THE INVESTMENT CLASSIC

"I've readMarket Wizards at several stages of my career as it shows the staying power of good down-to-earth wisdoms of true practitioners with skin in the game. This is the central document showing the heuristics that real-life traders use to manage their affairs, how people who do rather than talk have done things. Twenty years from now, it will still be fresh. There is no other like it."
—NASSIM N. TALEB, former derivatives trader, author ofThe Black Swan, and professor, NYU-Poly

"Market Wizards is one of the most fascinating books ever written about Wall Street. A few of the 'Wizards' are my friends—and Jack Schwager has nailed their modus operandi on the head."
—MARTIN W. ZWEIG, PhD, Editor,The Zweig Forecast

"It is difficult enough to develop a method that works. It then takes experience to believe what your method is telling you. But the toughest task of all is turning analysis into money. If you don't believe it, try it. These guys have it all: a method, the conviction, and the discipline to act decisively time after time, regardless of distractions and pressures. They are heroes of Wall Street, and Jack Schwager's book brings their characters vividly to life."
—ROBERT R. PRECHTER, JR., Editor,The Elliott Wave Theorist

JACK D. SCHWAGER is a recognized industry expert on 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. He is also an advisor to MarkeTopper Securities, an India-based quantitative trading firm. Previously, Mr. Schwager was a partner in the Fortune Group, a London-based hedge fund advisory firm that specialized in creating customized hedge fund portfolios for institutional clients. His prior experience also includes over twenty years as a director of futures research for some of Wall Street's leading firms.

Preface, ix

Prologue, xiii

My own story, xv

Part 1: Futures and Currencies

Taking the mystery our of futures, 3

The interbank currency market defined, 7

Michael Marcus: Blighting never strikes twice, 9

Bruce Kovner: The world trader, 51

Richard Dennis: A legend retires, 85

Paul Tudor Jones: The art of aggressive trading, 117

Gary Bielfeldt: Yes, they do trade T-bonds in Peoria, 141

Ed Seykota: Everybody gets what they want, 151

Larry Hite: Respecting Risk, 175

Part 2: Mostly Stocks

Michael Steinhardt: The concept of variant perception, 193

William O'Neil: The art of stock selection, 219

David Ryan: Stock investment as a treasure hunt, 237

Marty Schwartz: Champion trader, 257

Part 3: A Little Bit of Everything

James B. Rogers, Jr.: Buying value and selling hysteria, 283

Mark Weinstein: High-percentage trader, 321

Part 4: The View From the Floor

Brian Gelber: Broker turned trader, 345

Tom Baldwin: The fearless pit trader, 367

Tony Saliba: "One lot" triumphs, 387

Part 5: The Psychology of Trading

Dr. Van K. Tharp: The psychology of trading, 411

The trade: A personal experience, 431

Postscript: Dreams and trading, 437

Final Word, 439

Appendix1: Program trading and portfolio Insurance, 441

Appendix 2: Optionsunderstanding the basics, 443

Glossary, 447