Kenny Sharkness: 62.9% a Year From a Method That Never Stops Changing

Last reviewed: September 2026. Every figure below is drawn from chapter eight of Market Wizards: The Next Generation unless it is explicitly labelled as our own arithmetic. Complete Trader’s Edge has not audited any trading statement.

Read Sharkness in his own words

Market Wizards: The Next Generation

Jack Schwager & George Coyle · 2026 · Chapter 8: “The Only Constant Is Change”

Everything below is our own analysis of the published record. The full interview, the CRWV option structure in his own words and the closing notes from both authors are only in the book.

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Frequent change is usually what destroys traders. Kenny Sharkness built a career on it. His approach is a constantly shifting collection of scores of strategies across multiple timeframes, which at first glance looks like a recipe for disaster, and has instead produced a 62.9% compound annual growth rate, roughly five times the S&P 500 over the same period.

The chapter is worth reading for two things that have nothing to do with the return. The first is the structure underneath the apparent chaos, which is not a system but a process: journaling, weekly and monthly reviews, process goals rather than money goals, and a deliberate practice of learning what is working for other traders and absorbing it. The second is the honesty about what happens when the market stops suiting you, which for Sharkness was 2022, and what that cost him.

How the returns were calculated, and why it matters

Schwager spends the opening of the chapter explaining the measurement problem, and it is worth repeating because it applies to every prop trader you will ever read about.

Prop firms do not work like hedge funds. They give a trader a set amount of capital they can lose on any day or week, plus a specific amount of buying power, which corresponds to their daily or weekly risk limit. Traditional entities think in monthly percentage returns. Prop firms think in actual dollars made or lost. Dollars do not permit the calculation of percentage returns or most return-to-risk statistics.

There are multiple ways to convert one into the other and none of them is perfect. Schwager says they tried several to see how the results varied, and that regardless of the method, Sharkness’s results were always Market Wizard worthy. The method they settled on was to start with a modest nominal account value and add his subsequent monthly profits and losses from 2015 to the present, then compute monthly returns and return-to-risk statistics from that series.

Our note, not the book’s. The percentage depends on the nominal account value chosen, and the authors say so. What does not depend on that choice is the shape of the return series: the gain-to-pain ratio and the Sortino ratio are computed from monthly returns, so they measure the relationship between his gains and his losing months regardless of the base. A gain-to-pain of 9.0 against the index’s 0.8 says his gains were roughly nine times the sum of his losing months. Read those two numbers rather than the headline percentage.

One more caveat is built into the statistics themselves. The 8.8% maximum drawdown excludes a single bad month in his first year of trading, when he was down 20%. That exclusion is stated openly and is reasonable for a first-year trader on a tiny base, but it is an exclusion.

Ithaca, poker and a $6,000 course

Sharkness grew up in Ithaca, upstate New York, and attended Ithaca College, majoring in finance. There were no trading courses. He describes himself as a typical college kid, partying too much, until graduation approached and he realised he needed a career. He read about corporate finance roles and concluded that path was not for him: not a salesy guy, not a people person.

Then he read books about trading and knew that was what he wanted.

The appeal was games. He played poker throughout college, though not terribly successfully. He played a lot of video games. His family played Scrabble, chess and board games growing up. He saw trading as another game, which is a thread that runs through this whole cohort and which Coyle picks up in his closing notes.

To be closer to the action he moved to Hoboken, New Jersey with four friends after college, renting the cheapest apartment they could find and splitting the rent, which he thinks was around $700 a month.

His first job was not a job. He enrolled in SMB Capital’s trader training programme and paid them roughly $6,000 for the course, which offered the potential to trade proprietary capital for their partner firm, Kershner. He went through three rounds of interviews to get that opportunity. He interviewed at a few other firms, but SMB was the only one with an actual training programme, and in retrospect he is not sure how valuable the programme itself was. What he felt he needed was to be trained, since he did not know anything then. The general culture was helpful in that they were interested in mentoring and developing traders who could ultimately manage money profitably. Other firms he talked to expected traders to put up their own money on a first-loss model.

He was funding his living costs from his parents, who paid his bills while he got going. He is clear-eyed about the privilege: they trusted he was making a good choice, gave him what amounted to an allowance, and it meant he could focus on trading instead of working a second job. He says he owes them a lot.

The training itself lasted three or four months and consisted primarily of videos covering the basics and a few key strategies, then a demo account for a few months, then real money at 100 shares at a time. There was never a discussion of a maximum amount he could lose before being cut off, because he was never in much of a hole to start with.

One of the strategies they taught is a useful artefact. They taught order flow: if there was a large bid for a stock at, say, $50, buy just ahead of the bid, knowing there was implicit support, in the hope of selling back to the buyer at a higher price if the buyer raised the bid. Algorithms have largely rendered that obsolete. The concept that survived is to focus on stocks moving on high volume.

