6 Trading Rules From Legendary Trader Marty Schwartz

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by Gavin in Blog
December 9, 2021 0 comments
Marty Schwartz trading method

We will be looking at six trading rules from Marty Schwartz, who is recognized as one of the most successful legendary traders in the world.

By learning his trading rules and strategies, you may be able to take advantage of the same secrets that made him so successful.

Marty Schwartz is 76 years old and first came to fame when he won the U.S. Investing Championship back in the 1980s.

Since this major accomplishment, he’s gone on to successfully trade in many different types of money markets, including the stock market and commodities markets.

We will look at six different trading rules that have guided Marty Schwartz through his lifelong investing success.


#1 – “Do I Really Want To Have This Position?”

This question may be one of the most impactful trading rules that every investor should follow.

It’s extremely straightforward.

Ask yourself this question before you take any position in an investment market.

You likely won’t have any remorse in your investment decisions if you can answer this question with a confident ‘yes’.

#2 – Always Trade On The Side of the Moving Average

If the moving average is showing signs of positive growth, there’s no sense in opposing it.

This is one of the most important trading rules that Marty Schwartz has followed throughout his life as an investor.

He has consistently called all trading strategies that oppose the momentum of the moving average as a wish to ‘self-destruct’ your portfolio.

#3 – Don’t Risk More Than You Are Willing To Lose

This concept is true in just about every category dealing with finances.

It’s true for gambling, investing, and simply spending your money on a daily basis.

The general strategy is simple, don’t risk or spend more than you can afford to lose.

#4 – Don’t Trade Too Much

One of the biggest mistakes that many investors make is that they trade way too often.

Even after successful trading days, some investors try to make unnecessary trades that eventually eat into some of the past profits or even lead a path towards overall losses.

Marty Schwartz agrees and highly recommends that all investors take reasonable breaks in between trades so that you don’t ever get addicted to trading too much.

#5 – Don’t Gamble When Trading

It is always important to conduct the appropriate amount of research before submitting a trade.

If you start diving into positions without proper amounts of research, your investment starts to turn into a gamble real quickly.

#6 – Don’t Trade Big After Winning Big

If you have a successful trade, reduce your investment stakes to avoid losing your gains.

This is one of the most crucial rules, and Marty Schwartz has strongly aligned with this particular trading secret for his entire life.


These are 6 of Marty Schwartz’s most important trading rules that he has followed throughout his life as an investor.

Before investing huge sums of money in the money markets, all new investors should learn about these trading guidelines and incorporate them into their trading tactics.

Trade safe!

Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.

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Options Trading 101 - The Ultimate Beginners Guide To Options

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