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The Little Book of Market Wizards: Lessons from the Greatest Traders

Book Description

An accessible look at the art of investing and how to adopt the practices of top professionals

What differentiates the highly successful market practitioners—the Market Wizards—from ordinary traders? What traits do they share? What lessons can the average trader learn from those who achieved superior returns for decades while still maintaining strict risk control? Jack Schwager has spent the past 25 years interviewing the market legends in search of the answers—a quest chronicled in four prior Market Wizards volumes totaling nearly 2,000 pages.

In The Little Book of Market Wizards, Jack Schwager seeks to distill what he considers the essential lessons he learned in conducting nearly four dozen interviews with some of the world's best traders. The book delves into the mindset and processes of highly successful traders, providing insights that all traders should find helpful in improving their trading skills and results.

  • Each chapter focuses on a specific theme essential to market success

  • Describes how all market participants can benefit by incorporating the related traits, behaviors, and philosophies of the Market Wizards in their own trading

  • Filled with compelling anecdotes that bring the trading messages to life, and direct quotes from the market greats that resonate with the wisdom born of experience and skill

  • Stepping clearly outside the narrow confines of most investment books, The Little Book of Market Wizards focuses on the value of understanding one's self within the context of successful investing.

    Table of Contents

    1. Cover
    2. Contents
    3. Title
    4. Copyright
    5. Dedication
    6. Foreword
    7. Preface
    8. Chapter One: Failure Is Not Predictive
      1. The Story of Bob Gibson
      2. If at First You Fail
      3. “One-Lot” Persists
      4. Two Key Lessons
    9. Chapter Two: What Is Not Important
      1. Jim Rogers
      2. Marty Schwartz
      3. Reconciling the Divergent Views
    10. Chapter Three: Trading Your Own Personality
      1. Paul Tudor Jones
      2. Gil Blake
      3. Comparing Jones and Blake
      4. Personality and Trading Systems
    11. Chapter Four: The Need for an Edge
      1. Money Management Is Not Enough
      2. An Edge Is Not Enough
    12. Chapter Five: The Importance of Hard Work
      1. David Shaw
      2. John Bender
      3. The Paradox
    13. Chapter Six: Good Trading Should Be Effortless
      1. Zen and the Art of Trading
    14. Chapter Seven: The Worst of Times, the Best of Times
      1. When Everything Is Going Wrong
      2. When Everything Is Great
    15. Chapter Eight: Risk Management
      1. Uncle Point and Kovner’s Dictum
      2. How Not to Place Your Stops
      3. An Option to Stops
      4. Risk Management at the Portfolio Level
      5. Quick Exits When Wrong
      6. The Trader’s Dilemma
      7. Underappreciated Reason for Avoiding Large Losses
      8. It’s Not Rocket Science
    16. Chapter Nine: Discipline
      1. McKay’s Lapse of Discipline
    17. Chapter Ten: Independence
      1. A Personal Story
    18. Chapter Eleven: Confidence
    19. Chapter Twelve: Losing Is Part of the Game
      1. The Link between Confidence and Taking Losses
      2. The Rationalization of a Losing Trader
      3. The Four Types of Trades
      4. Willing to Lose
    20. Chapter Thirteen: Patience
      1. Century-Old Wisdom
      2. A Master of Patience
      3. The Power of Doing Nothing
      4. The Wisdom of Sitting
    21. Chapter Fourteen: No Loyalty
      1. “The Market Was Telling Me I Was Wrong”
      2. Jones Reverses Course
      3. Caught by a Surprise
      4. Surviving the Worst Trading Blunder Ever
      5. A Bad Idea Transformed
      6. Don’t Publicize Your Market Calls
    22. Chapter Fifteen: Size Matters
      1. The Power of Bet Size
      2. The Danger of Size
      3. Stepping on the Accelerator
      4. Volatility and Trading Size
      5. Correlation and Trading Size
    23. Chapter Sixteen: Doing the Uncomfortable Thing
      1. The Outperforming Monkey
      2. The Inadvertent Experiment
      3. Behavioral Economics and Trading
      4. Why Emotions Affect Even Computerized Trading
      5. Conclusion
    24. Chapter Seventeen: Emotions and Trading
      1. Expensive Excitement
      2. You Can’t Win If You Have to Win
      3. Impulsive Trades
      4. Don’t Confuse Intuition with Impulse
    25. Chapter Eighteen: Dynamic versus Static Trading
      1. The Need to Adapt
      2. Scaling versus Single-Price Entry and Exit
      3. Trading around Positions
    26. Chapter Nineteen: Market Response
      1. Gold and the First Iraq War
      2. McKay Gets Interested in Stocks
      3. Dalio Is Surprised
      4. A Most Bullish Report
      5. Druckenmiller Is on the Wrong Side of the Market
      6. The Invincible Position
      7. The Submerged Volleyball
      8. Buy the Strongest, Sell the Weakest
      9. Correlation as a Clue
    27. Chapter Twenty: The Value of Mistakes
      1. Analyzing Your Trades
      2. The Trader’s Log
    28. Chapter Twenty-One: Implementation versus Idea
      1. A Post-Bubble Trade
      2. A Better Option
    29. Chapter Twenty-Two: Off the Hook
      1. A Unique Observation
      2. On the Hook
      3. Schwartz Saves Me Money
    30. Chapter Twenty-Three: Love of the Endeavor
    31. Appendix
    32. About the Author