Mendez, tick charts and stocks that run out of energy

The more valuable education came from sitting next to Gilberto Mendez, one of the partners and SMB’s top trader at the time. Sharkness was 22, and Mendez was making maybe $2,000 a day, which to a 22-year-old was unbelievable. He hounded him with questions.

What he learned was risk management and trading methods based on classic chart patterns: buying breakouts and fading extended moves. He was using tick charts, so holding periods were very short.

Two concepts from Mendez survived everything that followed.

The first is multiple timeframes. Before taking a trade off a tick chart he would examine the 5-minute, hourly and daily charts, making sure the behaviour on those timeframes did not invalidate the trade. If a stock was up six days in a row, he might pass on a tick-chart breakout because the stock was overextended. He still uses this concept today.

The second is that stocks have energy. When stocks move, they expend energy, which leads to time or price corrections to regain that energy. He calls it instrumental to his trading.

In the early days he did not hold anything for more than an hour, and was only allowed to trade 100-share lots. He notes that the 100-share minimum could be detrimental, because it did not allow the flexibility to sell, say, 50 shares if he wanted to reduce risk but hold part of the position. But it taught good habits, and before long he was allowed larger lots, then 1,000-share lots six months in, at which point he could adjust the number of shares to normalise risk across stocks at different prices.

It took about 10 months to become profitable. He had no losing month for a long time, but was not very profitable either. His first profitable year he made about $40,000, enough to start paying his own bills and not much more. It grew from there, but really took a few years until he was making good money.

The exit instinct nobody taught him

His main early strategy was a high-volume breakout from a tight consolidation, plus piggybacking some of Mendez’s trades. Back then his stops were incredibly tight. He tried to find entry points where he would be in the money right away, and if that did not happen, he would get out immediately. He might get in and out of the same stock multiple times in one day.

Schwager asks whether that exit discipline was part of his training. It was not.

SMB did not tell traders how to set stops or where to set them. It was up to each trader to figure out on their own. Schwager returns to this in his closing note and calls Sharkness a born risk manager, strikingly similar in that respect to Jason Berry in the previous chapter.

The consequence was a lot of very small losses. He was winning less than 50% of the time, and the magnitude of his wins offset the frequency of his losses. He was also biased toward shorting stocks, since successful shorts often have big moves that happen quickly, which fits an impatient trading style. Within a year or two he gravitated toward parabolic shorts for the same reason.

The parabolic short, and how it was killed

The strategy came from a trader on the desk named Peter To, who runs the website churningandburning.com and had started making money on it. Sharkness picked his brain and learned a lot from him. Then he did the work himself: he reviewed approximately 1,000 daily charts every day in search of patterns. Those reviews confirmed a tendency for stocks to collapse after parabolic upmoves.

The entry rule is specific, and it is the opposite of what most people assume a short seller does.

He also watched which types of strategies were working in the current environment, and when mean reversion was working he leaned into this type of trading. On support and resistance he is dismissive in a way worth quoting in substance: he looks at them, but never uses those levels to trade, because support is only potential support and resistance is only potential resistance.

The strategy worked because of a market structure that no longer exists. Back then you would have a stock with a one-million-share float trading 10 or 15 times its float in a single day, and it was easy and cheap to get locates, so you could hold the short overnight without exorbitant fees. With hindsight he believes some brokers were lending shares illegally.

That changed around 2017, when one of the big locate providers got into trouble with regulators. Getting locates became difficult and expensive. The high borrowing costs and the limited availability of shares led to significant price squeezes, and Sharkness’s verdict is blunt: it is now neither affordable nor safe to hold these stocks waiting for them to eventually collapse. He pulled back from parabolic shorts partly for that reason and partly because the strategy had become less meaningful given the growth in his account. To get to the next level, he needed strategies that scaled.

The merger that changed what he thought was possible

The most significant shift in his career came when SMB merged with Kershner.

Before the merger, SMB posted the daily profit and loss of its traders. Mendez, his mentor, was consistently one of the best, making about $2,000 a day, which Sharkness thought was amazing. Then the Kershner traders were added to the mix, and some of them were making $25,000 to $50,000 a day.

He says it was a game-changer in two ways. First, the numbers opened his eyes to what was possible, which he describes as very important in changing his mindset. Second, there was an internal system that let traders submit friend requests to other traders, and if accepted, view their actual trade executions. Some of the big traders accepted and were willing to discuss their strategies with him, which let him identify and incorporate new approaches that had significantly more scale potential.

Why would successful traders share? Not all of them would. For those that did, he thinks it was because they wanted to learn what he was doing. There was a quid pro quo to the information sharing.

What the Kershner traders were doing

He calls them gimmick trades, and the list is a useful catalogue of edges that exist because of market plumbing rather than opinion.

Those, plus strategies for stocks moving in response to news, gave him a much larger collection of trading strategies after the merger. He says part of his overall process has always been to seek new ideas and learn new trades, whether from conversations with Kershner traders or from traders on social media.

