August 9, 2022

McKenzielee Blog

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Market Wizards by Jack D Schwager, Bruce Kovner, Richard Dennis, Paul Tudor Jones, Michael Steinhardt, Ed Seykota, Marty Schwartz, Tom Baldwin

11 min read
Contents About the Author Good insight, even for experienced traders High Probability Trading Strategies The...

If you are like most traders, you probably overlook or misunderstand mental and emotional obstacles. While many trading psychology books offer sound advice, they don’t show you how to do the necessary work. That’s why you haven’t solved the problems hurting your performance. With straight talk and practical solutions, Jared Tendler brings a new voice to trading psychology.

market wizards series

There were times where the information was a bit over my head, being a beginning trader, but that did not discourage me. I would rather have it that way, than the other. Also, this book I am pretty sure was not the “updated” version, which showed every once in a while, but don’t let that dissuade you from listening. It was a book of interviews, and I feel I learned a few things from each one. Whether you’re bearish or bullish, with a large portfolio or a limited budget, there’s the perfect audiobook in our store that will provide the perspectives and lessons you need to challenge yourself and grow.

Though again, an interesting observation made by all of these quants is that they had to adjust significantly their expectations that formalism would extract significant dividends in terms of predicting/modeling real-life behavior. In effect, their technical training was valuable, but only indirectly. In the case of Mark/Joe Ritchie, they weren’t even formally trained, yet they apparently developed one of the most sophisticated options trading systems to that date, what they did have was a “technical intuition” . Re-read of the second book in the Market Wizards series.

I went into the terminal, angry that the small prop plane had left without us before the scheduled time. I don’t get it, I said to the woman at the airline counter, all prepared to be the aggrieved customer. We’ll still make it, I assured my wife, but we won’t have much extra time. She seemed skeptical—irrationally so, I thought. We pulled into the airport entrance only ten minutes before flight time. Even though the parking lot was only a stone’s throw from the terminal, I dropped Jo Ann at the entrance, saying, Let them know we’re here.

About the Author

Drawing together the common threads throughout is where the utility lies. I liked Gil Blake style of trading too, as he says, a critical ingredient to be a good trader is to have a maverick mind, a blend between an artistic side and a scientific side. Another good interview is one by Stanley Druckenmiller and how he said that Soros didn’t care if he wins or loses, because he is confident that he would be able to win on other trades. Also, Soros traded very big and would get angry at his traders that are doing fine and happy with small positions, not wanting them to take profits yet, but to ride them. Another fine book, which I enjoy reading, and usually comes with useful stuff for your trading. The clear standout is the interview with Stanley Druckenmiller.

He wanted to be an artist or a writer; he became a trader. Though he valued academics and disdained the financial world, the markets became his profession. He once hated trading so much that he awoke feeling that he couldn’t do it for another day and quit his job that morning; several years later, the markets were his endeavor and passion. His initial forays into stock trading were marked by such ineptitude that he nearly went bankrupt, yet he subsequently became so skilled that he more than doubled his money annually. The information the traders use in generating forecasts depends on the trading style.

I probably didn’t have a single account or trade for eight months. When you were cold-calling, I guess a lot of people just hung up on you. Before you got that job nibble, I imagine this must have been the low point of your life.

Good insight, even for experienced traders

They’re not impressed if you’re from New York, L.A., or London. It’s not a transient city like New York or L.A., where it is okay to come from other cities and get a job. People want to see that you have lived in the area for a while. Now I really appreciate that image manipulation aspect of the city, but at the time it was very frustrating. At the time, Wood Gundy was trying to become a major dealer in the U.S. bond market, and they had brought in a bunch of hired-gun traders. These guys were just blowing up left, right, and center.

market wizards series

In contrast with the first two Market Wizard books, which included traders from a broad financial spectrum—stocks, bonds, currencies and futures—this volume will focus on traders in the stockmarket. Unknown Market Wizards continues in the three-decade tradition of the hugely popular Market Wizards series, interviewing exceptionally successful traders to learn how they achieved their extraordinary performance results. The twist in Unknown Market Wizards is that the featured traders are individuals trading their own accounts. Despite their anonymity, these traders have achieved performance records that rival, if not surpass, the best professional managers. In Economics from Brooklyn College and an M.A.

I recall thinking the “Hedge Fund” text was challenging in this regard. That being said, Schager does organize his interviews by theme, so that confusion may come from the lack of work I’ve had in the industry. This book is a little dated these days, but the interviews are fantastic. I didn’t use it as a how to guide for trading. However, the insight into the great traders interviewed is invaluable.

Their take on price efficiency is that if the market moves against you, then you were wrong. Markets are efficient at telling you that your views are wrong. And, they believe, you will be wrong a lot. Anyone who is starting out with trading should take the time and read this book.

High Probability Trading Strategies

I left because I found out through the grapevine that I was about to be transferred to Toronto. At that point, I loved living in New York, and I had also just met my wife-to-be and didn’t want to leave her. Therefore, I took a job at the New York branch of another Canadian company, Wood Gundy. One attraction of the new job was that they offered to get me a green card; I had been in the United States on a temporary visa.

He succeeded in getting three-quarters of the herd to migrate; the remainder died or dispersed. His trek permanently changed the migration patterns for Siberian reindeer. The portion of the herd that survived flourished in northern Quebec, and he became a local hero.

