The New Market Wizards: Conversations with America's Top Traders

Along with its prequel, "The New Market Wizards" is not just a book featuring top traders and their killer strategies that brought about their raging success. The two are no less self-help books giving the much needed pointers to anyone who wants to become a better trader as it repeatedly dissects what constitutes fatal emotional pitfalls and helps readers achieve an acute state of naked realization and, perhaps taken to the extreme, self-actualization. This observation is best captured in Jack Schwager's closing interview with Dr. Van K. Tharp in "Market Wizards": "When people approach the markets, they bring their personal problems with them". For fundamentalists, "Market Wizards" is the more appropriate book to peruse. My favorite section in the book is "A Little Bit of Everything" where views of long-term investors are discussed at length. The longest write-ups in part one of the series, perhaps purposely so, are also the most useful as interviewees proffered their tricks of their trades with great candor - Michael Marcus (42 pages), James Rogers (38), Bruce Kovner (34), Michael Steinhardt (26). Other concise but equally useful comments were aired by David Ryan (20 - and check out the wealth of investment/trading books mentioned in the interview) and William O'Neill (18). "The New Market Wizards" is in broad terms a general rehash of ideas propounded in the first book, except that it was more geared toward trading styles than investment techniques, plus the myriad traders highlighted were newer to the game at the penning of the book and in this sense their views less impressive/thought-provoking compared to its prequel where the most legendary / creme de la creme were handpicked to go into the definitive book. Consequently, I find myself picking up appreciably less useful ideas from the second book than I did from the first, albeit Jeff Yass's "The Mathematics Of Strategy" was a refreshing read. As a summary of Schwager's two extraordinary books on top traders, here's my take on the most important elements that contribute to trading success: (1) Stringent Risk Control (2) Hard Work & Tenacity (3) Know Thyself: Identifying Areas Of Competence & Weakness (4) Know Thy Investment As Crap Begets Crap (5) Open-mindedness To New Ideas & Unexplored Angles (6) Willingness To Acknowledge Defeat & Change Tack When Proven Wrong (7) Resilience, Courage & Conviction When Markets Go Against You In The Short-Term (8) Humility To Accept That 'The Market Is Always Right' (9) Patience To Let Profit Run But Resolution To Run When Proven Wrong (10) Discipline: Setting Exit & Entry Points/Targets (11) Defensive/Offensive Behavior: 'Preserving Equity First, Making Money Second' (12) Fire To Succeed: Total Involvement, Not Haphazard Approach As a humble contribution, I would like to add two cents as to what defines sound trading mindset: (a) Investment Is Counter-Intuitive: Obvious Bets Rarely Make Good Investments and vice versa.

This is the BEST of the 3 volume series. This book was absolutely outstanding and worth not only buying but keeping. I did not like volume #1 at all; there was really nothing in that & I doubted whether the traders interviewed had anything of value to give the reader. This book though is of a much higher quality as it delves more into Trading Systems & their psychology than previously.A key thing you will learn from these interviews is best exemplified by Mike Carr a Turtle: Don't care what the market will do, Care what you will do when the market does it.The gem in this series is Warren Eckhardt. In the first book the Ritchie Dennis & Will O'Neil interviews were the real gems. The others in vol#1 were totally without value including the GREAT Ed Seykota who is just a wise-acre with flippant answers and a juvenile sense of humour. Here in volume 2 even minor traders have more to say, perhaps Jack got better in getting information out of them?Anyhow, remember more than HALF of these people have since gone the way of Livermore and blown up and those that haven't are RETIRED and teach at high costs.

Some readers comment that "The new" is not as good as the old. I strongly disagree with that. Schwager had tried to get the rest of the best in the market at the time to be interviewed and written about, like Vic Sperando, Stanley Druckenmiller, Richard Driehaus and some other big names. The problem is: the "stars" in the first book are just too bright, amongst all else, Paul Tudor Jones and Richard Dennis. Perhaps Schwager should have got Soros to meet the market expectation. BTW, two more tips: First, buy and read the Market Wizards before this. Second, dont get too carried away by the rosy pictures posed by these top traders and dont copy a bit from each of them. Know yourself and develop the trading strategy that fits you most unless you want to be those footstool of these wizards.

This follow up to his best seller "Market Wizards" includes many more insights into many more of America's best Futures and Stock traders. Through candid interviews these self-made mulit-millionaires explain the discipline and strategies involved in trying to wrestle with the financial bull that comprise our capital markets. We novices who have ever dreamed about becoming a full time investor or just wanted to know how these financial wizards do it, have in this book further proof that fortunes can be made given enough discipline, patience, and sheer stamina. Each interviewee explains how they place trades, what they look for, and when they exit. The 4 tenets that come up over and over again is: 1) Follow the Trend 2) Cut your losses short 3) Let your profits run 4) Manage risk. One thing each professional points out is the sheer naivette of the inexperienced trader or investor who comes into the tumultuous financial jungle expecting to make 50 to 100% a year. They are undercapitalized and inexperienced but most importantly do not know themselves. This is a fantastic book if you want to know how the best of the best tackle our financial markets