Stops that widened with the account

His stops have steadily widened as his account has grown, and he has migrated to longer holding periods. In general his stop placement now depends on the strategy and the timeframe. If he is doing a breakout off a daily chart, he manages the trade and sets the stop using an hourly timeframe. If he is playing a breakout above the day’s high, he might place the stop just slightly below his entry in case the stock does not continue to run.

He views his ability to adjust his approach to the timeframe as one of his main sources of edge. Some people find it difficult to trade across multiple timeframes; it comes naturally to him. He has always been a multitasker. In school he would have two screens going at once, typing a paper on one and playing poker on the other. He is not sure why he is like that, but the trait suits his trading style. It also, he notes, often leads to impatience.

The playbook, the anti-playbook and the weekly review

This is the part of the chapter that transfers most directly, and it is entirely process.

He journals his trades, which helps him learn from his mistakes and adjust his process. The rule he states first is the one most traders get wrong: you have to write things down as they happen, when they are fresh in your memory, or the process does not work.

The journaling feeds a goal structure that is deliberately not about money. He sets daily, weekly and monthly goals, which he believes is essential for improving as a trader, and they are process goals rather than profit-and-loss goals. He rewards himself if he does a good job of working on his goals, which might be something as simple as a glass of wine that night. Rewarding efforts to achieve goals is also part of the process.

The examples he gives are specific enough to copy. One of his main weaknesses is being over-eager, so a related goal is to make progress toward reducing over-eagerness. Before the trading day begins, he might consider whether he believes the current trading day will be a high-opportunity day for his style: is he trading just because he has made money recently, or are the current trade setups actually great setups? Through journaling he found he was exiting profitable trades too quickly, leaving money on the table, so he set a goal for the following month to pause before exiting a trade and consider whether he should hold longer.

On performance goals he is cautious. When he makes them, he tends to focus on the entire year, but he approaches them carefully, because the longer you trade the more you realise the market is the market and you cannot control the opportunities it provides. Sometimes there are lots of opportunities and sometimes few. As traders we can only control how we respond to what the market gives us, which suggests it is best to focus on process-oriented goals: things you can control.

He does keep what he calls motivational goals, which he believes are psychologically distinct from targeting a monetary goal. At 22 he set a goal of making $1 million by the time he was 30, giving himself eight years. He achieved it and set another similar goal. His framing is that a goal with a timeline is not the same as saying he needs to make X dollars this year: it provides something to work toward, which inspires him to work harder on process and improvement.

Steenbarger, and Breitstein

He works with Dr. Brett Steenbarger, and describes the benefit as aggregate rather than specific. Every day he would send a summary of his trading and they would review it together, with Steenbarger suggesting what he might do to improve. Two things stand out from that work: help with impatience, which he calls his demon, being overeager and getting into a trade too early or getting out of good positions too quickly; and encouragement to take larger positions when there was a great trade setup. Steenbarger also encouraged him to focus on his strengths so he could lean into them more effectively, which he says is essential alongside working on the negative aspects.

Mike Bellafiore introduced him to Lance Breitstein, and the two developed a friendly, collaborative rivalry that motivated each of them to strive for their best. Breitstein became one of the top traders at Trillium; Sharkness became one of the top traders at SMB/Kershner. They shared strategies and ideas, though Breitstein was primarily trading news flow, which was not Sharkness’s thing. What he did learn from him was intraday mean reversion and V-bottom trades.

AMC, KBIO and the cardinal sin

Two losses carry the risk lesson of the chapter, and the smaller one matters more.

AMC, 2020: down $3 million overnight

His worst drawdown on a single trade was an AMC short in 2020. He was down $3 million on the position the day before it topped out. He remembers it precisely because his parents came to visit that day, knew something was up, and he ended up having to tell them he had suffered his worst loss ever, probably three or four times larger than his previous worst.

He was a lot on the line, as he puts it, and thankfully he was up a lot on the year.

The framing he gives is the useful part. Most prop traders think in terms of how many dollars they can afford to lose on any given day. As his account grew, he focused more on weeks, not days, though the same principle applies. With the AMC trade on, he was viewing the loss in the context of a week’s loss potential, which enabled him to hold the position despite the huge one-day loss. It was still difficult to endure. Andy Kershner called him to say these things happen and he should not let it discourage him, which provided a boost given that it was Kershner’s money he was losing. He made the money back the next day when the stock collapsed, having held the position.

KBIO: the trade he calls the cardinal sin

KaloBios (KBIO) is the loss he calls most significant, and it cost about $150,000, a fraction of the AMC swing.

It was a $2 stock and he was shorting it because a sum-of-the-parts analysis implied it was worth maybe 40 cents. He expected the company to go bankrupt. He had a reasonable position and figured that, worst case, he might lose $15,000.

