Market Wizards Book – What to Learn from it?

Market Wizards book is among the top books related to trading and investing. In fact, it is a one-of-a-kind trading book that reveals the top secrets of remarkable trading success. Yes, 17 highly successful traders and investors share their secrets of success in this book. 

Market Wizards book consists of interviews with 17 highly successful traders and investors. Yes, it is a remarkable book and enlightens your trading path. So, what do you learn from it? Let’s dive deep to find out.

Market Wizards book – introduction

Jack D. Schwager is the author of the widely popular book Market Wizards. He has written several other financial books. Schwager himself is a highly successful as well as recognized futures and hedge funds expert. Now, his trading knowledge and his writing skills combine to make Market Wizards book one of the best-ever trading books.

Market Wizards book consists of interviews with market wizards who made millions. Yes, it is true as the book tells true success stories of super-star traders like Marty Schwartz, Ed Seykota, Michel Steinhardt, Paul Tudor Jones, Tom Baldwin, Richard Dennis, and Bruce Kovner. How did these guys amass fortunes? Were they magicians or masters of occult knowledge? Or were they just lucky winners who won lotteries? The answers to these questions are there in the Market Wizards book.

What to learn from the Market Wizards book?

Market Wizards book is a unique book in the sense that it is a source of remarkable information about trading and investing. It tells you the secrets of top traders who made millions of dollars. Additionally, Market Wizards book is a source of inspiration and it will inspire you beyond any stretch of your imagination. Here are some key lessons you should learn from the Market Wizards book. 

1. Risk Management and Cutting Losses Short

Proper risk management and cutting your losses short is a very important lesson you learn from the Market Wizards book. All wizards emphasize protecting your capital and getting out of a trade as early as possible that goes against you.

“If I have positions going against me, I get right out; if they are going for me, I keep them… Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in.” – Paul Tudor Jones

“Don’t focus on making money; focus on protecting what you have.” – Paul Tudor Jones

“The elements of good trading are (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.” – Ed Seykota

2. Accept Losses

As a simple rule, if you don’t accept your losses early, they will grow bigger. In other words, not accepting losses means you are allowing losses to grow bigger and get out of control. Traders lose huge amounts of money when they don’t accept losses earlier when a trade goes against them. 

“Learn to take losses. The most important thing in making money is not letting your losses get out of hand.” – Marty Schwartz

3. Making trading mistakes 

Another vital lesson that you learn from the Market Wizards book is that there is nothing wrong with making mistakes. Making mistakes regularly leads you to huge success in the end. 

“[Michael Marcus – another top trader] taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.” – Bruce Kovner

4. Investment psychology and trading discipline 

The book also teaches us that investment psychology and trading discipline are more important elements. You cannot hit success without working on your investment psychology and trading discipline. 

“I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where you buy and sell.” – Tom Basso

“The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliche, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.” – Victor Sperando

“[Following a loss] I was not going to quit. I was determined to come back and fight. I decided that I was going to become very disciplined and businesslike about my trading.” – Paul Tudor Jones

5. Being adaptable

Market wizards agree on the fact that being flexible and adaptable in your trading system and strategies is critical. They insist that you cannot gain from the constantly changing market conditions by being static and rigid. 

“Yes, you have to adapt. You need to change your method of buying and selling, because the market is continually changing in subtle ways.” – Tom Baldwin

6. Your own strategy and system

Market Wizards book also teaches us to develop customized training systems. If you don’t do this, you cannot expect to gain anything from financial markets. 

“More money is lost listening to brokers than any other way. Trading requires intense personal involvement. You have to do your own homework” – Michael Marcus

7. Emotional discipline

As you know, emotional involvement in trading leads you to make biased decisions. The market doesn’t behave in the way you expect it to behave. It has its own way and you have to follow it. That suggests that you cannot let your emotions be involved in your trading. Conversely, making informed trading decisions is the key to successful trading. 

“I discovered that you can’t train people how to trade by just imparting knowledge. The key to trading success is emotional discipline. Making money has nothing to do with intelligence. Think of all the bright people that choose careers on Wall Street. If intelligence were the key, there would be a lot more people making money trading.” – Jack D. Schwager,