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42 Ways To Trade Like A Market Wizard

  
  Education
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What if you could read the principles for success for some of the world’s greatest traders? Well you can, here is how author Jack Schwager summed up the the similarities of the ‘Market Wizards’ he spent years interviewing in his second book.

The following is a summarized excerpt from Jack D Schwager’s book, The New Market Wizards. I highly recommend this book for all active traders.

  1. First Things First
    You sure you really want to trade ? It is common for people who think they want to trade to discover that they really don’t.
  2. Examine Your Motives
    Why do you really want to trade ? Did you say excitement ? Then don’t waste your money in market, you might be better off riding a roller coaster or taking up hand gliding.
    The market is a stern master. You need to do almost everything right to win. If parts of you are pulling in opposite directions, the game is lost before you start.
  3. Match The Trading Method To Your Personality
    It is critical to choose a method that is consistent with your your own personality and conflict level.
  4. It Is Absolutely Necessary To Have An Edge
    You cant win without an edge, even with the world’s greatest discipline and money management skills. If you don’t have an edge, all that money management and discipline will do for you is to guarantee that you will gradually bleed to death. Incidentally, if you don’t know what your edge is, you don’t have one.
  5. Derive A Method
    To have an edge, you must have a method. The type of method is not important, but having one is critical-and, of course, the method must have an edge.
  6. Developing A Method Is Hard Work (more…)

Always Be Learning

  
  Education
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When you love to do something, you enjoy learning more and more about it.  Most active traders would rather trade than do just about anything else.  Do we enjoy the learning?  Depends upon how we come upon it.  When something is a core value, our fascination with learning more about it is endless.  You can’t get enough of it.  However, when we learn through painful experience, such as the hard knocks of trading, enough certainly is enough.

Losses are tough.  Errors and mistakes are bothersome.  And, yet there’s almost always a lesson in there if you remain alert to improving.  I’ve always said that mistakes are okay if you acknowledge them and learn from them.  James Joyce said, “Mistakes are portals of discovery.”

As I trade and make mistakes, I say to myself, “I don’t have to do that again.”  And I feel reassured and optimistic about the future. Of course, I do, “do that again”.  We all do.  There are certain default attitudes and positions we naturally fall prey to.  But with an attitude of learning, we do it less and less until we (hopefully) stop repeating the unhelpful thinking and behaving. (more…)

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