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Market Wizards #5

Unknown Market Wizards: The Best Traders You've Never Heard of

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The Market Wizards are back!



Unknown Market Wizards continues in the three-decade tradition of the hugely popular Market Wizards series, interviewing exceptionally successful traders to learn how they achieved their extraordinary performance results.

The twist in Unknown Market Wizards is that the featured traders are individuals trading their own accounts. They are unknown to the investment world. Despite their anonymity, these traders have achieved performance records that rival, if not surpass, the best professional managers.

Some of the stories include:

- A trader who turned an initial account of $2,500 into $50 million.
- A trader who achieved an average annual return of 337% over a 13-year period.
- A trader who made tens of millions using a unique approach that employed neither fundamental nor technical analysis.
- A former advertising executive who used classical chart analysis to achieve a 58% average annual return over a 27-year trading span.
- A promising junior tennis player in the UK who abandoned his quest for a professional sporting career for trading and generated a nine-year track record with an average annual return just under 300%.

World-renowned author and trading expert Jack D. Schwager is our guide. His trademark knowledgeable and sensitive interview style encourages the Wizards to reveal the fascinating details of their training, experience, tactics, strategies, and their best and worst trades. There are dashes of humour and revelations about the human side of trading throughout.

The result is an engrossing new collection of trading wisdom, brimming with insights that can help all traders improve their outcomes.

376 pages, Hardcover

First published January 1, 2020

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About the author

Jack D. Schwager

25 books629 followers
Jack Schwager is a recognized industry expert in futures and hedge funds and the author of a number of widely acclaimed financial books. He is currently the co-portfolio manager for the ADM Investor Services Diversified Strategies Fund, a portfolio of futures and FX managed accounts. Previously, Mr. Schwager was a partner in the Fortune Group, a London-based hedge fund advisory firm, which specialized in creating customized hedge fund portfolios for institutional clients. His prior experience includes 22 years as Director of Futures research for some of Wall Street’s leading firms and 10 years as the co-principal of a CTA.

Mr. Schwager has written extensively on the futures industry and great traders in all financial markets. He is perhaps best known for his best-selling series of interviews with the greatest hedge fund managers of the last two decades: Market Wizards (1989), The New Market Wizards (1992), and Stock Market Wizards (2001). The latest book in the series, Hedge Fund Market Wizards is due to be released in May 2012. Mr Schwager’s first book, A Complete Guide to the Futures Markets (1984) is considered to be one of the classic reference works in the field. He later revised and expanded this original work into the three-volume series, Schwager on Futures, consisting of Fundamental Analysis (1995), Technical Analysis (1996), and Managed Trading (1996). He is also the author of Getting Started in Technical Analysis (1999), part of John Wiley’s popular Getting Started series.

Mr. Schwager is a frequent seminar speaker and has lectured on a range of analytical topics including the characteristics of great traders, investment fallacies, hedge fund portfolios, managed accounts, technical analysis, and trading system evaluation. He holds a BA in Economics from Brooklyn College (1970) and an MA in Economics from Brown University (1971).

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Displaying 1 - 30 of 108 reviews
Profile Image for Ulio.
49 reviews27 followers
December 13, 2020
This format that Jack has discovered is absolutely brilliant. I wish there were interview books for more industry with the top talent. Wouldn't it be great to read a interview series with the top biochemist of the world or whatever your hobby is. I have read two of the previous Market Wizard books and learned quite a bit from them.

I am not a trader per say but I would consider myself a full time retail investor who runs a business on the side. As a longer term investor you don't really get much out of these books as some of the traders being interviewed focus on EXTREMELY short term moves. But in general all their lessons are quite handy even for long term investors such as the do's of Risk Management, Position Sizing, How To Interpret Market Signals.

I do short-mid term trades but that is around 10-20% of my activity but it's still helpful to read and learn to improve that small aspect of my skills.

I would say the best interviews in this one are with Dhaljit, Chris Camillo, Peter Brandt, Jeffrey Neumann and Kean. The other interviews are helpful but if you been in trading or read/followed any trader you will know a lot of those tips/strategies. Also if you read the Market Wizard books you will realize a lot of the interviewees have different strategies but their core fundamentals to trading are the same(patience, discipline, learning/focusing on mistakes, risk management).

Basically if you have any of those traits you can become a decent trader. Now living fulltime as a trader is another thing, for most people it will almost be impossible. Famously trading is one of the hardest careers to break into. Almost 95% of the people give up after the first year.

I would say the best way to use this book is to not copy one of the traders but see what they have all in common, see what works for you, apply/optimize to improve your game by inserting their tricks into your gameplan.

Like I said I have kinda moved into more long term + macro trading in the last year or so. There was a period where I was day trading options(the shortest timeframe you can get). But I realized from all my biggest winners that I am good at finding trends earlier than most people and the biggest returns take longer time to come.

Daytrading-shorttrading requires extremely discipline because as Naseem Taleb says, the montecarlo simulation doesn't favor positivity for traders.

