Trading from Michael Marcus. The Golden Rules of a Great Investor
How many people do you know who have been successful in the financial markets? How confident are you that their words are backed up not just by words, but by real results?
Then a completely logical question arises, if you have practically never met such people, why do you trust advertising and stories about easy money, believe various analysts, and even follow their advice?
Michael Marcus, a famous trader and investor who managed to turn $30,000 into $80 million, addressed similar questions to reporters during an interview.
The advice and strategy of a practicing trader such as Michael Marcus carries a real and necessary information load, thanks to which almost any beginner can learn something important for himself.
In this article we will look at the key rules and basic principles on which Mile Marcus based his Forex trading strategies.
Michael Marcus's Principles and Advice
1. Personal Path and Individuality.
Michael Marcus' key rule when trading is to rely solely on your own strengths and your own strategy. In one of his few interviews, Michael said he has many friends who are traders and have achieved success in the stock market.
However, whenever he tried to apply their strategies, their insights, and views, he always failed.
The fact is, any strategy developed by a trader can only be effective in their own hands, as everyone has a different attitude toward losses, how they expect profits, and how they handle stress during trading.
Therefore, every beginner must follow their own path and develop their own individual approach to market analysis.
2. Cult of Personality and Social Trading.
How many forums have you stumbled upon when searching for information about the market situation? How many forecasts have you read from the global market sharks? Perhaps your broker has a chat feature where everyone can share their opinions?
In fact, all this social trading, where the opinion of the majority is taken into account, according to Michael Marcus, only leads to a drain on your deposit .
In fact, most of his trades were opened contrary to the market and the crowd's opinion, not the other way around. If you have the time and money to waste on social experiments that will lead nowhere, it's more productive to spend them on education and self-improvement.
3. Be objective and trade only the truth.
Beginner trading is much like wandering in a fog, unable to even see what's ahead.
Unfortunately, traders tend to trade untruthfully, because their opinions are clouded by various news, rumors, expert opinions, and the like.
However, to achieve success, you need to be objective and soberly assess the market situation. According to Marcus, only a chart and the changes recorded on it, using your strategy, can help you with this.
4. There are no universal strategies.
Many traders, including beginners, are consumed by the search for the Holy Grail and the endless refinement of their strategy to ensure it's effective always and everywhere.
However, the reality is that such strategies simply don't exist. Speaking from Marcus's experience, he created strategies tailored to specific assets and their specific movements.
In one of his interviews, he argued that there's no point in investing in third-world countries using the same investment strategy as in the US or European markets.
Therefore, Marcus insists that traders test their strategies on specific assets and adapt to their specific characteristics.
5. Five Percent on an Idea:
Michael Marcus achieved his success thanks to strict risk management. Of course, the phrase "set stop orders for your trades" sounds trite, but Marcus introduced another limitation that he's used throughout his life: the risk per idea should not exceed five percent.
An idea refers to a specific trading segment, specifically a specific strategy and stock.
Therefore, if you allocate five percent to one trading idea, you'll never completely lose your deposit, as this is practically impossible.
6. Trades should be opened when three factors coincide.
You're probably wondering about this trader's trading style and the tools he used.
In fact, he used three trading styles to make decisions. First, he studied the trend direction using technical analysis . He then compared the trend direction with the fundamental analysis, studying the underlying economic context.
The trade itself was opened at the moment of a news release, with Marcus monitoring the crowd's reaction and sentiment, which had to align with the technical and fundamental data. If any of these factors upset the balance, the trade was not opened.
In conclusion, it's worth noting that Michael Marcus's strategy and life rules will allow many beginners to avoid wasting time and money. Furthermore, following them will ensure success in stock trading .
