In The Little Book of Market Wizards, Jack Schwager seeks to distill what he considers the essential lessons he learned in conducting nearly four dozen interviews with some of the world’s best traders. The book delves into the mindset and processes of highly successful traders, providing insights that all traders should find helpful in improving their trading skills and results.
Over the course of the past 25 years, I have interviewed some of the world’s best traders in a quest to discover what made them so successful—a project chronicled in four Market Wizards books. I sought to answer the question: What differentiates these traders from ordinary market participants? What common traits do they share that might explain their extraordinary success?
The Little Book of Market Wizards is a distillation of the answers to these questions. Essentially, this book provides an overview of some of the major insights garnered across the four Market Wizards books, spanning a quarter century. The Little Book of Market Wizards is not intended as a replacement for the books in the Market Wizard series, but rather as a pithy introduction. I have extracted the lessons that I thought were most important in the interviews conducted for the Market Wizards series. Individual readers, however, are likely to draw their own points of emphasis. This realization has become clear to me over the years when different readers continually mentioned different interviews as their personal favorites. Those who want to go deeper can, of course, follow up with the original interviews in the four Market Wizards books.
Readers with an interest in trading and investing who have not read the Market Wizards books should find this book provides a concentration of valuable trading advice in a concise and accessible format. Former readers of the Market Wizards series, however, should still find this volume useful as a convenient, concise review of the critical trading lessons embedded in the original interviews.
This book is not intended as a how-to on trading, nor is it a book on techniques for making trades. There are no suggestions or recommendations for making a fortune in the markets. Too many aspiring traders look for how-to books for a task that does not lend itself to such a formulaic treatment, while entirely missing the point that there are concepts that are essential to success in trading regardless of the methodology. Readers looking for the secret formula to making easy money in the markets will not find the answer here and are likely to be disappointed—although I would argue that they would likely be disappointed as well with the results of following the prescriptions of books that promise such an outcome. Readers who, instead, seek to build the foundation for potential success in the markets should find the ideas in The Little Book of Market Wizards valuable, if not essential.
Although, ostensibly, this book is about success in trading, in a broader sense, it is about success in general. Readers will find that most of the traits highlighted are equally applicable to success in any endeavor. I recall many years ago, after finishing a talk on the topic of success in trading, I was approached by one of the attendees. He introduced himself and said, “I am a minister, and I was fascinated by how many of the points you made were also critical to my success in building a congregation.” Now, it is hard to get further from trading than the ministry, yet the same key elements seemed to apply. I suspect there are some common principles of success, and I have simply discovered them through the perspective of great traders.
- Failure Is Not Predictive
- What Is Not Important
- Trading Your Own Personality
- The Need for an Edge
- The Importance of Hard Work
- Good Trading Should Be Effortless
- The Worst of Times, the Best of Times
- Risk Management
- Losing Is Part of the Game
- No Loyalty
- Size Matters
- Doing the Uncomfortable Thing
- Emotions and Trading
- Dynamic versus Static Trading
- Market Response
- The Value of Mistakes
- Implementation versus Idea
- Off the Hook
- Love of the Endeavor