Then Martin Shkreli arrived with a reverse merger plan that caused the stock to explode upward. It went from $2 to $5, which caused him to freeze up a bit. Then it went to $7, and he made what he calls the cardinal sin of adding to his losing position. The stock kept going higher. He threw in the towel at $15, losing about $150,000. The stock subsequently rose to around $40, before Shkreli went to jail and it collapsed onto the Pink Sheets.

He notes the general danger: crowded small-cap shorts with limited available shares can go pretty much anywhere in a squeeze. Simon Russo describes the same dynamic from the other end of the same market.

What makes KBIO the more important of the two losses is what happened next. Over the following few months he made back the money he had lost, which he calls a pivotal point in his career, because once he made the money back it gave him confidence in his abilities as a trader. Not the largest loss in dollar terms, but probably the most significant.

Scores of strategies, and wanting to be the casino

Asked to elaborate on the ever-evolving stable of trades, he says trading strategies come and go, and he does not keep track of the number of different trades or strategies he monitors across all the various timeframes. He usually follows multiple trades simultaneously.

The types of strategies he is trading depend on the prevailing character of the markets. Some strategies do well in slow markets, others in volatile markets. He tends to do best when volatility is high. Historically he has had periods where he did not do well when volatility was low, so to counter that deficiency he added strategies to his portfolio that do well in low-volatility environments.

The framing underneath all of it is expected value.

He wants to take as many bets as possible, as long as they have a positive expected value.

Schwager pushes on this directly, noting that most exceptional traders have only a few strategies and wait patiently for opportunities, and asks whether Sharkness has any thoughts on his atypical approach. The answer is honest on both sides. One of his greatest strengths is his ability to process multiple things simultaneously, a characteristic inherent in his personality. But it is essential to note that in any given year, most of his profits come from only five or six trading days, which implies that much of his trading activity is unproductive. His counter is that trading frequently may keep him prepared for the big opportunities when they do arise. He is currently trying to reduce the amount he trades, and would like to potentially cut his trading in half so he can focus more on the big opportunities that allow for the most profit.

He also combats his impatience through sizing: he might be trading 10 different strategies simultaneously, sized accordingly, which Schwager picks up in his closing note as the more important structural point. Sharkness typically holds multiple positions at once, but there is usually one high-expectation trade that he sizes significantly larger than the others, and those aggressively sized trades account for a large majority of his profits.

Options, without the Greeks

Options became part of his method in response to routinely losing money on long calls when volatility collapsed. His worked example in the chapter is CoreWeave (CRWV), a stock that had gone from about $40 to $160 in roughly three months, and his long-term plan was to short an excessive upmove.

The structure he describes has three legs and he adjusts all of them continuously.

His two-component summary of the staggered implementation is the transferable version: buy calls when volatility is cheaper and sell puts when volatility expands; buy calls when prices are lower and go short the stock when prices are higher.

He does not use the Greeks. He figures out where the stock can go and then determines whether options offer a more beneficial way to express that bet in risk-reward terms. His reasoning for preferring options on the short side is exact: if he is short a stock, in theory he has unlimited risk, so he has to cover if it moves against him; but if he buys puts, or is short the stock and long calls, only his premium is at risk, so he can give the position more time to play out. He trades mostly weeklies, because his timing is generally good and he does not like to hold positions for long, so shorter-duration options cost less and offer greater leverage for the same premium expenditure.

The postscript matters. The book notes that shortly after the interview CRWV reached a high of $187 and then, in just over a month, plunged to near $100. Sharkness told the authors he never got a net short position. He was out of the trade the week of the interview. Had the stock gone up one more day into the $170s, he would have started to be net short by adding more short positions and covering some short puts. Had it gone towards $200, he would have been very short. The way it played out, he went flat a few days after they talked. The moral is not that the analysis was wrong. It is that the entry never triggered, and he did not force it.

2022, and what a bad year actually looks like

Schwager points out that before April 2022, Sharkness had only one drawdown greater than 3%, lasting one month. Then in April 2022 he began a drawdown that lasted through February 2023, a period that looks different from the rest of his record.

His explanation has three parts and none of them is a bad trade.

He had a great year in 2021, when many stocks were moving. In 2022 the markets changed and he did not adapt quickly enough. He ended up getting repeatedly dinged for relatively small amounts, which added up to a meaningful amount. It was less about it being a bear market than about a lack of follow-through: stocks would go up one day, look like they were going to run, and then the rug would get pulled out from under you.

The second part is the honest one. He probably should have known a drawdown was coming: he had great years in 2020 and 2021 and started thinking it might go on forever. While he has been good about remaining humble over the years, he has found that the largest drawdowns tend to come after a strong run in performance and related ego losses. When things start to go sideways after a good run, there is an inclination to keep winning at the same level, so you take suboptimal trades as opposed to letting the market come to you. It is best to sharply reduce your trading activity when you are not in a flow state.