Profile Image for Thiago Marzagão.
197 reviews24 followers
May 10, 2021
The interviewees follow different approaches - fundamental, technical, quant, social media mining - but they share similar attitudes and Schwager does a good job hypothesizing how these attitudes might relate to trading outcomes. On top of that, Schwager is a superb interviewer and he shows the world of retail traders in a way that's neither the aggregate statistics of academic papers nor the get-rich-quick Youtube ads selling day trading courses. I've always thought of traders as people who somehow missed Burton Malkiel's A Random Walk Down Wall Street. Schwager showed me a much more interesting picture. Here are some highlights:

skill vs luck

The eleven traders in the book all have spectacular performances. We're talking annualized returns of 20%-300%, sometimes for several years. But the book doesn't give us enough data to know whether those performances are the result of skill or mere luck. If you ride a big bull market it's possible to have stellar returns with random bets. Bitcoin has yielded an annualized return of 558% since May 2015. That doesn't make early Bitcoin adopters market wizards (though some of them certainly are).

"The magnitude by which the traders in this book outperformed market benchmarks over long periods (typically, decade-plus) cannot simply be explained away as 'luck.'", Schwager writes (p. 348). To give only two examples, Daljit Dhaliwal never had a negative year and he was profitable in 95% of quarters, and Pavel Krejcí had positive returns in 93% of all quarters. But to tell luck from skill we would need to know who was trading what when and what each monthly return was, then follow an approach like Fama & French's where they compare actual returns with simulated returns. Schwager doesn't give us a data appendix, so we can't do that. (The data is not Schwager's to publicize but he could have run the numbers himself and showed us the results.)

It's tempting to guess which of the eleven traders are skilled (as opposed to merely lucky) based on the narrative each of them offers. Several of them emphasize the importance of updating your beliefs based on new information (so that you can limit your losses if the market turns against you, for instance), but without overcorrecting. Some also emphasize the importance of sizing your bets according to how confident you are. These attitudes are typical of Philip Tetlock's superforecasters.

But they are just narratives. Each trader (except for the one quant guy) is describing his mental model of himself. That mental model is probably a better trader than the actual human behind it. And at times the narratives sound wishy-washy: "I am using my feelings as an input to trading." (p. 110), "The human emotions that we feel can be used as a signal source." (p. 193), that sort of thing. (Though for the most part the narratives are pretty Tetlockian.)

In short, it is possible that Schwager selected eleven very lucky people and then spent hours listening to after-the-fact rationalizations. But even if that's the case (which I don't know) the book is still immensely enjoyable if you are curious about retail trading.

people who are always wrong can make (you) money

My favorite strategy is one of Jason Shapiro's:

I watch Fast Money religiously at 5 p.m. EST every day. I can't tell you how much money I've made off of that show. [...] There is one guy on the program named Brian Kelly, who I have now watched for years. He is wrong by such a larger percentage than random that it is hard to believe. I will never have a position on if he is recommending it. (p. 69)


I don't know if that really works or if Shapiro is just rationalizing but I love the idea and now I want to find Fast Money transcripts and backtest it.

shrinking anomalies

Several of the interviewees believe that anomalies are disappearing.

Peter Brandt, talking about how things have changed for chartists since the 1980s:

Large long-term patterns no longer work. Trendlines no longer work. Channels no longer work. Symmetrical triangles no longer work. (p. 37)


Richard Bargh:

there are also far fewer opportunities now than back in 2013 and 2014. Back then, many things were still relatively new, like quantitative easing and forward guidance. There was more uncertainty about what the central banks were going to do and how they were going to do it. Whereas now, the markets have central banks so nailed down that there is not as much opportunity to make money on central banks as there once was. The markets now are good at pricing in events before they happen. I make money by pricing in a surprise, and with fewer surprises, there are fewer opportunities. (p. 100)


Amrit Sall:

increased market automation and high-frequency-trading algorithms have made execution harder and eroded my edge on some very short time frame strategies. (p. 142)


Daljit Dhaliwal:

It is no longer possible to trade for the initial move off the headline because the algos will make the trade before I can. (p. 157)


It makes sense. Data is cheaper, processing power is cheaper, machine learning courses are free; it would be odd if anomalies didn't disappear.

patience

Another common theme is the importance of waiting for the right trade.

Richard Bargh says you should have a side project:

One thing about event-driven trading is that if there isn’t an event to trade, there is nothing to do, and it is really boring. You can feel like you’re wasting your life. [...] I have found that I trade much better when I have a side project. If I have nothing else to do but trade events, and there are no events to trade, my mind runs wild. I need to focus my attention on something; otherwise, I will focus on the wrong things. (p. 104)


Bargh again:

Trading to earn a consistent amount steadily may be an admirable goal, but it is not a realistic one. Market opportunities are sporadic. [...] If you try to force consistent profitability, you will be prone to take suboptimal trades, which will often end up reducing your overall profitability. (p. 177)


Amrit Sall:

There will be periods in the markets where opportunities dry up, and there will be nothing to do. In those nothing periods, if you are looking for something to do, that is when you can create real damage to your account. (p. 129)


Daljit Dhaliwal:

you don’t have to take every potential trade. You can wait for a trade where everything lines up in your favor. (p. 154)


Chris Camillo articulated it best:

Looking back, I think a big part of my success when I went back to trading was my ability to look past the noise and be patient. I wasn’t in the industry. It wasn’t my job, and I wasn’t under any pressure to trade. I could go six months without a trade, and I didn’t have to answer to anybody. (p. 239)


(The other day I was listening to a podcast interview with a quant fund manager and he emphasized that "we work a lot, we don't just create a bot and then go to the beach". It's odd that people choose to invest in a quant fund but then expect constant human activity - as long as the fund is making you money what do you care that the staff is at the beach? But apparently investors want busy managers.)

