I just watched a video lecture by Jack Swager, author of trading classics Market Wizards and The New Market Wizards. If you haven’t heard of them, in each book Schwager interviews top traders and picks their brains about trading, the markets, and what made them successful.
The reasons these works are revered as classics is not because he gets the Market Wizards to reveal their “magic” strategies. In fact not one says explicitly how to profit trading and they all have different methods. What we do get is insight into what makes them tick. See below for a partial list of traders mentioned in the video. Its a very accomplished group.
In the lecture, Schwager pulls together the common traits of these elite traders and distills them into critical success factors. All are important ingredients for success. The one I want to highlight as critical is Schwager saying that none of the wizards would do something like “la-de-da today looks good to buy bonds”. They all had some sort of pre-planned strategy, that strategy gave them an edge in the market, and they knew what to do with it. Schwager also pointed out that by entering the market without a plan, the amateur trader can do worse than chance.
Schwager touches upon the paradox that trading seems easy yet requires a tremendous amount of work to master – I can definitely relate!
The video (and the books) are somewhat dated. I doubt the traders Schwager mentions are today getting chart books delivered to their homes on the weekends. These days, the web and services like Market Club offer charts on about every market that moves so we can all pour over thousands of charts like the masters. Or, we can program our computers to scan for us. Schwager’s comments on computerized trading is another area that is outdated.
Even so, many of the traits and behavioral patterns that made these traders great can offer us timeless lessons towards success. Here’s who I heard Schwager cite as Market Wizards: Jim Rogers, William O’Neil, Ed Seykota, Michael Marcus, Marty Schwatrz, Paul Tudor Jones, Monroe Trout, Linda Raschke, Van Tharp, William Eckhardt, Stanley Druckenmiller (worked with George Soros).
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