The third part is the repair, and it is the same sequence Berry describes with the three Cs. Thankfully the 2022 drawdown came after he was already up a lot for the year, so it was not as bad as it would have been without healthy profits. After his losses became large enough, he decided to take his size way down until he could regain his consistency. Eventually a great trade came along and he made money on it. That got his mindset back in the right place, and he started bringing his size up again.

Schwager’s reading of the same period, in his closing note, is that Sharkness’s worst trading year was to some extent a consequence of taking suboptimal trades in a low-opportunity year, influenced by his attempt to maintain the excellent performance of the two prior years. That is an argument against monetary goals, not against his method. Our piece on managing drawdowns professionally covers the mechanics of the size-down and size-back-up.

The evolution: fundamentals, catalysts and longer holds

Not all of his trading is fast now. He sometimes buys stocks and holds them for extended periods, but only ones he thinks could double or triple. He does not want to hold a stock that is going to make 15% a year, and the stocks with the most upside potential tend to be small and midcap names.

His example is Liquidia Corp (LQDA), a biotech developing a hypertension drug and one of two players in the field, whose competitor was doing everything possible to prevent it coming to market. He started reading about it, including research written by lawyers who understood the situation, and it became a story he really liked. He is constantly scanning social media for things that catch his eye.

The shift to fundamentals also started after the Kershner merger. He had been telling older traders that he did not want or need to know anything about a stock except its price; they helped him understand the importance of fundamentals in identifying catalysts. As his account grew he had to extend his holding period, which made fundamentals more important. He began working with an analyst who specialises in identifying earnings inflection points. His approach eventually evolved into a combination of fundamentals, price action and sentiment.

What qualifies as a catalyst is deliberately broad: a developer conference, a secondary offering, an earnings release.

His example of a catalyst-driven trade is the 2025 tariff announcement, which he says provided some of the best trading opportunities of that year because it sparked widespread panic. Everyone thought the world was going into a depression. On studying the situation it became apparent there were many unknowns, and meanwhile many stocks that were not impacted by tariffs had also sold off substantially, which provided a great buying opportunity. He classifies it as arguably a sentiment-driven technical trade with news as the initial catalyst.

He also runs his own account alongside the firm’s, and the difference tells you something about prop structures. In his own account he focuses on longer-term trading and investing, and will sometimes go naked short options, which is prohibited in the firm account. In the firm account he primarily day trades, because that is where his attention is focused and his hands are on the keys as he goes through the charts. He might go a week without trading his personal account.

Getting approval for longer holds required an email explaining what he wanted to do and why. The firm frowned upon it, but he explained that he thought holding positions longer was the next stage of his trading evolution, and pointed out that if you look at the traders who make the most money in the industry, they are not day trading. He got approval, though his size restrictions on longer-term holdings are much tighter. He is likely one of the few traders the firm will allow to hold longer-term positions at all, which he takes as a reflection of the success he has achieved.

Four environments, and one rule about breakouts

He now generates trading ideas off longer timeframe charts, such as hourly or daily, but the 1-minute chart is his primary chart for trade execution. If he likes a price area on the hourly chart, he will drill down to a 1-minute chart to start stalking an entry. He is always blending multiple timeframes. His buying power averages around $20 million, and if he wants more and is not in a significant drawdown, they will usually give him more.

On patterns, his answer is that everything works sometimes and nothing works all the time. He thinks pattern reliability depends on the current market environment, and part of his job is to figure out what environment they are in. He names four: trending, range-bound, overbought and oversold.

The one hard rule he gives is about breakouts. Waiting for a pullback after a breakout has never been his approach: if a breakout is valid it should go right away. If a market pulls back once after a breakout, that is fine. If it pulls back twice, he does not want to hold a large position. If it pulls back three times, it is best to get out. When trading breakouts he wants to be in the money right away.

He is candid that he no longer monitors the performance of all his strategies as systematically as he should. Early on he was more diligent about collecting data on his trades and reviewing it holistically, and it is something that would likely benefit him now. But his priorities have changed: he prioritises a more balanced life with an increased focus on family, and understands his performance might not be quite as good as a result. He calls it a worthwhile tradeoff. He still looks at where he made and lost money, every day, but he was much more systematic about it in his early days.

Collaboration, mentoring and who actually makes it

He believes a collaborative environment is essential, and his argument is about bandwidth rather than generosity. He has a team of five or six traders he is training. He helps them and they also help him. Having more eyes on the market is critical because no one person can see everything. One person only has so much bandwidth. Having a group that can collectively process and share ideas, catalysts and news is very helpful, and the same applies across teams at the firm: a macro specialist might share information that helps him consider how macro factors are impacting his trading, or a team specialising in gene therapy might bring a catalyst to his attention. It is tough, he says, to be a lone wolf in trading.

