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3 trading principles, trading genius Michael Marcus made a profit of more than 2

Published: Aug 23, 2024
Updated: Aug 23, 2024

Almost all investors have experienced the pain of failure. Today, we introduce this trading master who has suffered continuous losses and often exited with a blown account. After many failures, he finally summarized the reasons for his failures. Then, he used 10 years to increase the managed account funds from $30,000 to $80 million, a 2600-fold increase. He is one of the world's largest currency pair players - Michael Marcus.

Starting as a researcher, he never gave up after failures.

Michael Marcus majored in psychology and achieved excellent grades during his university years. After graduating from college in 1969, he became a high-paid researcher, and Clark University also provided him with a psychology doctoral scholarship. If he had continued on the academic path, Marcus could have comfortably become a professor.

However, things change, and under the temptation of a friend, Marcus left the campus and became a trader. In the early stages of Marcus's trading career, he tasted the bitterness of failure, with all 8 initial trades failing and suffering heavy losses. Marcus, who had experienced failure, did not lose heart. He believed it was not that he was not suitable for trading, but that he had not mastered the trading skills and methods. So he diligently studied trading knowledge and techniques, and finally made his first profit of $200 in a wheat futures trade, and earned $30,000 that summer.

Later, Marcus joined a company as a trading analyst and opened an account to trade in another company. However, good luck did not always favor him, and most of Marcus's trades were losing money. Until October 1971, he joined another trading company and met the guide of his career - Eddie Seago.

As one of the top traders in trading history, Eddie Seago was already a very successful trader at that time. During the period when Marcus worked with Seago, he often learned from Seago and learned two things: follow the trend until the trend changes; and be very patient.From $30,000 to $80 Million in 10 Years, Becoming the World's Largest Currency Pair Player

Later on, Marcus gradually emerged from his low point, and his trading skills became increasingly sophisticated. In 1974, Marcus became a trader for a commodity investment company, starting with a trading capital of $30,000. In 10 years, he grew his account's trading capital to $80 million, a more than 2600-fold increase.

In addition, on the day of the Soviet Union's invasion of Afghanistan in 1979, Marcus keenly noticed that the gold price in Hong Kong had not moved. So he immediately bought 200,000 ounces of gold in Hong Kong. A few minutes later, as the news spread, the gold price soared, and he made tens of millions of dollars in an instant.

In the currency pair market, Marcus had a deeper understanding. During President Reagan's tenure, the US dollar was very strong. Marcus often shorted hundreds of millions of Deutsche marks, making a substantial profit, which also made him one of the world's largest currency pair players at the time.

"Trinity" Trading Principle

It is understood that most of Marcus's trades follow the "Trinity" trading principle:

1. When there is an imbalance in supply and demand of the fundamental factors, it indicates that there will be significant fluctuations in the market.

2. Chart analysis must emit the same signal.

3. The market sentiment should be in harmony with the market trend. For example, in a bull market, bearish news can be ignored, and a slight positive rumor can lead to a sharp rise.Marcus stated, "Only when all three factors are in harmony can one start to make a significant investment." He believes that understanding one principle leads to understanding all, and the "trinity" principle remains unchanged for 50 years. He still starts with chart analysis, fundamental analysis, and market dynamics, and when all information is confirmed, he can make a move.

Four pieces of advice for "losers" and beginners:

For speculators who often lose money and investors who are just starting, Marcus has several pieces of advice:

1. Each trade can only lose 5% of the capital, so you can allow for 20 mistakes before being completely wiped out.

2. As long as you can maintain a normal analysis accuracy rate of 50%, you will ultimately make a profit.

3. Before entering the market, you must set a stop-loss point, and the stop-loss point must be realistic, not self-deceptive with a stop-loss in mind but not in action. The trading order entering the market should be accompanied by a stop-loss order to ensure immediate liquidation at a certain price. Even if you have only been in the market for 5 minutes and feel in danger at that time, you should close the position without hesitation, regardless of what others think.

4. Do not trade too frequently, and it is best to wait for the right opportunity to act. The ability to wait for the right market entry timing is the key to the success of investors.

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