“I read a book one day and my whole life was changed.” – Orhan Pamuk
This quote best describes my journey when I stumbled upon Market wizard. As a passionate reader, I mostly come across reference of 2 books in most of the trading books “Market Wizards” and “Reminiscences of a Stock Operator”. That intrigued me to start searching for books. That time Amazon was not prevalent in India but a book shop called Book Zone in Bombay. I went there and like a small kid in candy shop, I bought a few other books along with Market Wizards.
Like any other young trader wanting to learn the art of trading I believed there must be tons of trading strategies that I can implement and start making money. I was disappointed. I went through the chapters and could only find interview after interview and no strategies like Moving averages, Bollinger bands, RSI, nothing of that sort. To be honest, I was unhappy and did not read through and started reading other books with strategies.
I built strategies and started trading. To my surprise I was not making money. The story of making money and loosing it back continued for some time. Then I realized there has to be something other than strategies, money management and psychology. Guess what! all books directed me back to Market Wizards through references.
There are amazing stories here :
- A Trader who, after wiping out several times in his career turned $30K to $80M.
- A Fund Manager who achieved five consecutive triple digit return.
- An Electrical engineer from MIT earned 2,50,000% over sixteen year.
And many more.
The Book has 5 major parts. Mainly interview of traders who trade various asset class and styles like Futures & currencies, Stocks, Mutual fund, Floor Traders and Psychology.
There are amazing stories like a movie. Like, a young Richard Dennis hires traders who knew nothing about trading and groomed them to be the best traders in the industry and named them turtle traders. The legendary trend following trader Ed Seyokta who has amazing sense of building and trading system with discipline. How psychology plays an important role in trading by Van Tharp and many more.
What can you learn from it?
Don’t mistake this as just interviews of the traders. The interviews describe the journey most of the traders goes through. These legendary traders also made the mistake that we often commit like listening to others, taking undue high risk, booking profit early, no method to trade. This also teaches us what does not work in the long run.
You can also learn how they managed risk, how they managed their winning trades, psychology when they were going through drawdowns. As a CMT & trader, I always get questions that which book I should read first and I recommend Market Wizards because once you go through all the interview you will be able to relate to one or the other traders and ultimately that’s your style of trading.
I think Jack Schwager has done phenomenal work of describing the interview process not only about traders but the ambiance where the interview was taken, the office atmosphere, beside trading what all other activities that traders do to balance their trading life. Most importantly the amount of travel he did to conduct these interviews across US leaving the comfort of home is commendable.
You can purchase this book through this link.
That’s it for today.