107 of 109 people found the following review helpful
on July 21, 2003
I'm the Market Strategist for a NYC Investment Bank (billions under management). Someone gave me this book when I first got into the industry a decade ago; I find myself rereading it every 5 years.
I highly recommend it to anyone who is involved in the markets. Simply stated, this is THE book for anyone who wants to learn about trading or investing -- It is simply a must read.
What's so utterly compelling about the interviews is how consistent the themes are that arise from so many different traders; This is true regardless of the markets they work in (commodities, equities, currencies, bonds) or the style they employ (technical, macro-economic, fundamental, quantitative).
The basic concepts revealed by the Wizards are Discipline, Capital Preservation, Risk Management, Individual Responsibility, Flexibility, Intellectual Honesty and Consistency. Please note that these ideas have nothing to do with coming across a hot tip, or getting a big IPO allocation, or chasing the "darling of the day." It's especially relevant, given some of the speculative excesses of the most recent (March '03) rally.
This book should cause all investors, both novice and experienced, to step back and consider their strategies and methodologies. These are much more important than finding the next "flavor of the month." This is especially true now that a new group of stock pickers have been inundating the airwaves.
95 of 103 people found the following review helpful
"Market Wizards" was the first of 3 Market Wizards books in which Jack Schwager interviews top traders in the financial markets about their backgrounds, experiences, and techniques. Published in 1989, the interviews in this book were conducted while the stock market crash of October 1987 was fresh in people's minds, which I found added some interest. Some of those interviewed made money on the crash, some lost money, and many have something to say about it. The book is divided into 5 sections, each containing a series of interviews. Jack Schwager introduces each interview by telling us a little about the trader, then we get an edited transcript of the interview, followed by a brief summary of that trader's philosophy. The information the traders provide about their techniques is enough to give a general impression of what they do, not enough to tip their hand, but is outdated in today's market anyway.
Perhaps because Jack Schwager was a commodities analyst, the first and largest section, "Futures and Currencies", is dedicated to commodities traders. Jack Schwager provides brief explanations of the futures and currency markets, then moves on to interviews of 7 commodities traders. Interview subjects include the great Michael Marcus, who multiplied his company account 2500-fold in a decade, and his protégé Bruce Kovner, perhaps the world's largest currency and futures trader at the time. Larry Hite tells some great stories about what not to do when playing the markets. Part 2, "Mostly Stocks", features interviews with 4 traders of stocks or index futures, including William O'Neil, his protégé David Ryan, and the man who won big several times in the U.S. Trading Championships, S&P futures trader Marty Schwartz. Part 3, "A Little Bit of Everything", includes Mark Weinstein and Quantum Fund co-founder James B. Rogers, Jr. Part 4, "The View from the Floor", interviews 3 traders who trade in the pits.
Part 5, "The Psychology of Trading", features an interview with Dr. Van K. Tharp, a research psychologist who studied "the psychology of winning" so as to come up with a "model" of winning traits which can then be taught to other people. He's a flake, in my view, who bases his practice on various "beliefs", but his "super-trader" classes probably provided him a nice income. Explanations of program trading, portfolio insurance, and options, which are referred to in several of the interviews, are provided in Appendixes in the back of the book. There is also a glossary of terms. "Market Wizards" is often touted as being superior to Schwager's latest Wizard book, 2001's "Stock Market Wizards", but I don't think it is. The names in this one are bigger, the information more vague, but "Market Wizards" has added historical interest at this point, since most of these people traded in the 1970s, when markets were more predictable, adapted to rapid change and increased competition in the 1980s, and then traded through the crash of 1987.
72 of 77 people found the following review helpful
on March 12, 2000
You read this book not to learn technical patterns or techniques that work. Actually, many of the traders interviewed have opposing views on some techniques. Some say one method won't work and another trader in the book uses that method and is making a killing.
No, you read this book to realize several things about yourself. If you want to make a success, you will have to work at it and stay committed. There is no way around it. Sometimes things will be difficult. Learn from your mistakes and learn that your biggest enemies are emotions and, in some cases, lack of knowledge. One common trait I see in this book is that the traders make it perfectly clear they have self-discipline. Some techniques are common between the traders, and they involve controlling their emotions after bad streaks or winning streaks.
29 of 33 people found the following review helpful
on January 26, 2005
You have studied chart patterns as well as technical and fundamental analysis. You have built and tested hundreds of trading systems. You have read and re-read every issue of your favorite trading magazine. You actively trade. However, you still feel that you are missing something important that will help you improve your game. Then perhaps it is time to round out your trading education by reading Market Wizards and learning from some of the world's greatest traders.
This book examines a side of trading rarely addressed: the human side. In it some of the world's greatest traders and investors respond candidly to questions regarding their experiences growing up, how they became involved in trading, how they honed their skills and developed as traders, their trading experiences, philosophies and styles, and even some of the considerations that go into their daily selection of trades. A wide variety of personalities and trading methods are represented; whether you scalp the e-minis on Globex or leisurely trade stocks on the NYSE, you will find something of value. This book should be especially valuable to anyone who aspires to trading success but lacks a trading mentor.