What Camillo says ties in with Marsten Parker's advice:

Don’t quit your day job. (p. 287)


If you have a stable source of income it'll probably be easier to avoid overtrading.

TickerTags

One of my favorite interviews in the book is the one with Chris Camillo. He mines social media looking for information that might help him anticipate stock price movements. Like when there was an outbreak of E. Coli in Chipotle stores:

Chipotle had become famous for having long lines at lunchtime. Chipotle was such a trendy brand that it was common for people to tweet about having lunch there. They would also frequently tweet about how they were waiting in line at Chipotle. I was able to gauge real-time foot traffic by monitoring word combinations, such as "Chipotle" plus "lunch," and "Chipotle" plus "line," in online conversations. Almost overnight, the mentions of these word combinations dropped by about 50%.


I imagine NLP folks at quant shops reading about Camillo and his Chipotle trade. There they are, fine-tuning BERT and whatnot, and then Camillo with his hard-coded bigrams makes a killing.

Camillo made a business out of that: he created TickerTags, a company that tracks word combinations on social media. As Camillo says, tracking conversations is a way to "go even earlier than trasactional data" (like credit card information).

TickerTags doesn't seem to have been successful with hedge funds though:

Hedge fund managers want something repeatable and systematic. They wanted to know how often this approach would generate tradable information with high conviction. I couldn’t give them a hard answer. (p. 253)


That is a recurrent theme throughout the book. The trader "knows" that the strategy works but somehow can't put a number on it. Peter Brandt says if the market closes in a new high or in a new low on a Friday then it is likely to keep moving in that direction on Monday and early Tuesday. But when asked if he ever checked that pattern he replies "I have never statistically analyzed it." Hhmm.

the one quant guy

Marsten Parker is the only quant in the group. He touches on an interesting point:

I’ve always struggled with how to distinguish between a routine drawdown and a system that has stopped working. (p. 278)


Last month I finished reading Marcos López de Prado's Advances in Financial Machine Learning. de Prado talks about how the death of a strategy can actually be a good thing:

For instance, a mean-reverting pattern may give way to a momentum pattern. As this transition takes place, most market participants are caught off guard, and they will make costly mistakes. This sort of errors is the basis for many profitable strategies, because the actors on the losing side will typically become aware of their mistake once it is too late. Before they accept their losses, they will act irrationally, try to hold the position, and hope for a comeback. Sometimes they will even increase a losing position, in desperation. Eventually they will be forced to stop loss or stop out. Structural breaks offer some of the best risk/rewards. (p. 249)


de Prado suggests a number of tests to identify structural breaks - for instance, testing if the cumulative forecasting errors look random. I wonder if that's the sort of thing Parker is doing. He doesn't get into technical details though, other than to mention that he's learned about overfitting the hard way, that he uses parameter stability as an indicator of robustness, that your errors will be more serially correlated in real life than in your backtest, and that it's best to have several simple strategies than one over-optimized strategy. (Also: "The more strategies you run, the easier it is emotionally to turn one off.", p. 286.)

I love this:

if I knew everything I do now, I might never have tried trading in the first place. (p. 286)


I imagine all the state-of-the-art models that RenTec or AQR must be training, the hordes of Mensa Ph.D.s they recruit, the deep pockets they have to buy credit card data or Twitter's Firehose, I think of Quantopian's failure, and it sounds impossible to me that any sort of artisanal, DIY quant approach could succeed. But maybe Parker isn't just lucky. His interview updated my priors a bit.

loving your trade

The appeal of trading is that it is something you can do on your own - no employees, no bosses, no clients, no students, no reviewers, no drama, no politics, no culture wars.

Jason Shapiro:

I had six people working for me, and I hated it. I didn’t like managing people and being responsible for their success. (p. 72)


Pavel Krejcí:

I wanted to find something where the success or failure would depend only on me, not my colleagues, my boss, or anybody else. If I make money, that’s great; if I lose money, it’s my mistake. (p. 320)


That's happinness almost by definition.

Alright, any more quotes and I'll probably get a lawsuit so I'm stopping here. Go buy the book.
Profile Image for Robert.
280 reviews
March 28, 2021
The Market Wizards series has taught me so much about trading – finance is a very opaque industry so any insight into the mindset and methodology of successful practitioners is immensely valuable.

This edition focuses on phenomenal but "small-time" traders who trade their personal accounts, rather than the hedge fund titans from previous editions. The message isn't that "anyone can trade" – the traders are definitely above average in many respects (e.g intelligence and making) and have put in years of their lives into mastering their craft – but rather that success in trading is not determined by pedigree. While investing should be the ultimate meritocracy in principle, the reality is that people who have studied/worked in the right places have significant advantages.

Several of the stock traders in the book are poster children of Peter Lynch's "One Up On Wall Street" they know that Wall Street traders have edge in some areas, so they instead keep their ears to the ground looking for their own edge. For example, Jeffrey Neumann managed to make a fantastic trade on CBD drinks just by talking to the managers and customers of convenience stores.

