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

by Jack D. Schwager

Are traders like Raschke confident because they succeed, or do they succeed because they are confident? Probably a little bit of both. However, the key point is that exuberant confidence appears to be one of the essential elements in exceptional achievement as a trader, and I assume in many other endeavors as well. Occasionally, an interview provokes me to reassess my view of reality. I have long assumed that markets might be predictable over the long term but that short-term price movements are largely random. Raschke holds exactly the opposite point of view. She believes that in the markets, much as in weather forecasting, short-term predictions can be quite accurate but long-term forecasting is a virtual impossibility. With her ability to see patterns that others don’t, she has been able to trade short-term price swings with a consistency that would defy the laws of probability, if indeed there were no patterns in these movements. Raschke has made me a believer. Clearly, there are predictable movements in price even over periods as short as a few days or a single day.