Market Wizards – Interviews With Top Traders Review – Jack Schwager

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    Market Wizards – Interviews With Top Traders – Jack Schwager

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    Market Wizards

    About The Author

    Jack D Schwager is a managing director and principal of The Fortune Group, an alternative asset management specialist regulated in the UK and the United States. Schwager is the Senior Portfolio Manager for Fortunes Market Wizards Funds of Funds, a broadly diversified series of institutional hedge fund portfolios. He also serves on the Board of Fortunes’ research affiliate Global Fund Analysis, a leading source of independent hedge fund research.

    On The Cover

    “Market Wizards is one of the most fascinating books ever written about Wall Street” – Martin W Zweig, Ph.D. Editor The Zweig Forecast.

    How do some of the world’s most successful traders amass millions of dollars in a year – or sometimes in hours? What are the secrets of their astounding success?

    These are some of the extraordinary personalities interviewed by Jack Schwager:

    Michael Marcus, who turned a $30,000 account into $80 million.

    Michael Steinhardt, whose fund has averaged a 30% annual return over a 21 year period!

    Tom Baldwin, who left a managerial job at a meat packing plant with $25,000 in hand and now trades up to $2 billion worth of T-bond futures in a day.

    Paul Tudor Jones, whose funds have registered triple digit gains five years in a row!

    Ed Seykota, who realised an astounding 250,000 per cent return on his accounts over 16 years!

    “It’s difficult enough to develop a method that works. It then takes experience to believe what your method is telling you. But the toughest task of all is turning analysis into money. If you don’t believe it try it. These guys have it all: a method, the conviction and the discipline to act decisively time after time, regardless of distractions and pressures. They are the heroes of Wall Street and Jack Schwager’s book brings their characters vividly to life.” Robert R. Prechter, Jr., Editor, The Elliott Wave Theorist.

    Review

    This is one of those books that every trader from novice to professional should have on their bookshelves. Although the subject matter was written in the 1980’s it is still as relevant today as it was at that time. The focus in on American traders using various types of futures instruments that were undergoing rapid development in those years. But don’t let that put you off. For the beginner it is an easy to read set of interviews that contain entertaining anecdotes, and an introduction to the basic set of standard rules that every successful trader requires.

    The interviews are structured in a way that takes you through each traders development. First outlining how they originally entered the game and then progressing through their early years as well as where they ended up. In this manner Schwager teases out the lessons learnt along the path to eventual success. Because of this each interview flows in such a way that it’s hard to put down once you get stuck into it. It is interesting to note that for most great traders early failure is more the rule than the exception.

    The more you read the book the more you can pick up from it, as the interviews expose the key traits and techniques that every successful trader needs to develop. The most powerful element of the book is the fact that most of these are similar across all of the interviews. Every one of these traders had developed an approach that has a consistent set of characteristics.

    The common themes that each of these top traders developed include the following:

    • They all had a consistent drive to become successful traders that they have pursued through many adverse moments;
    • They have all overcome the psychological barriers to successful trading;
    • The all are religious about money and risk management – with many of them having learnt those lessons the hard way;
    • They have all developed their own types of systems controlled by rigid rule sets;

    Because of all of the above they all developed a supreme confidence that enabled them to succeed where the majority failed.

    The above list goes a long way to explaining why these people became successful at their chosen game. It also explains why most new traders don’t make it past the first hurdle, very often because they aren’t around long enough to develop such disciplines.

    This book continues to deliver and I would thoroughly recommend re-reading it at various times during ones trading education. The more you know, the more you can get out of it. It is interesting that all of these traders discuss issues that anyone who has ever tried their hand at trading will be familiar with or will have encountered at some time or other. As the book also covers how they overcame these issues there is an abundance of good advice to be heeded and digested. From the excellent rules outlined by Paul Tudor Jones to the startling conclusions of the Ed Seykota interview this book provides a bedrock of valuable information for all traders, novice and experienced alike.

    To conclude I’d like to quote a famous passage from the book that has gone down in trading folk-law and Schwagers response to it. It comes from the interview with Ed Seykota.

    Jack Schwagers Comments on Ed Seykota Interview.

    “Don’t be fooled by the humour in Seykota’s comments: there is a great deal of serious wisdom in his pithy replies. For me personally, the most striking comment was “Everyone gets what they want out of the market.” When Seykota first made this remark, I thought he was merely being cute. But I soon realised he was deadly serious. My reflective response to the premise was disbelief: It implies that all losers want to lose and all winners who fall short of their goals (like myself) are fulfilling some inner need for a constrained threshold of success – a difficult proposition to swallow. Although my rigidly logical mind would normally dismiss the idea, my respect for Seykotas knowledge about markets and people forces me to consider the potential truth of the statement that everybody gets what they want out of the market – a most provocative concept.”

    If you haven’t yet read this book yet I believe that when you do, you won’t regret it.

    You can buy this and many other Trading related books at the Systems For Traders Bookshop

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