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18 Insights From the New Market Wizards Book

06.08.2021Books

The New Market Wizards

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Market Wizards and New Market Wizards are the best books on the planet for anyone who ever wanted to trade. They explain, in the trader’s own words, how they had to overcome family problems, trading losses, bad markets, slippage, and emotional breakdowns to get to the level of success we now know them for. No one is immune from trading losses – it’s the tuition you have to pay early on to learn to be a trader. Asking questions that listeners with an interest or involvement in the financial markets would love to pose to the financial superstars, Jack D. Schwager encourages these financial wizards to share their insights. The go-to guide for launching a lucrative career in trading – fully updated for today’s turbulent markets. One of today’s most successful traders, John F. Carter has made his popular guide more relevant and effective than ever.

One trader focuses on market response to news events, another calculates mathematical probabilities–one even cocks an ear to the noise level on the exchange floor. All rank assiduous research, self-confidence, a specific plan and the courage to cut losses among essentials to success. Few consider their work gambling, but Schwager entertainingly argues that a successful trader needs many of the qualities of a good poker player. Though the subject matter is esoteric, there is much here to attract the general reader, and Schwager appends a primer of technical basics. Though the subject matter is esoteric, there is much here to attract the general reader, and Schwager appends a “primer” of technical basics. Though the subject matter is esoteric, there is much here to attract the general reader, and Schwager appends a “primer” of technical basics.

Jack Schwager’s deep knowledge of the markets and his extensive network of personal contacts throughout the industry have set him apart as the definitive market chronicler of our age. Schwager is the Senior Portfolio manager for Fortune’s Market Wizards Funds of Funds, a broadly diversified series of institutional hedge fund portfolios.

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This action also violated my strong belief that it is unwise to be swayed by other people’s opinions in trading. These errors were quickly followed by ignoring some screaming market clues to liquidate the position. Finally, by surrendering the decision process of the trade to another party, I had no method for risk control. Let me be absolutely clear that the point is not that I followed bad advice and lost money, but rather that the market is a stern enforcer that unmercifully and unfailingly extracts harsh fines for all transgressions. The fault for the losses was totally my own, not Harvey’s . This particular trade provides a good illustration of one of the principles that emerged from my interviews for Market Wizards. Patience was an element that a number of the supertraders stressed as being critical to success.

This volume is even better than the previous volume, and I am of the opinion that this series should be read by active traders in any market. When I was about 25 years old, at the time of great inflation in Mexico, I was a successful investor in the Mexican stock market, increasing my investment 5 times in 9 months. But as always when things are done unconsciously and without knowing, in 1987, in the stock market crash in October, I lost everything I gained. Another great read for any trader who is interested in the views of some of the greatest traders there are/have been. This was a follow up to the first book and takes place about 3-4 years later. He does a good job of referencing back to the first book rather than repeat any information and as a result I find it a great compliment to the previous material. This is the fourth time that I’ve read this book and I will say that all of the necessary disciplines for trading are withing it and each time I read it they sink a little deeper into my subconscious.

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The one thing I learned from this book is the importance of making your own investing principles, that fit your character, and then stick to those principles through thick and thin. You are likely to lose more than you earn during the learning period, but when you get hang of it, you may find a reliable pattern for growing your investments. It was a great life experience that I don’t think I have recovered from yet, in the sense of never seeing investing again as something that I can have fun with and make money on. But I learned a lot about how to handle and behave in a catastrophic situation of the magnitude that I suffered.

Also, the book is kind of dated, and many if not most of these traders started trading in the pits. My guess is that trading in the pits is a very, very different activity than sitting alone in a study and staring at a computer screen. A great expose detailing the varied character, technique and thought processes of successful traders. It is very possible that I will run back through this book at some point but first I have a bunch of other books to enjoy from Jack. What differentiates the highly successful market practitioners – the Market Wizards – from ordinary traders? What lessons can the average trader learn from those who achieved superior returns for decades while still maintaining strict risk control?

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I really can’t overstate just how good the Market Wizards books are. Timeless advice from all time great traders, brought out through Schwager’s meticulous research and eye for applicable lessons. The book was okay if you’re interested in various and vastly different philosophies of option traders.

After this one-time step, periodicals will be automatically sent to your NOOK account when you select “Send to NOOK.” If this is your first time selecting “Send to NOOK,” you will then be taken to a Barnes & Noble page to sign into your NOOK account. There have been too many titles checked out and returned by your account within a short period of time.

After the first few hours, we started to connect better and Lipschutz began relating specific stories regarding his trading experiences. These make up the core of the following interview.