His mentoring style changed when it stopped scaling. When he started mentoring eight or nine years ago, he instructed each trader on what they should and should not do. With so many people coming and going, that level of individual guidance became unproductive. Now he places everyone in a collaborative group and tells them what he is doing and the rationale behind his trades, giving them as much or as little access to him as they want. It is more about creating the right environment and making himself available as a resource. While he structures a collaborative group, he encourages everyone to think for themselves. And yes, his mentees suggest improvements he takes: one trainee asked why he did not add to a position at a certain point, which would have increased his profit.

On who succeeds and who fails, he thinks almost anyone could become a profitable trader with enough time and work, but many people get complacent. Many profitable but not exceptional traders do not push themselves outside their comfort zone. Most top traders he knows are competitive and growth-oriented, but also possess a humility that allows them to be repeatedly wrong and still maintain their confidence.

He offers two cultural observations that are unusual in a trading interview. He believes many of the problems behind the high failure rate stem from Western cultural norms: Western education emphasises not making mistakes and being right all the time, and Western students are not taught to think in probabilistic terms and make decisions accordingly. And he notes that many successful traders are former gamers who look at the market and speculation as a game, more focused on winning the game than the money that results from winning. Schwager remarks that he does not recall gaming coming up in any previous Market Wizards interview, yet in this book it has been mentioned as a positive influence in multiple interviews.

On whether anyone can achieve Market Wizard status, he generally agrees that only a small subset can. His analogy is the NBA: if you are 7 feet tall you have a one-in-five chance of getting in; if you are 6 feet tall your odds are probably one in 10,000. Due to biology, nature, nurture or some combination, some individuals are naturally inclined towards a particular endeavour. In trading he thinks it relates to the way highly successful traders perceive the world and how they process information.

What he would tell someone starting today

Asked the Barry Ritholtz question, what he wishes he had known when he started, his answer is: everything. He came to trading with the absolute right attitude, knowing he was going to suck at the beginning, that he had to work on his psychology, and that he wanted to trade small so he did not trade himself into a financial hole. He knew that from the Market Wizards series, which framed his expectations and actions. Although he did not blow up, he still had some uncomfortable losses early, but he knew those were going to be part of the process.

Pressed for the specifics, two things. He wishes he had known how much the best traders were making, which would have helped him set loftier goals once he got over the hump of finding consistency. It took him a while to scale his size, and it was seeing other traders after the merger that pushed him to scale up. And he wishes he had known that longer-term trading offered the most potential for larger profits; it would have been beneficial to think in more big-picture terms and incorporate longer-term charts from the outset, instead of focusing on micro price action.

His advice list is short and unglamorous. Take it slow: trading is a marathon, not a sprint. Approach trading with a realistic attitude, because you are going to suck in the beginning, and embrace it. Make sure you have a true edge, and prove to yourself that you can consistently make money before you increase your trading size. A good place to find an edge is a mentor who can articulate what they do, but you need one whose trading style aligns with your personality: your style needs to be consistent with who you are, and you should not try to be something you are not. Look at your trading statistics and learn from your results. Do the work. Try to make a little progress every day, because it will compound over time.

And the timeline, which is the part Coyle disputes: in his experience, people who go on to achieve significant trading success tend to develop some key insights within about a year. If you are not consistently making money within a year, or at least making progress toward profitability, you may want to reevaluate your situation.

What Coyle and Schwager conclude

Coyle takes issue with the one-year assessment, and the disagreement is useful. He calls it a more severe assessment than most prior Market Wizards have offered on the same question. Jason Berry, who has trained over 200 traders, says it may now take two to three years for a new hire to start generating real revenue. Peter Brandt, in Unknown Market Wizards, said that if you are going to become a successful trader you have to count on taking at least five years, and if you are not willing to devote five years you might as well forget it. Multiple Market Wizards, including some interviewed in this book, experienced two or three years of failure before finding their path to enormous success. Aspiring traders, he concludes, should not necessarily abandon hope if they have not reached net profitability within a year.

He raises a second point that is worth chasing. He can think of many traders who said they found a higher level of success by extending their holding periods, as Sharkness did, and cannot think of any who said the opposite. Despite that consistent reality, prop trading firms mostly adhere to a rule that their traders need to be out of their positions by the end of the day, and he wonders why.

His third point ties Sharkness to Phil Goedeker. Both traders’ performance was highly dependent on the market providing opportunities, and only a small percentage of days in the year provided the bulk of their profits. In years such as 2020 and 2021 the markets were particularly favourable; trying to maintain the same level of performance in 2022, when markets were unfavourable for his strategies, led to the worst results in Sharkness’s career by a wide margin. Traders need to fully embrace the concept that you can only control how you respond to what the market offers. You cannot create opportunities where none exist. Be aggressive when the market is favourable to your approach, and simply seek to survive when it is not.