Much of the wisdom here has already been mentioned in the previous books (for example, the importance of discipline and risk management). I think that goes to show that these traits are necessary conditions for success. But they are certainly not sufficient conditions – my main takeaway from this edition is that there is no formula for success in trading. You have to figure out your own approach. Exciting and daunting!
Profile Image for Vitalijus Sostak.
123 reviews19 followers
August 7, 2022
I have 199 highlights and 44 notes in this book - that says it all! :)
For me personally, Market Wizard series was always immensely captivating, reaffirming market lessons and entertaining to the brim. With this book the series is still going strongly, arguably the best entry because it interviews modern traders (many Mar2020 examples) and they're mostly small/independent ones, not working under big hedge funds.

And all those colorful anecdotes - they alone would make a 5 star rating for me, that's why I rated "Trading Sardines" that way :]

Read it as fast as I could and the main reaction - I want to revisit past Market Wizards books, too!


Favorite quote (about contrarian investing):
"I watch [CNBC] Fast Money religiously at 5am EST every day. I can't tell you how much money I've made off of that show. It's the greatest consensus show ever."
Profile Image for Phi Unit.
106 reviews14 followers
May 27, 2022
There were two crazy interviews in this edition:

1) the guy who turned $7500 into $50m primarily but trading penny stocks…absurd strategy but interesting and who am I to critique, I didn’t turn anything into $50m lol

2) the social arbitrage trader buckling traditional technical and fundamental analysis frameworks to create a system based off social data in our big data landscape.

Alongside that, as always Schwager’s series continually remind aspiring traders that one should adopt a strategy that fits one’s personality the most. The varying personalities and systems of the people interviewed in this book are a good example of that.
Profile Image for Jonathan Birnbaum.
101 reviews9 followers
December 11, 2020
Schwagers interviews are canon for the serious trader. This collection I took a particular liking to as I've been spending significant time over the last few months developing my own trading strategies, so hearing the stories of successful retail traders is rocket fuel for the aspiring. You see it can be done, and there a million ways to do it. The journey is figuring out your way and running with it.

A lot of the interview had slow starts, so found it easier to get through reading one or two at a time, and skimming the first parts of the conversations. The stock traders are more interesting than the futures traders, though futures are usually required to make huge equity returns given the massive leverage.

My favorite interview was with the penny stock trader. His method of shotgunning a hot sector in low float stocks inspired me recently to take positions in a handful of psychedelic stocks in the OTC market, and it's been paying off. Impossible to discount the luck for any one trade, but the track records seem long enough across this set that it's hard to write it off.

Jack does a nice job synthesizing the findings in the end regarding common threads across successful trading.

Profile Image for Anton Vrambout.
12 reviews1 follower
March 25, 2021
Do what you love 😘

There are 2 types of patience. One is the patience to wait for an opportunity. The other is to stick with it.

Worst performance often comes after best performance. So when everthing is going great, watch out !

Taking a break can act as a circuit-breaker. Size down, take a break, have some fun.

Great book overall, loved it !
Profile Image for Nahuel.
22 reviews1 follower
May 28, 2022
Excellent read. Tons of good experiences and reminders on the basics of trading and the importance of knowing your edge, having a system, stick to it, the use of stops, know how to deal with loses and know the fundamentals or technicals. This book makes even more sense after several years making some of those mistakes myself.
12 reviews
June 5, 2021
Book was pretty much exactly what i thought, if you're looking to learn some new magic this isn't the right book, but if you're interested in different methodologies and approaches the interviewees use for trading it's definitely worth a read.
Profile Image for Neil Quinn.
3 reviews
June 17, 2021
I much prefer Hedge Fund Market Wizard due to more sophisticated and unprecedented methodology given by those fund managers. This book tends to provide good mindset for becoming market wizard. By the way, it is really worth for reading with no hesitation of 5-star rating in my view.
Profile Image for NeeOn.
42 reviews
February 1, 2021
Continues the same recipe from the previous books. All I can say is that it makes me feel like quitting my day job and try to become an "unknown market wizard" myself.
4 reviews
March 5, 2022
Enjoyed every page of this book. The interview format makes it a quick read and content-wise offers some great insights on trading/investing philosophy and methodology.
20 reviews
November 1, 2022
I’ll break this up into two parts. The first being a general review of the book and my high level thoughts on it. The second a more detailed, but still high level synopsis of each trader covered.

This was a very engaging and informative book for a fledgling trader, such as myself. I took an incredible amount of wisdom about trading for a living from its pages. Its is a relatively simple concept, in which Schwager literally just interviews highly successful traders, who all have unique ways of getting there. The content was mostly accessible for someone at my experience level. Most of the concepts were immediately perceptible to me and most of the ones that were not, made for a quick side-research project to further my understanding.

Schwager seems to be a talented enough writer. I suspect that simply compiling and organizing the information is the bulk of his work though, as most of the pages are simply a back and forth interview. The real magic is how he brings it all together into tangible and actionable lessons for the reader. I suspect that there is a trader or two included in this book, that will suit any reader. For me, it was the guys that buck the rules a bit and forge their own path. For others, it might be the ones who are more computer programmer than stock trader.

Overall, I loved the book. I believe it would be engaging for everyone from the serious trader to people who care little for the markets. The only negative thing I’ll say is that Schwager cannot seem to bring himself to hide his Trump Derangement Syndrome. Somehow, on more than one occasion, he can’t resist the impulse to disparage Trump, even though most of the history he covers with these traders is pre-Trump and half of them aren’t even American. None of us or perfect and it doesn’t ruin the book – I honestly just found it kind of odd.