Although the market was in a virtual free-fall, Lipschutz felt the sell-off was overdone and interrupted our interview to call in some orders. I’m just trying to buy twenty [$20 million Australian, that is]. Immediately afterward, the Australian dollar started to trade higher and continued to move up throughout the rest of the evening. Lipschutz didn’t get a fill, however, because he had entered his order at a limit price just a hair below where the market was trading, and the market never traded lower. Missing an opportunity is as bad as being on the wrong side of a trade, he said.

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Although filled with insights that even professional traders will find valuable, Schwager’s text remains entire accessible to the general reader. Jack Schwager is a recognized industry expert in futures and hedge funds and the author of a number of widely acclaimed financial books. He is currently the co-portfolio manager for the ADM Investor Services Diversified Strategies Fund, a portfolio of futures and FX managed accounts. Previously, Mr. Schwager was a partner in the Fortune Group, a London-based hedge fund advisory firm, which specialized in creating customized hedge fund portfolios for institutional clients. His prior experience includes 22 years as Director of Futures research for some of Wall Street’s leading firms and 10 years as the co-principal of a CTA. The traders he is interviewing provide you with great tips and methods of trading by explaining their trading experiences.

Earn money by sharing your favorite books through our Affiliate program. Some traders seemed to have made it because of luck; their methods should not be passed off as advice. Some interviews are interesting, but not the majority. Content is very dated; most of the interviewees made money when most people literally did not understand how to price options, and “fast execution” was measured in multiple seconds. MUST read for anyone that is interested in trading of the financial world.

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Again, the charts are a very unemotional way to view a stock’s behavior and potential. I want to make sure I get off the horse if it starts heading in the wrong direction. Most people believe high turnover is risky, but I think just the opposite. High turnover reduces risk when it’s the result of taking a series of small losses in order to avoid larger losses.

In search of an answer, bestselling author Jack D. Schwager interviewed dozens of top traders across most financial markets. This book gives very helpful insight about the approach followed by the successful traders. Although none of the traders trading methods are disclosed, but their approach towards money management, emotional handling of win/loss and trade management is quiet helpful. The book follows Jack on his interview’s, with some of the best top traders of the 1980s. Is covered and the book engages you through the entire work. Great way to acquire some rules and get an idea of what trading is like to some degree.

The light of the setting sun is streaming into the trading room, and John Gutfreund and I are nearly the only two people left. But that whole trading approach actually fit very well with my own tape-reading type of experience. My wife and I met while I was attending Cornell. She’s very aggressive and has a very strong economics background. The previous summer she had managed to get a job working for Dr. Henry Kaufman [a world-renowned economist] in the bond research department.

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It wasn’t that I got less interested in architecture, I just became a lot more interested in trading. Our interviews were conducted after U.S. market hours, but, since the currency markets never close, Lipschutz, apparently, never stops trading. However, despite his admitted obsession with the markets and trading, Lipschutz appeared very relaxed. I wouldn’t even have known that he was watching the markets had he not occasionally made references to price movements and placed orders over the phone. I had first contacted Bill Lipschutz through a public relations agent, Tom Walek. Yes, a public relations agent for a trader sounds rather odd. In fact, this is particularly true for Lipschutz, who had managed quite deliberately to maintain virtually total public anonymity for his entire career despite his huge trades.

James Rogers said it perhaps most colorfully, I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. In essence, by not wanting to trade, I had inadvertently transformed myself into a master of patience. By forcing myself to wait until there was a trade that appeared so compelling that I could not stand the thought of not taking it, I had vastly improved the odds.

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In dealing with Hussein, such an ambivalent policy was almost tantamount to offering to lay out a red carpet for Iraq’s tanks. I was eager to speak to Ed so that I could relay my trading experiences and glean the benefits of his insights. Unfortunately, at every break during the seminar, each of us was surrounded by attendees asking questions.

So I said , OK Harvey, I’ll follow you on this trade. But I must tell you that from past experience I’ve found listening to other opinions disastrous. If I get in on your opinion, I’ll have no basis for deciding when to get out of the trade. So understand that my plan is to follow you all the way. I’ll get out when you get out, and you need to let me know when you change your opinion. I went short at the market about a half-hour before the close and then watched as prices continued to edge higher, with the pound closing near its high for the week.

After this sharp break, in the most recent week, the pound had settled into a narrow, sideways pattern. In my experience, this type of combined price action often leads to another price decline. Markets will often do whatever confounds the most traders. In this type of situation, many traders who have been long realize they have been wrong and are reconciled to liquidating a bad position—not right away, of course, but on the first rebound. Other traders who have been waiting to go short realize that the train may have left without them. They too are waiting for any minor rebound as an opportunity to sell.