"Market Wizards (Jack D. Schwager)" by alifari in Dukascopy Forex Community
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Market Wizards (Jack D. Schwager)


In Market Wizards, Jack D. Schwager interviews a wide range of traders with excellent track records of profitability. In 1992, Schwager followed with New Market Wizards.

The interviews contain facts about the trading careers of the interviewees, their philosophy, and many trading anecdotes.

Irrespective of the trading styles, the analytical methods used, or the markets the Wizards trade certain basic common themes:

  • discipline;
  • capital preservation;
  • risk management;
  • individual responsibility;
  • flexibility.

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Bruce Kovner -- Harvard graduate. Professor in political science at Harvard and the University of Pennsylvania. Currency and futures trader. Market Wizard.

  • A greedy trader always blows out.
  • Risk management is the most important thing to be well understood.
  • First, a loss of money itself slows me down, so I reduce my positions.
  • On risks – I try not to risk more than 1% of my portfolio on any single trade.
  • Undertrade, undertrade, undertrade. Whatever you think your position ought to be, cut it at least in half.
  • Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I’m getting out before I get in. the position size is determined by the stop, and the stop is determined on the technical basis. I always place my stop beyond some technical barrier. Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are will to lose per contract.
  • Stay rational and disciplined under pressure.
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Michael Marcus
-- Started as a commodity research analyst, then became a floor trader, and later worked for Commodities Corporation. Reputed to have turned his initial $30,000 into $80 million. He attributes his success to Ed. Seykota, who taught him how to cut losses, as well as the importance of riding winners. Market Wizard.

  • If you become unsure about a position, and you don’t know what to do, just get out. While you are in, you can’t think. When you get out, then you can think clearly again. Perhaps the most important rule is to hold on to your winners and cut your losers.

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