The Traders

Peter Brandt – Brandt is kind of the elder statesman of this bunch. He is maybe a little too well known for this book, but it bothered my none, because I took by far the most wisdom from his chapter. Brandt trades futures on relatively long time horizons (8-26 weeks) and does it mostly on technical analysis. While my style is to trades stocks intraday or swing, there are still several lessons I took to heart. One being absolutely ruthless with the stops. Brandt goes back to this over and over again. If he’s wrong, he lets the stop do the work and does not question it.

He also talks about some timeless trading virtues, but they somehow come through louder and clearer from him. Things like having and keeping an edge, and keeping emotions in check. He even describes himself as an order entry person and nothing else. One thing he says, that really struck home with me, is that charts are not forecasts, they are only wonderful tools for finding asymmetric risk and reward. I found myself wishing I could have Brandt all to myself as a mentor. He seems to be the one guy that has been able to do it the way they say you’re supposed to.

Jason Shapiro – Shapiro began his career abroad, trading in Hong Kong and Europe. Ove the years, he has honed his methods and is a very successful trader. Like almost all traders, he advises against emotion. Some big takeaways are to never have an opinion. When the tape is telling you something, don’t fight it. Shapiro always waits for the market to confirm his hypothesis. Shapiro sees the market as a game of participation, more than anything else, and aptly uses point spread betting to make this point.

The UK traders (Richard Bargh, Amrit Sall, and Daljit Dhaliwal) – I’m sure they would vehemently disagree, but I’m lumping these 3 together. Mostly because I didn’t take an enormous amount away from them and they are all actually connected in real life. While all of their strategies definitely do differ, many of the takeaways were the same for me. All three of them speak extensively about mindset. About being comfortable with your edge and playing it the right way. Ego is talked about a lot. That its ok to take a loss.

Bargh and many others in this book talk about not forcing trades. Many traders profiled do not take all that many trades a year. These 3 in particular are very high conviction, low volume traders. One thing brought by Sall, then echoed later on is the downside of the “paycheck mentality.” Feeling that you need to make a certain amount daily or weekly. This was a shock to my system as an aspiring day trader. Sall and others might go months without making a dime, then scoring windfall.

Dhalwali makes some very salient points himself. One that resonated strongly with me was his analysis that he never understood why technical should work, so he never had confidence. To him, fundamentals made sense, so his confidence was high. He made a couple of other points, that may have stuck with me more than any other in this book. One was that it is better to make money than to be right. Many traders get stuck on being intellectually right, but in the end the market doesn’t care. Follow the market, don’t fight it. His other great point was regarding stops. He suggests setting them at the point where your hypothesis is disproved, rather than at a set percentage or monetary loss. This makes a lot of sense to me. This tactic will keep you from making emotional decisions and is a true hallmark of having done your homework.

John Netto – Netto is an event based trader and a good one. He takes the completely contrarian approach to emotions and uses his and other’s to guide his decisions. A couple of nuggets from him include position sizing. He makes that point that sometimes you will lose 6 times in a row. Can your account absorb that? One excellent quote from Netto: :” Risk taking with a process leads to success, while risk taking on impulse leads to regret.”

Jeffrey Nuemann – I particularly enjoyed Nuemann’s chapter and I think it was for a couple reasons: 1.) He proved that you don’t have to be 100% ready to get started. For a decent stretch at the beginning of his career, he was trading a relatively simple strategy and making money. He admits he didn’t know much at the time and grew into things. The other part was that he does very deep research to get himself into a high conviction trade. He even has a story about finding some headline about a future bill in a Kansas City newspaper and following it into some huge profit. This kind of style in increasingly attractive to me.

Nuemann, like a later trader covered, never, ever goes short. It was refreshing to read this as a very long-biased trader myself. Its nice to know that a guy who has built an account into the multi-multi millions, did so without ever shorting a stock. He has a 4 corners methodology to his puzzle. Technical analysis, clean share structure, the right sector (one he knows), and a catalyst for the entire sector (not just his stock).

Chris Camillo – To some this is likely their favorite chapter, while for me it was boring. Mostly because Camillo created a proprietary software, which aggregates social media chatter, called “TickerTags.” It was a good story and hes an interesting guy. I was just in full trader mode while reading this, and found myself skimming most of this chapter.

Marsten Parker – This was more of the same. Parker creates mechanical trading systems and continually tweaks them over time. This is the opposite of my trading style and I was not really in the mood for Q&A’s on making your own algorythyms. That being said, it was still mildly interesting to me and I suspect highly informative for those more inclined to this style.

Micheal Kean – Kean is a New Zealander who has an entertaining strategy. While he manages about eight million for himself and a few others, he has a two-pronged approach. He does what seems to be standard portfolio management for most of the money, trades some and actually has s risk mitigation strategy of shorting OTC biotech stocks on the downside of a pump and dump. Its highly entertaining and worth the read.