Coyle then quotes Nassim Taleb on a commonality among successful traders being an obsession with survival, and says his own research reached the same conclusion: great traders focus on defense more than offense. That leads to what he calls perhaps the most important point in the chapter, and we will give it in full weight rather than paraphrase it away. Sharkness experienced a loss when he made the cardinal sin of adding to a losing position in KBIO. If you only take one point away from this book, Coyle says, make it this one: cut your losses. Do not argue, do not rationalise, do not hope; just get out.

He closes on limiting beliefs, using Roger Bannister and the sub-four-minute mile. Once Bannister proved it was possible in 1954, many others soon followed. Sharkness experienced the same effect when SMB merged with Kershner. Until that point he thought matching the $2,000 daily profits of SMB’s top trader was a lofty and admirable goal. After the merger he realised there were traders making $25,000 to $50,000 on some days, which completely altered his beliefs about what was achievable.

Schwager’s note starts where Coyle’s ends, on nature. Sharkness’s innate multitasking ability is a genuine contribution to his success, and Schwager adds a second: from the very beginning, even before he knew anything, Sharkness had a reflexive instinct to get out quickly if a trade did not work right away. He was a born risk manager, and in this respect strikingly similar to Berry.

The other components Schwager identifies are the constant striving to learn what is working for other traders and incorporating that knowledge to create new strategies, which has remained constant throughout his career whether he was a novice or the top trader in his firm; the rigorous journaling of best and worst trades while they are still fresh, with the weekly review and the psychological component; and process goals rather than monetary goals, with the observation that monetary goals can incentivise trading to reach a target even when appropriate opportunities are lacking.

He also makes the sizing point precisely, and it is the structural answer to the question of how a trader running scores of strategies can produce these ratios. Sharkness typically holds multiple positions at once, but there is usually one high-expectation trade that he sizes significantly larger than the others, and those aggressively sized trades account for a large majority of his profits. Using radically different sizing depending on how attractive the trade appears is a theme that recurs multiple times in this volume and in other Market Wizards books. It is the same conclusion Michael Marcus and Ed Thorp arrived at by different routes.

Mind, Method, Money

Sharkness is the clearest case in the book of a trader whose Method is deliberately unstable, and who holds it together with Mind and Money.

The pattern across the cohort is now unmistakable. Berry, Goedeker and Sharkness all arrived at the same reflexive exit independently, before any of them had a method. Our overview of the three pillars explains why the other two pillars cannot compensate when that one is missing.

◆ Further reading

Greatest Traders

Eighty-six lives read through Mind · Method · Money, from Livermore reading a chalkboard in 1892 to the traders still working from those ideas today. Told as they happened, with the losses left in, and every quotation traced to a source.

Read the Book Page →Buy on Amazon →

The counterweight

Four things belong beside the record.

The percentage depends on an assumption. The 62.9% is computed on a nominal starting account value chosen by the authors, because prop firms allocate buying power and risk limits rather than capital. They say as much, and they tested several methods. Read the gain-to-pain and Sortino ratios instead, which are computed from the shape of the monthly return series rather than the base. And note that the 8.8% maximum drawdown excludes a 20% month from his first year.

The strategies in this chapter are largely historical. Order flow was killed by algorithms. Parabolic small-cap shorts were killed by the 2017 collapse in locate availability and the cost of borrow. The index-rebalance trade lost most of its edge as more people worked it out. The IPO trade worked when the IPO market was hot. What transfers is the process of replacing them, not the strategies themselves.

The approach is personality-specific and he says so. Running scores of strategies across multiple timeframes works because he is a natural multitasker, a trait Schwager attributes partly to nature. He also concedes that most of his profits come from five or six days a year, which implies most of his activity is unproductive, and that he is trying to cut his trading in half. A reader who copies the breadth without the underlying trait is copying the expensive part.

The safety net was real. He paid $6,000 for training and lived on an allowance from his parents while he got going. He acknowledges it openly and says he owes them a lot. Ten months to profitability and a $40,000 first profitable year are survivable numbers when someone else is paying the rent.

What actually transfers

Keep a playbook and an anti-playbook. One write-up of the best trade of the day and one of the worst, recorded while they are fresh, reviewed at the end of every week and again monthly. This is the single most copyable thing in the chapter. Our trading journal system gives you a structure for it.

Set process goals, not money goals. A monetary target incentivises trading when the opportunities are not there, which is precisely what produced his worst year. Set goals you control: pause before exiting, reduce over-eagerness, assess whether today is a high-opportunity day for your style.

Size the conviction trade radically larger. He holds many positions but usually one high-expectation trade sized far above the rest, and those trades produce most of his profits. Running ten strategies at uniform size would produce a very different record.

Enter reversals after the turn, not into strength. His parabolic short triggers when the stock breaks below VWAP, not when it is accelerating upward. The wind at his back, with risk points that are easy to identify. Our position sizing guide covers how to size once the risk point is defined.

