?
- Are the previous highs and lows affected by the current price action?
- Is the Magic T Oscillator in the positive or the negative mode?
According to Mark the first and the last minute of trade are supposedly the most important ones. During this point of time any disturbance could change his temperament to an undesirable one. Have a running log of everything you trade, it keeps you updated. After the trading hours do the data collection and the review.
Mark being regarded as the champion trader was for his application of theories to reality. He formed his own analysis and stuck to them.
Key notes from his book are listed down below.
- Factor your observations into your decision making process.
- Whenever a large stock has a three day move in one direction do not buy or sell on the third day of a down move. Also remember that on the 1st day the smart people are moving, on the 2nd day the semi-smart people are moving and by the third day the dunces have finally figured it out.
- When stress gets so great that you think you might vomit, you should probably double your position but only if you are willing to use a tight stop loss on the entire position.
- The money from mutual funds is invested on the last and the first four days of the month. This makes the market stronger. The same pattern is repeated in case of index funds; but the only difference is that index funds happen midmonth. Remember to pen these days on your blotter.
- Keep an eye on the New High and the New Low every morning. It is a good place to start sometimes.