The New Market Wizards : Conversations with America’s Top Traders

The Wood Gundy equity desk was another version of New York verbal abuse. Once again, I found myself at a job where the guys on the desk were constantly yelling at me. It was just regular day-to-day business, but I hated it. When I looked across the room to the bond trading desk, I noticed that everyone was very quiet. They weren’t shouting at each other; they were very civil. I got permission to switch to the bond trading desk.

I was certainly happy to get away from the verbal abuse. Also, the bond desk was very exciting because it traded huge position sizes compared with the equity desk. I liked the idea that I could make or lose five times as much as twenty people combined on the equity desk. But I didn’t like being responsible for trading all sorts of illiquid issues, most of which were overseas bonds.

The book contains a series of interviews with top traders in the markets and it neatly describes their thought processes in a series of questions relevant to that trader. The author mentions interviews with great and successful traders from the 80s and early 90s. When I was about 25 years old, at the time of great inflation in Mexico, I was a successful investor in the Mexican stock market, increasing my investment 5 times in 9 months. But as always when things are done unconsciously city index advantage web and without knowing, in 1987, in the stock market crash in October, I lost everything I gained. This is the fourth time that I’ve read this book and I will say that all of the necessary disciplines for trading are withing it and each time I read it they sink a little deeper into my subconscious. Given the incredible explosion in volatility Mr. Market displayed in 2008 it is especially prescient to revisit the basic principles of what makes active investing a superior approach.

Algorithmic Trading

Entertaining, informative, and invaluable, The New Market Wizards is destined to become another Schwager classic. Asking questions that listeners with an interest or involvement in the financial markets would love to pose to the financial superstars, Jack D. Schwager encourages these financial wizards to share their insights. Regardless of one’s investment style or market focus, this book provides much to learn. It details many variations regarding which markets to trade in, what time frame to incorporate, and how to use information.

It is a revered work among many speculators. If you like books and love to build cool products, we may be looking for you. At the end the book brings 42 rules that I think you have to read and reread carefully to make the reading day trading forex worthwhile. Memories of those when trading was done by phone, contracts had to be signed at the brokerage houses, checks were collected when necessary. MUST read for anyone that is interested in trading of the financial world.

Schwager’s interviews reveal that successful trading is consistent with the findings of formal research on decision making and behavioral finance. Commonalities can be found among the wizards’ frameworks for forecasting and determining odds, managing trade and portfolio risks, and focusing behavior through psychological discipline. Every trader interviewed has a method for measuring the return to risk of each trade. They all generate expected payoffs and develop scenarios for both upside and downside outcomes. Forecasting skill is honed not only through forming expectations for fair value in prices but also through focusing on forecast precision.

We decided to delay looking for new jobs so that we could take six months to travel across the United States, going from ski resort to ski resort. It was at that point, after three years, that I really started to burn out. I went as long as I did because it was exciting having the responsibility of trading that much money. One time, over drinks with my boss, I said, We’re not really trading these bonds; we’re really investing, just like one of our accounts.

Schwager continues where he left off interviewing top investors covering different investment styles. The big one in this book is Stanley Druckenmiller–one of the very few best investors of all time who managed George Soros’s Quantum Fund for many years. It’s OK to interview a bunch of really successful people and then say what they all have in common. There’s a whole aisle of business books that do exactly that, with dreadful names like “The Top 10 Secrets of Highly Successful People”.

I had put my life savings into the down payment for the house, so we hardly had any money left. Initially we weren’t worried because we thought we would get jobs in a month or two. Month after month went by, however, and neither one of us got a job offer. I started drinking cheap beer and sleeping late. But at that point in my life, I think I was bailed out because there was a major bull market in bonds, and my instincts were apparently good enough to keep me off the short side for the most part. In my best year, I made about $700,000 for the desk, which is really nothing, considering it has to be split among so many different people.

The Reality Slap: How to survive and thrive when life hits hard

Quantitative traders estimate expected returns and well-defined odds of success on the basis of historical relationships. Short-term traders measure flow and sentiment to determine price behavior. Longer-term traders, who are often theme based, try to set bounds on risk in an uncertain world through economic logic and scenario analysis. Schwager manages to tease out how each trader goes about these complex tasks in many different markets. This audiobook provides fascinating insights into the hedge fund traders who consistently outperform the markets, in their own words.

All rank assiduous research, self-confidence, a specific plan and the courage to cut losses among essentials to success. Few consider their work gambling, but Schwager entertainingly argues that a successful trader needs many of the qualities of a good poker player. Though the subject matter is esoteric, there is much here to attract the general reader, and Schwager appends a primer of technical basics. Though the subject matter is esoteric, there is much here to attract the general reader, and Schwager appends a “primer” of technical basics.

Jack manages to identify and home in on common mistakes every trader makes. I really enjoyed the layout of the book and how the author revisited important points that each trader makes and speaks of his own trading experiences. I have heard from so many traders that this is an absolute must read and can only repeat that statement! Completely timeless information, very good tips, interesting personal stories… Schwagers most recent buck unknown market wizards is more relevant with twice as much useful info. As a professional trader, I have read many books on the subject.

Are they masters of an occult knowledge, lucky winners in a random market lottery, natural-born virtuosi—Mozarts of the markets? In search of an answer, bestselling author Jack D. Schwager interviewed dozens of top traders across most financial markets. A minor flaw with Schwager’s approach is that it focuses on the individual and misses the institutionalization of hedge fund traders into money management firms. We learn little about how these individuals manage investment teams; in this book, the individual is still king.

Let us know what’s wrong with this preview of Trading with the Market Wizards by Jack D. Schwager.

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