Market Wizards

by Jack D. Schwager (Goodreads Author)

Omar Halabieh's review Jul 24, 2011

As the title indicates this book consists of a series of interviews with

some of the best most successful traders in the world.

Not only does this book cover a wide variety of trading techniques, it
also covers a wide variety of markets as well (treasuries, futures,
commodities etc.). The book also sheds light on the personal traits
and characteristics of successful traders. By reading the different
interviews one starts to see the commonalities but also the
differentiators between them. It is very intriguing to read one very
successful trader present opposite techniques than the next trader
being interviewed.

A must read for any serious investor. This book is filled with wisdom
from start to finish – for both novice and advanced traders. One will
also find that much of this wisdom applies to any career.

Below are excerpts from this book that I found particularly insightful:

1- “You also have to follow your own light. Because I have so many
friends who are talented traders, I often have to remind myself that if
I try to trade their way, or on their ideas, I am going to lose. Every
trader has strengths and weaknesses…As long as you stick to your
own style, you get the good and bad in your own approach. When you
try to incorporate someone else’s style, you often wind up with the
worst of both styles. I’ve done that a lot.”

2- “Don’t ever feel that you are very good. The second you do, you are
dead.”

3- “What are the traits of a successful trader? The most important is

discipline – I am sure everyone tells you that. Second, you have to
have patience; if you have a good trade on, you have to be able to stay
with it. Third, you need courage to go into the market, and courage
comes from adequate capitalization. Fourth, you must have a
willingness to lose; that is also related to adequate capitalization.
Fifth, you need a strong desire to win.”

4- “I have two basic rules about winning in trading as well as in life:

(1) If you don’t bet, you can’t win. (2) If you lose all your chips, you
can’t bet.”

5- “The stock market is neither efficient nor random. It is not efficient

because there are too many poorly conceived opinions; it is not
random because strong investor emotions can create trends.”
6- “I don’t see how you can invest in American steel without
understanding what is going on in Malaysian palm oil. As I explained
before, it is all part of a big, three-dimensional puzzle that is always
changing.”

7- “Although the styles of the traders are very different, many

common denominators were evident:

1- All those interviewed has a driving desire to become successful

traders – in many cases, overcoming significant obstacles to reach
their goals.

2- All reflected confidence that they could continue to win over the
long run. Almost invariably, they considered their own trading as the
best and safest investment for their money.

3- Each trader had found a methodology that worked for him and
remained true to that approach. It is significant that discipline was
the word most frequently mentioned.

4- The top traders take their trading very seriously; most devote a
substantial amount of their waking hours to market analysis and
trading strategy.

5- Rigid risk control is one of the key elements in the trading strategy
of virtually all those interviewed.

6- In a variety of ways, many of the traders stressed the importance

of having the patience to wait for the right trading opportunity to
present itself.

7- The importance of acting independent of the crowd was a

frequently emphasized point.

8- All top traders understand that losing is part of the game.

9- They all love what they are doing.”