Pavel Krejci – I loved Pavel’s story because of its simplicity. He was a bellhop that started trading. He quote literally trades for a living. He keeps his account always at $50,000 - $80,000 and takes the rest for living expenses. Krejci has a simple strategy. He has about 200-300 stocks, with high volume. He watches their earnings, and deeply researches most of the year. He then intraday trades this basket of stocks when he is sure they will pop post earnings. He uses hard stops and takes his profits same day, always. A clean and simple system that affords him a good living. May we all be as content as Pavel.
77 reviews
February 14, 2021
I take a fundamental research approach to equity markets; however, I learned so much from Unknown Market Wizards, and the traders profiled. Ultimately, reading the "1,000 book" on Buffett and his investment philosophy does not provide the type of learning experience as reading about those in the investing industry who take a different perspective on markets. That aside, Jack Schwager has once again put together a delightful read on an eclectic group of traders. The individuals profiled within vary considerably in their approaches. Yet, Schwager has a canny ability to draw out parallels and lessons from each interview that are tangible advice to make someone a better trader. The book is constructed, so if any individual interview is not of interest, you can easily skip the chapter (for example, I did not read the chapter on systematic trading). Schwager also provides an excellent summary at the end of the book that brings everything together. In sum, I would highly recommend this book to anyone interested in trading markets who wish to improve on this endeavor.

I've put below five takeaways (taken from the summary chapter) and my favorite quotes.

1. Keep a Trading Journal
2. There is No Single True Path
3. Know your Edge & Learn from Mistakes
4. If You Are on the Right Side Euphoria, Lighten Up
5. The Flexibility to Change Your Opinion is an Attribute, Not a Flaw (Strong opinions, weakly held)

Brandt’s motto is: Strong opinions, weakly held. Have a strong reason for taking a trade, but once you are in a trade, be quick to exit if it doesn’t behave as expected.

The most powerful word in the markets is “despite.” If you hear or see a comment like, “Despite the increase in oil inventories being much higher than expected, oil prices closed higher,” that is the tape telling you what is going to happen. Everyone saw inventories were much higher than expected. Why did the market close up? The tape knows more than anyone else.

I learned that trading is not about being right; it’s about making money. People are often preoccupied with being intellectually correct, which can be a hindrance to making money.

One of Dhaliwal’s rules is: Seek clarity over certainty. The markets are not about certainty; they are about probabilities. Waiting for trades that approach the ideal of certainty, or near certainty, will lead to inaction and missing many trades that offer good probabilistic bets.

If there is one message in this book about the possibility of trading success, it is: It can be done! However, it is not a goal within reach of most people. Succeeding as a trader requires some combination of hard work, innate skill, and beneficial psychological traits (e.g., patience, discipline, etc.).
Profile Image for Luke Ingalls.
40 reviews
January 14, 2022
If you've read many books on investing, this one adds very little and is largely redundant. It gives you interviews with many under-the-radar investors who've proven themselves to be quite successful. Each interview is meant to give unique takeaways, but largely these takeaways be summed up as: be prepared, practice, and use risk management techniques.

If you are looking to learn a lot about a trader or be encouraged by their success, I would recommend reading One Up On Wall Street: How to Use What You Already Know to Make Money in the Market or A Man for All Markets instead. These are very similar but offer first-hand accounts of traders who are much more successful than what this book has.

Assuming you've read those books or similar ones, all this does is offer a refresher. This isn't entirely bad. Having read the books I mentioned above a while ago, it was interesting to revisit these concepts after being introduced to The (Mis)Behavior of Markets. I think books by Taleb might have a similar effect, where you can have new theories in mind while revisiting basic concepts.
4 reviews
August 3, 2021
Having now read all of Schwager's Market Wizards saga, I found them entertaining, fulfilling and informative. Unknown Market Wizards, however, is the exception. If you haven't read all the others, then I recommend you do. If you have, I recommend you read them again.
Unknown Market Wizards doesn't seem to have the same calibre of traders the others did, and was a lot shorter too. It felt that in one case, one of the wizards implored Schwager to be included in the book. Others use Twitter to determine what to trade without using technical or fundamental analysis. Time will tell if this will be a tried and tested method.
One thing they all had in common was their use of risk management, but their revelations weren't ground breaking and didn't go into detail.
Schwager's writing format and his knowledgeable input hasn't changed which provided comfort as this is a major selling point.
The series is one you must read that provides valuable insight, and the latest edition mainly just to complete the saga.
6 reviews1 follower
November 20, 2022
Great stories, the imaginative ways people make money in the market is amazing to hear about
Profile Image for Andy.
1,581 reviews520 followers
March 28, 2022
I'm not a trader and don't want to be one, but I recently read The Psychology of Money and thought this might be interesting in that context. As it turned out, it was pretty much all about psychology. These people had wildly different methods. What they had in common is finding a style that flowed for them individually, and figuring out how to deal not just with uncertainty but also with frequent losses. The interviewer asks them about their biggest mistakes and other interesting questions that they seem to be giving honest answers to. I think this could be valuable for life in general, but I did have to go fast over some of the details about trading that I didn't care about at all.
The narrator does a surprisingly good job for a business book of getting into character and doing different voices for all the traders.
9 reviews
January 16, 2021
Extremely disappointed

I so looked forward to this book and pre -ordered it. I anticipated how individuals had adopted the latest software and on-line brokerages to programme their own systems using such platforms as ProRealTime or Trade Station etc.. What I got was more of the same. Very little difference in the new wizards from the old ones. Surely Jack could have found plenty private traders using fully automatic systems (I am one but by no means a wizard).I think Jack owes us an apology¡
Profile Image for Alejandro Hardziej.
52 reviews1 follower
December 23, 2020
I devoured this book in less than two days. This new Market Wizards immediately connected with me because it is all about individual traders trading their own accounts -just like so many of us have been doing during 2020 locked at home. The interviews cover all the right questions and the stories are simply amazing and highly motivating. I could not stop reading. If you trade your own account -regardless if you are a beginner or a professional- I can only recommend this book.
Profile Image for Marco.
83 reviews46 followers
December 8, 2020
I'm a huge fan of the series.
Here the level was a bit lower, the sums are smaller for many traders ($100k/yr?), while a couple made millions.
There are some interesting lessons, but there wasn't that much new materials.
Overall, I believe this series is still the best and most useful to someone who wants to get better at trading, this book wasn't the best of the series.
Profile Image for Izalette.
135 reviews
January 14, 2024
Are there no strong women trader?