Never add to a loser. KBIO cost him about $150,000 and he calls it the cardinal sin. Coyle says if you take one point from the whole book, take this one.

Name the environment before you pick the strategy. Trending, range-bound, overbought, oversold. Pattern reliability depends on which one you are in, and part of the job is working that out before deciding what to trade.

When the run ends, cut size until consistency returns. Take size way down, wait for one good trade, get the mindset right, then bring size back up. Expect the largest drawdown to arrive after the strongest run.

Frequently asked questions

Who is Kenny Sharkness?

Kenny Sharkness is the trader profiled in chapter eight of Market Wizards: The Next Generation (2026) by Jack Schwager and George Coyle, under the title “The Only Constant Is Change”. He grew up in Ithaca, New York, paid about $6,000 for SMB Capital’s trader training programme after college, and became one of the top traders at SMB/Kershner by running scores of strategies across multiple timeframes.

What are Kenny Sharkness’s returns?

A compound annual growth rate of 62.9%, roughly five times the S&P 500 over the same period, with a gain-to-pain ratio of 9.0 against 0.8 for the index and an adjusted Sortino ratio of 6.6 against 0.9. Excluding one 20% month in his first year, his maximum drawdown was 8.8%, giving a MAR ratio of 7.2 against 0.5 for the index. Because prop firms allocate buying power rather than capital, the percentages are computed on a nominal starting account value chosen by the authors.

What is Kenny Sharkness’s trading strategy?

There is no single strategy, which is the point of the chapter. He runs scores of strategies across timeframes and matches them to the prevailing market environment, which he classifies as trending, range-bound, overbought or oversold. His best known is the parabolic short: a stock trading more than one average daily true range above VWAP goes on the watchlist, and he shorts when it falls back below VWAP. He generates ideas from hourly and daily charts and executes off the 1-minute chart, and now combines fundamentals, price action and sentiment.

What is a playbook and an anti-playbook?

A playbook is a daily write-up of the best trade of the day, an idea promoted by Mike Bellafiore of SMB Capital. Sharkness also keeps an anti-playbook recording the worst trade each day. Both are written while the trades are fresh, reviewed at the end of every week to identify patterns, and reviewed again monthly. He also logs how his results affect his mood and how that affects subsequent trading.

What was Kenny Sharkness’s worst loss?

His largest single-trade drawdown was an AMC short in 2020, where he was down $3 million the day before the stock topped out, and which he made back the next day as the stock collapsed. The more instructive loss was about $150,000 in KaloBios (KBIO), where Martin Shkreli’s reverse merger plan squeezed a $2 stock upward and Sharkness added to his losing position, which he calls the cardinal sin.

Which Market Wizards book is Kenny Sharkness in?

Market Wizards: The Next Generation (Harriman House, 2026), chapter eight, “The Only Constant Is Change”. The book also profiles Kristjan Kullamägi, Lance Breitstein, Simon Russo, Lukas Fröhlich, Phil Goedeker, Kelvin Chiu and Jason Berry. Our review of the book covers the full cohort.

Sources and further reading

Primary source: Jack D. Schwager and George Coyle, Market Wizards: The Next Generation (Harriman House, 2026), chapter eight, “The Only Constant Is Change”, including the closing notes from both authors. All figures, trades and dates above are drawn from that chapter. Notes explicitly labelled as ours are our own observations, not figures the book publishes. Complete Trader’s Edge has not audited any of the underlying trading statements.

Continue Learning

• Jason Berry: Five Losing Months in Fourteen Years
• Phil Goedeker: $5,000 to $53 Million, and Exactly One Losing Year
• Simon Russo: $40,000 to $500 Million, and the Trades That Nearly Ended It
• Lance Breitstein: $46 Million at Trillium, $71 Million on His Own
• Kelvin Chiu: The Commodities Trader Who Made Asymmetry His Edge
• Market Wizards: The Next Generation Book Review (2026)
• The Psychology of Losing
• Managing Drawdowns Professionally
• Position Sizing: The Most Important Decision in Every Trade
• The Three Pillars: Mind, Method, Money
• The Complete Trader’s Edge – The Book

Keep Reading

The Complete Trader's Edge The full Mind · Method · Money framework. 70 chapters. View on Amazon → Market Mayhem 400 years of bubbles, crashes, and the pattern that keeps repeating. Buy on Amazon → Greatest Companies How the world's greatest companies were built — and what traders learn from them. View on Amazon → Greatest Traders Eighty-six lives that explain the markets — Livermore to Madoff, told with the losses left in. View on Amazon →

Written by

Louw van Riet

Author · Trader · Coach

Louw is the author of The Complete Trader's Edge — a 70-chapter trading framework covering psychology, technical analysis, ICT concepts, and professional risk management. He has spent years studying institutional price action across forex, indices, and crypto, and built this platform to provide the complete, honest trading education he wished existed when he started.

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