Market Wizards: Interviews with Top Traders » (Reissue)

Jack Schwager is a managing director and principal of The Fortune Group, an alternative asset management firm regulated in the UK and the United States. Schwager is the Senior Portfolio manager for Fortune's Market Wizards Funds of Funds, a broadly diversified series of institutional hedge fund portfolios. He also serves on the board of Fortune's research affiliate Global Fund Analysis, a leading source of independent hedge fund research. His prior experience includes 22 years as the director of futures research for some of Wall Street's leading firms and 10 years as the co-principal of a commodity trading advisory firm.

Mr. Schwager is perhaps best known as the author of the best-selling Market Wizards (1989), and the equally popular The New Market Wizards (1992). A third volume in this series, Stock Market Wizards, published by HarperCollins, was released in early 2001. Mr. Schwager's first book, A Complete Guide to the Futures Markets, which was published in 1984, is considered to be one of the classic reference works in the field. More than a decade later he revised and expanded this original work into the three-volume series, Schwager on Futures, consisting of the following titles: Fundamental Analysis (1995), Technical Analysis (1996), and Managed Trading: Myths and Truths (1996). He is also the author of Getting Started in Technical Analysis (1999), which is part of John Wiley's popular "Getting Started" series.

Mr. Schwager is a frequent seminar speaker and has lectured on a range of analytical topics with particular focus on the characteristics of great traders, hedge fund investment, performance measurement, technical analysis, and trading system evaluation. He holds a B.A. in Economics from Brooklyn College and an M.A. in Economics from Brown University.

How do some of the world's most successful traders amass millions of dollars in a year--or sometime sin hours? Are they masters of a priceless wizardry or simply the very lucky winners in a random market lottery that allows only a few players to become fantastically wealthy? What are the secrets of their unheard-of successes?

After interviewing top traders in a variety of markets, market expert Jack D. Schwager concludes that while method undoubtedly accounts largely for trading success, no one approach is used by all, or even most, of the traders interviewed. Some are technicians, monitoring price action. Others are fundamentalists, trying to forecast future price levels based on what they know of a market, an industry, or a company. Some act largely on personal initiative and intuition, while still others rely completely on automated systems.
Even more interesting in Schwager's finding that, as great a role as method plays, it must be accompanied by the "proper" mental posture--a notion that surfaces frequently in the interviews. The secret seems to have more to do with personal attitude than with approach. What mental disciplines, what emotional responses, what intangible personal ingredients make these tip traders so mysteriously effective? What enables them to work financial magic while so many others walk away losers?

Market Wizards allows the reader to delve into the minds of these professional traders. It explains the very elements of their success...different approaches used in different markets, trading rules that each of them adhere to...personal advice for other traders.

Understand what it takes to become a successful trader. Hear it in the very words of the Market Wizards.

Martin W. Zweig

One of the most fascinating books ever written about Wall Street.

Preface, ix
Prologue, xiii
My own story, xv
Part 1: Futures and Currencies
Taking the mystery our of futures, 3
The interbank currency market defined, 7
Michael Marcus: Blighting never strikes twice, 9
Bruce Kovner: The world trader, 51
Richard Dennis: A legend retires, 85
Paul Tudor Jones: The art of aggressive trading, 117
Gary Bielfeldt: Yes, they do trade T-bonds in Peoria, 141
Ed Seykota: Everybody gets what they want, 151
Larry Hite: Respecting Risk, 175
Part 2: Mostly Stocks
Michael Steinhardt: The concept of variant perception, 193
William O'Neil: The art of stock selection, 219
David Ryan: Stock investment as a treasure hunt, 237
Marty Schwartz: Champion trader, 257
Part 3: A Little Bit of Everything
James B. Rogers, Jr.: Buying value and selling hysteria, 283
Mark Weinstein: High-percentage trader, 321
Part 4: The View From the Floor
Brian Gelber: Broker turned trader, 345
Tom Baldwin: The fearless pit trader, 367
Tony Saliba: "One lot" triumphs, 387
Part 5: The Psychology of Trading
Dr. Van K. Tharp: The psychology of trading, 411
The trade: A personal experience, 431
Postscript: Dreams and trading, 437
Final Word, 439
Appendix1: Program trading and portfolio Insurance, 441
Appendix 2: Options—understanding the basics, 443
Glossary, 447