The Real Rayner Teo

He turned $40,000 into over $20 million. Won the 1984 U.S. Investing Championship. And across the many trading contests he entered, he averaged 210% returns. Not bad for a guy who lost money for 10 years straight. This is the story of Marty Schwartz… Now, Marty wasn't your average guy. He had an MBA from Columbia and was a securities analyst at E.F. Hutton, flying around America, researching companies for a living. (In other words, he was the kind of guy who used words like "EBITDA" at dinner parties and wondered why no one laughed.) In his free time, Marty traded part-time. And lost money. Consistently. For 10 whole years. You're probably thinking: “If he's so smart, why is he losing?" Here's why… Marty is an analyst, and he’s paid to be right. You know, study a company, form a view, and defend it. So when the market disagreed with him, he didn't cut. He argued with the market. (It's like arguing with my wife. I can present all the facts, all the evidence, all the logic in the world… And I still lose.) After 10 years, he realised something had to change. So, he quit. He walked away from being an analyst, bought a seat on the exchange, and started over as a technician. No thesis to protect. Just price. So here are 3 trading rules that shaped his trading... 1. Follow the 10-day moving average. If the price is above the 10-day moving average, look for buying opportunities. If the price is below the 10-day moving average, look for shorting opportunities (or stay in cash). The idea is to trade when momentum is behind your back, and not against it. 2. Cut your losses fast. Even the best traders will encounter losses. The key is to cut your losses so you still have “chips” to continue playing the game. 3. Ignore fundamentals Fundamentals are useful to tell you which stocks are “good”. But it doesn’t tell you when exactly to buy or sell. That’s when technical analysis comes into play. The outcome? Marty Schwartz turned $40,000 into over $20 million and won the 1984 U.S. Investing Championship. He didn't find a better way to be right. He built a way to be wrong cheaply. Same guy. Same brain. Same market. The only thing that changed is that he stopped needing the market to agree with him.