Strong opinions, weakly held.

Missed trades (could have, would have, should have: live with it. Make a decision, write the order, place the order and live with it.

Avoid emotional decision: Select trades that meet specific criteria and timing is well-defined down to the entry day. Once in the trade, have a predetermined point to exit the trade if it is losing money, and a plan to take profits if successful.

Risk management - focus on getting out with a profit or break even vs. anticipated price move. Have a stop loss. Risk management not just on trade but also the portfolio. there could be simultaneous adverse price moves in multiple positions. Seek inversely correlated trade.

Damaged from a bad trade extend beyond the loss because it could lead to missing winning trades otherwise taken. Keep a log of subpar trade to aware of automatic response patterns. Emotional state: stay calm, don't FOMO.

When nothing is going on, don’t do marginal trades, wait for the unicorn.

Event tradings: specialized in identifying shifts in market narrative that are likely to result in market repricing. Fed has to QE, gold has to increase, then the world became concern of deflation and gold was sold off. Also hedgedfund withdrawals because HF primarily long gold, they had to sell gold to raise money. 'tradethenews’ Unplanned event: Trump announced tariffs against china. Sell risk with abandonment.

Trendline breakouts: know which breakouts to buy. Stocks had seen a large declined, near lows. Company has a service/product that suggests a considered upside potential, there is a catalyst to suggest the prospect for an imminent price rally, stock is part of a sector that you define as prime for a substantial upward price move. familiar with the product and try it. the stock shows signs of live (price movement or abrupt price in volume). All has to line up. If the stock fails to follow through on the upside after you buy, exit the trade.

Neumann only buy breakouts from downtrend lines because it is better entry price and is willing to accept false signal. Brandt buys from horizontal consolidation because trend line is unreliable.
Don’t try to change who you are. Instead, find out what you’re willing to spend time researching because it is your passion to develop your expertise.

Executing intraday because trading is speeding up. High frequency trading, mutual fund transitioned from human execution to executing algorithmically throughout the day. Executing quicker makes a difference.

Mean reversion: asset prices and volatility of returns eventually revert to their long-term average levels.
- Long mean reversion system require stock has to be an uptrend but down on a certain % from its recent high in a given timeframe. If these two conditions are met, enter a buy order at a specified lower with the exact amount lower based on the stock’s average day volatility.
- Parameter: broad range has fewer trades but higher expected profit per trade. Moderate parameter gives more trades but the expected win is marginal. So you pick between these.
- Exit: enter a limit order as the market is dropping and wait for a day when the higher close. not waiting for a rebounce just capture small wins. There is no stop, stop will kill the results.
- Risk: 5 day time stop. if the higher close doesn’t happen in 5-days, liquidate it.
- no bio-tech stocks because they have a multiplier in price in result to FDA or trial decisions.
- Short mean reversion system: sell stocks that has a limit uptrend.

QE when short-term interest rate is 0, no incentive to buy short-term treasury. In 2008, Fed increased money (QE) w/o decrease interest rate. Fed created money to buy assets (mortgaged back securities), reducing longer-term interest rate.

Trading is finding the right approach for you. You need to discover, compatible with your personality, your beliefs and comfort zones. Technical methods, fundamentals, social arbitrage, day trades, technical input, mean reversion, etc.

Keep a trading journal on what you do right and what you do wrong. Reasons for trading, emotions, thoughts and feelings, to track how mindset changes over time. Categorizing trades. Know your edge - which trade to focus on. Learn from mistakes
This entire review has been hidden because of spoilers.
Profile Image for Manik Patil.
33 reviews10 followers
October 31, 2021
Jack D Schwager succinctly summarizes the nuggets from his interviewees. I've learnt from his prior books such as : Market Wizards, The New Market Wizards: Conversations with America's Top Traders, Hedge Fund Market Wizards, Stock Market Wizards: Interviews with America's Top Stock Traders

I wasn't as impressed with the latest body of work: Unknown Market Wizards: The Best Traders You've Never Heard of - here are three reasons why:

1. Clique: The candidates seemed like a rushed list based on a common point in Jack's network - a clique.
The pandemic may have resulted in such a rushed job

2. Traders' Account Sizes: Relative to prior installments of Market Wizards series, this one had relatively uneven account sizes (one of them even had $100K/yr PnL objective).

3. High Expectations: I've read all of Jack's previous books and I even met him in person. I learnt many lessons from Jack's prior work. I didn't learn anything new from this book even though the accounts of traders such as Dhaljit, Chris Camillo, Peter Brandt, Jeffrey Neumann and others were interesting. This may have to do with where I am in my learning journey as well.
Profile Image for Jairo Fraga.
332 reviews16 followers
December 8, 2022
Great book by the author here. Some different interviews, with people not much known to public.

Peter Brandt may be here only because he is a friend of the author, because his track record, even though long, isn't that great.