Break away from your TradeStation or C-Trader, put on a pot of coffee, and read this book. It will expand your mind regarding the markets and improve your trading immeasureably. I have read it several times, and continue to learn from it. Highly recommended.
Jeffrey Owen Katz, Ph.D.
Author: "The Encyclopedia of Trading Strategies" (McGraw Hill, 2000)
13 of 13 people found the following review helpful
on November 24, 2007
Were this book not a bit dated at 20 years old it would earn five stars (obviously this is not its own fault). Since its publication, we've seen plenty of new markets (say, dot-com) and added plenty of new tools (say, instantaneous trading over the internet). However, you're getting a collection of interviews from some phenomenal traders. There are two things to get this book for:
1. The traders' stories. You get the benefits of their experience without actually having to spent the time and money on having the experiences. See how they live their lives and how quickly money can be made or lost.
2. How the traders are saying the same thing. They're showing us that certain principles (of, say, risk management) are universal, but there are so many ways to make money that you need to figure out what you're good at and just do that well.
The text is edited well and everything is easy to read. There is a helpful glossary, and the interviews are short enough that you can do one interview per sitting if you want to read this casually.
19 of 21 people found the following review helpful
on November 27, 2005
There are 1000's of trading books available. They can be divided into four categories: books about trading written by non traders (most are in this category; don't waste your time or money on them), books about traders written by non traders (most are worthless), books about trading written by traders, and books about traders written by traders. This book is the best book available in the latter category. If you need a book about technical indicators, this isn't it. If you need a book to get a glimpse at the thought processes of successful traders, this is it. Jack has the remarkable ability to ask relevant and productive questions of some of the most successful traders of our time.
18 of 20 people found the following review helpful
on December 16, 2001
I first read this book in 1991 and I was so pumped up that I read it again a year later. The tales of these professionals kept me riveted and the relaxed, conversational style of the book makes it an easy read. I learned several of my most hard-and-fast disciplines from this book ("cut your losses, let your winners run", "know your 'uncle' point", "have patience to wait for the right trade to come along"). Favorite interviews were Michael Marcus, Paul Tudor Jones, Ed Seykota, Larry Hite, William O'Neil and Jim Rogers. Surprisingly, what you gather from the compilation of interviews is that despite a focus on different investment time horizons or securities, there are common keys to success across most of these guys, many of whom achieved legendary status. I came away from this book realizing that you must take these well-established rules and apply them in a disciplined fashion to your personal investment style. You will not be good at all things (stocks, options, commodities, shorting, etc.). So, find what your personal strength is and apply these disciplines to achieve success. I still make investing mistakes (believe me!). But I've made a lot fewer of them because of the lessons I learned from this book. Three other points:
1) This book turned me on to Reminiscences of a Stock Operator, my all-time favorite book about the markets (check it out in Amazon).
2) The book is a bit dated, so some of the people (e.g., Robert Prechter) and newsletters (e.g., Zweig Letter) referenced by the interviewees are no longer around or have lost status.
3) The New Market Wizards falls short of the standard set by this book, but the sequel is still probably worth reading.
11 of 11 people found the following review helpful
on January 13, 2005
All losers want to lose and all winners who fall short of their goals are fulfilling some inner need for a constrained threshold of success...
This book is the Bible of trading, speculating and investing. After all, if you strongly wish to become a better market professional or dramatically improve your trading results, who'd better teach you about the market than the best of the best?
There are many pearls of wisdom in this book, like risk management, money management, losing being part of the game, the driving desire to become a successful trader, having confidence, taking trading very seriously, etc, etc. The part I liked the most was the one about finding a methodology that works for the individual and remaining true to that approach. One of the traders who offered trading courses failed a student simply because to the question "If you are convinced about taking a position in the market, do you still take it if you find out that I (I being the trader offering the trading courses) have already taken a completely contrarian position?", he answered "No"!
If you want to become a successful trader and you think that reading a dozen books about the market is the way to start, than this book HAS to be one of them.
10 of 10 people found the following review helpful
on July 14, 1999
This book perhaps is the sequel of Reminiscence of A Stock Operator by Edwin Lefevre. The difference is that this book is more actual & comprehensive (because a lot of modern top traders are involved). Although there is no secret tehcnique in order to predict the price, the wisdom it contains is the primary factor, preceeding the technique itself (in my opinion). Of course, in modern trading we need them both, but I believe that to be mentally ready for trading is more important than the knowledge about the techniques of trading (charts, calculations...etc). For any beginner, I highly recommend this book to be readed first before make any movement in the market (learn from the expert rather than your own experience when you get wiped out!).
15 of 17 people found the following review helpful
on October 24, 2000
I liked Market Wizards the first time I read it. I read it a second time to figure out what I needed to do to become a successful trader. Other than reading about trader after trader blowing out big time at least once in their life before hitting the road to success, I found the book enjoyable. The only real drawback is that it is low on actual usable strategies. I mean, what I'm looking for is some idea of what these trading gurus are doing to make all their money. The Best: Conversations with Top Traders, does a good job of presenting more winning strategies to accompany their backstories. Don't get me wrong though, when it comes down to good old-fashioned stories of rags-to-riches success and kernels of wisdom, Market Wizards is the hands down best.