Trading Insights from the Book ‘Market Wizards’
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‘Market Wizards: Interviews with top traders’ is a classic book on trading written by Jack D. Schwager. It features the trading insights and methodology of some of the successful traders such as Bruce Kovner, Richard Dennis, Paul Tudor Jones, Michel Steinhardt, Ed Seykota, Marty Schwartz etc.
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Here are a few words of wisdom from the book ‘Market Wizards’. Hope it was useful.
Trading Insights From ‘Market Wizards’
“Trading provides one of the last great frontiers of opportunity in our economy. It is one of the very few ways in which an individual can start with a relatively small bankroll and actually become a multimillionaire.”
“If trading is a source of anxiety, fear, frustration, depression, or anger, something is wrong—even if you are successful in a conventional sense.”
“There is no single market secret to discover, no single correct way to trade the markets. Those seeking the one true answer to the markets haven’t even gotten as far as asking the right question, let alone getting the right answer.”
“I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where you buy and sell.”
“You don’t want to have a position before a move has started. You want to wait until the move is already under way before you get into the market.”
“When things go bad, traders shouldn’t stick their head in the sand and just hope it gets better.”
“The worst thing that can happen to you in the markets is being right and still losing money. That’s the danger in buying on rallies and selling on breaks.”
“Letting winners ride is every bit as important as cutting losses short. If you don’t stay with your winners, you are not going to be able to pay for the losers.”
“My goal on Wall Street was never to get rich but to stay in business. There’s a big difference. If you’re out of the business, you can never get rich. That’s why you have to be especially cautious when you’re trading a larger position size.”
“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.”
“If you want to have a better performance than the crowd, you must do things differently from the crowd.”
“I discovered that you can’t train people how to trade by just imparting knowledge. The key to trading success is emotional discipline. Making money has nothing to do with intelligence. “
“Markets tend to overdiscount the uncertainty related to identified risks. Conversely, markets tend to underdiscount risks that have not yet been expressly identified.”
“It’s no longer sufficient to assume that because you trade with the trend, you’ll make money. Of course, you still need to be with the trend, because it puts the percentages in your favor, but you also have to pay a lot more attention to where you’re getting in and out.”
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