Market Wizards Quotes

“Actually, the best traders have no ego.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“Another way to determine the direction of the general market is to focus on how the leading stocks are performing. If the stocks that have been leading the bull market start breaking down, that is a major sign the market has topped. Another important factor to watch is the Federal Reserve discount rate. Usually, after the Fed raises the rate two or three times, the market runs into trouble.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“hold on to your winners and cut your losers.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“If you don’t stay with your winners, you are not going to be able to pay for the losers.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“It is impossible to consistently outperform the market by using any information that the market already knows.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“I feel my success comes from my love of the markets. I am not a casual trader. It is my life. I have a passion for trading. It is not merely a hobby or even a career choice for me. There is no question that this is what I am supposed to do with my life.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“When I see a picture like the 1861 cotton market, I ask myself, “What caused that? Why did that happen?” Then I try to figure it out. From that, you learn an enormous amount. In”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“traders shouldn’t stick their heads in the sand and just hope it gets better.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“Can you give me an example of how the lack of real world experience would hurt the researcher?”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“I figured out that for every dollar I made trading, 30 percent was going to the government, 30 percent was going to support my planes, and 20 percent was going to support my real estate. So I finally decided to sell everything.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“One of my rules was to get out when the volatility and the momentum became absolutely insane.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“Charting is a little like surfing. You don’t have to know a lot about the physics of tides, resonance, and fluid dynamics in order to catch a good wave. You just have to be able to sense when it’s happening and then have the drive to act at the right time.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“Kovner lists risk management as the key to successful trading; he always decides on an exit point before he puts on a trade. He also stresses the need for evaluating risk on a portfolio basis rather than viewing the risk of each trade independently. This is absolutely critical when one holds positions that are highly correlated, since the overall portfolio risk is likely to be much greater than the trader realizes.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“Undertrade, undertrade, undertrade is my second piece of advice. Whatever you think your position ought to be, cut it at least in half. My experience with novice traders is that they trade three to five times too big.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“What can a losing trader do to transform himself into a winning trader? A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to transform himself. That’s the kind of thing winning traders do.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“Excessive worrying about taxes usually leads to unsound investments in the hope of achieving a tax shelter.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“I am always thinking about losing money as opposed to making money.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“Those who want to win and lack skill can get someone with skill to help them. I”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“One of the jobs of a good trader is to imagine alternative scenarios. I try to form many different mental pictures of what the world should be like and wait for one of them to be confirmed. You keep trying them on one at a time. Inevitably, most of these pictures will turn out to be wrong—that is, only a few elements of the picture may prove correct. But then, all of a sudden, you will find that in one picture, nine out of ten elements click. That scenario then becomes your image of the world reality.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“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.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“Almost anybody can make up a list of rules that are 80 percent as good as what we taught our people. What they couldn’t do is give them the confidence to stick to those rules even when things are going bad.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“Absolutely. I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“there is probably no class of trades with a higher failure rate than impulsive (not to be confused with intuitive) trades.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“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 willing to lose per contract. If the meaningful stop point implies an uncomfortably large loss per contract, trade a smaller number of contracts.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“I would say that risk management is the most important thing to be well understood.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“Unlike some other gurus, he doesn’t believe he is predicting the future; he is simply observing what is happening and making rational bets.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“Whenever I enter a position, I have a predetermined stop.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“You have to be willing to make mistakes regularly; there is nothing wrong with it.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“The first rule of trading—there are probably many first rules—is don’t get caught in a situation in which you can lose a great deal of money for reasons you don’t understand.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders

“So you like seeing a high EPS with a low P/E. Yes. That’s the best combination. I am sure there is a way of combining the two on a computer and coming up with a very good system.”
― Jack D. Schwager, Market Wizards: Interviews with Top Traders