A Summary of Market Wizards

Paul FennerPersonal Finance

I had an earlier post Curated Interview with Paul Tudor Jones from Curated Alpha.  In the post, the author had referenced the book Market Wizards: Interviews with Top Traders by Jack D. Schwager.  At the end of his book, Mr. Schwager put together a summary of those traits that he thought the most successful market mavens had in common.  I touched on this point in my earlier post where I made the point that there are countless ways to be a successful trader but at the root, the best develop a system that works for them and implements that system with few hiccups.

Below is the excerpt from the book;

There is no holy grail to trading success. The methodologies employed by the “market wizards” cover the entire spectrum from purely technical to purely fundamental – and everything in between. The length of time they typically hold a trade ranges from minutes to years. Although the styles of the traders are very different, many common denominators were evident:

  1. All those interviewed had a driving desire to become successful traders – in many cases, overcoming significant obstacles to reach their goal.
  2. All reflected confidence that they could continue to win over the long run. Almost invariably, they considered their own trading as the best and safest investment for their money.
  3. Each trader had found a methodology that worked for him and remained true to that approach. It is significant that discipline was the word most frequently mentioned.
  4. The top traders take their trading very seriously; most devote a substantial amount of their waking hours to market analysis and trading strategy.
  5. Rigid risk control is one of the key elements in the trading strategy of virtually all those interviewed.
  6. In a variety of ways, many of the traders stressed the importance of having the patience to wait for the right trading opportunity to present itself.
  7. The importance of acting independent of the crowd was a frequently emphasized point.
  8. All the top traders understand that losing is part of the game.
  9. They all love what they are doing.