A cool one is Jason Shapiro, the contrarian, he says that he watches some CNBC shows everyday just to put on an opposite trade.

Most of the traders on the first part, about futures traders, trades on events surprises, loading up more contracts on events that they think they are really right.

There is a good interview with Marsten Parker, that use mechanical system trading, which I find interesting, even though his performance isn't that awesome. Clearly shows how mean reversion systems can expose you to big tail risks.

Stock traders usually find out what should move specific stocks on certain days, like earnings, bigger catalysts, etc, which is a good idea, but might take some good time to pay.

Some of the advice which I also agree, on the end of the book:

- Find a Trading Method that is Compatible with Your Personality
- Know your edge
- The Power of Asymmetric Strategies (big, occasional trading days)
- Equity-based risk management (define max drawdowns for your strategies/account)
- Winning Traders have a specific Methodology
- Don't trade based on someone else's recommendations
- Aiming for Consistent Profitability can be counterproductive (you can't make money every month)
- Successful Traders Love What They Do

I expected a bit more from those traders. They had some good profits, but nothing astonishing.

Estimated reading time: 10h30m
Profile Image for Blaze-Pascal.
294 reviews2 followers
December 30, 2021
I think this is an excellent book for anyone who is learning how to get into trading stocks or futures.

At this point I've read a dozen or more books in trading stocks and there are certain lessons I have. Here's the most basic one...

There is no pre-written formula for success. If you want to succeed, learn to be responsible for yourself first, including your emotions. Study the market, keep learning about yourself and what works best for you, and you are not guaranteed success, but you have improved your chances immensely.

That right there is the ultimate lesson that every successful stock trader learns, and the very same lesson is in almost every single stock trading book there is. If I were to suggest how to use this book... it would be to read it more than once. The author surveys several different strategies that very successful traders, those who are consistently successful, have used. There are dozens of strategies. First read about them all... then think about what you are willing to do. What are you willing to commit to trading? How much time and research will you commit? If you are willing to do the difficult work, you can beat the system, but it's not easy. Once you have a sense of who you are, and what kind of system makes sense for you, maybe look at someone who has been successful who also has a similar view. Learn from their mistakes and their successes, and prepare to play the game... ultimately... you will be responsible.

Profile Image for Jeremy Gardiner.
Author 1 book21 followers
February 19, 2022
I was blown away by how good this book was. I have read several books on trading, and I have found most of them to be underwhelming. This one was a notable exception.

The author profiles 6 futures and 5 stock traders. What was great about this book is that almost all of the traders profiled had a very unique style that often contradicted another traders rules. That really emphasized that there isn't one particular style that works and that one can find their own niche and find success. In that, it was a very liberating read.

I found my knowledge of the market grew, I was inspired, and I learned about a bunch of different styles to contemplate implementing or adapting to my own. To show some of the range, he profiles one person who is a penny stock trader, another who primarily trades fed announcements, and another who uses trending tags on social media instead of technical/fundamental analysis. Of course there are more standard traders too who emphasize both fundamental and technical analysist. I loved the diversity of traders profiled.

The other thing that made this book a winner was the skill of the author. He profiles each trader in an interview format and does such a skillful job presenting and recapping each chapter with the notable takeaways.

Finally, I listened to the audiobook, and it was an excellent performance too.

This is a book I want to re-read in the future, but first, I plan to read some of his other books.
December 11, 2020
This is a group of mostly decisions making traders with one system trader

I learned many lessons from this book especially for what is happening up to April 2020. The biggest difference today is there are millions of computers analyzing the real time data every nano second. So very few things that is based on a daily base data can work. Some theory stay unchange is risk management is most important. But how to do it now is different than the old days. You need flexibility to get out of a trade before it hits your stop lost point. Same with combining technical and fundamental information and use your own discretion becomes one of key skills in trading. Overall I still think the luck factor is key. I am not sure pure skill can produce super results. You need a lot of luck. So for those few extremely successful traders there are thousands who are just as skilled but less lucky ones.
62 reviews1 follower
December 14, 2020
Many things impressed me about this book, but perhaps most of all it was Schwager’s ability to summarise his 11 lengthy interviews with these very successful traders into 46 points explained in the final chapter which are crucial to success. A fundamental point is that these traders are, and fully accept they are, to blame for their own mistakes and a common theme is how they set up routines to use to improve their own understanding of their mistakes and become stronger. The book then, in addition to being insightful into the activities of stock market traders and how the 11 interviewees became traders, by default gives much insight into how to become effective and therefore successful over a prolonged period as a stand alone player in a very competitive environment. These insights struck me as being useful for a wider range of self-employed people and potential go getters in whatever industry.
Profile Image for Nikola Bakic.
24 reviews4 followers
September 30, 2021
Masterclass in trading in financial markets. A must read for anyone who has every thought about trading as a career (either in a bank or for own account). This is the latest installent in the hugely popular Market Wizards series. The cool thing is that Jack Schwager interviews relatively obscure traders of various educational and life profiles. Through a series of very thorough interviews Schwager delineates the key personal attributes required for success in trading. At the end of each interview Schwager summarises his key observations and findings and lessons learnt. The final chapter of the book summarises 46 key conclusions and principles that could be a good starting point for someone who wants to give trading a go. I think this book can also be super relevant for anyone who is professionally active in financial markets (such as myself) or who actively manages personal investments (pensions, ISAs, cryptos, etc)
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