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1) Did most traders you interviewed make their money from the outlier type of trades or periods (like one of high volatility, or extended trends), or were their profits more or less cumulative month over month?
Dear Jack...
in your recent books you describe the successful work and life of the few market wizards who have totally different possibilities, tools and money to trade with. How in your opinion we - mostly simple traders with limited financial resources could possibly contribute from reading your book ?
Fascinating insights into the hedge fund traders who consistently outperform the markets, in their own words
From bestselling author, investment expert, and Wall Street theoretician Jack Schwager comes a behind-the-scenes look at the world of hedge funds, from fifteen traders who've consistently beaten the markets. Exploring what makes a great trader a great trader, Hedge Fund Market Wizards breaks new ground, giving readers rare insight into the trading philosophy and successful methods employed by some of the most profitable individuals in the hedge fund business.
Presents exclusive interviews with fifteen of the most successful hedge fund traders and what they've learned over the course of their careers
Includes interviews with Jamie Mai, Joel Greenblatt, Michael Platt, Ray Dalio, Colm O’Shea, Ed Thorp, and many more
Explains forty key lessons for traders
Joins Stock Market Wizards, New Market Wizards, and Market Wizards as the fourth installment of investment guru Jack Schwager's acclaimed bestselling series of interviews with stock market experts
A candid assessment of each trader's successes and failures, in their own words, the book shows readers what they can learn from each, and also outlines forty essential lessons—from finding a trading method that fits an investor's personality to learning to appreciate the value of diversification—that investment professionals everywhere can apply in their own careers.
Bringing together the wisdom of the true masters of the markets, Hedge Fund Market Wizards is a collection of timeless insights into what it takes to trade in the hedge fund world.
What is really interesting is many of the these traders in the book were regular Joe's that started trading kind of like us. Now they manage billions.
Just sayin.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
Some things I've been thinking of today to ask him:
Sweet spot -- Insight about being flexible with your positions vs holding for targets or through "pain", as well as being able to recognize when you are wrong and get out, or even reverse
Many traders look for supporting evidence that their trading bias is right, so for confirmation for example, while a few constantly look for evidence they are wrong, and are constantly questioning their beliefs -- discussion on this
Do you believe that you can be long term consistently profitable with simple directional trading?
What about recent events like MF Global/Corzine, and JPM "Whale" -- trades gone wrong, the consequences of such, and how they are being handled?
Lots of famous one-liners in his books, let your winners run, cut losers quick, etc.
Ed Seykota famous for his "Moron rule", where morons keep adding more on to their position when they are wrong. PTJ famous for "Don't focus on making money; focus on protecting what you have."
Marty Schwartz for "Learn to take losses. The most important thing in making money is not letting your losses get out of hand".
Tom Basso for "I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where you buy and sell."
Bruce Kovner "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"
Van Tharp "The realization that you are responsible for your results is the key to successful investing. Winners know they are responsible for their results; losers think they are not."
When I first read these passages, they didn't seem particularly insightful (at least to me as a then less experienced trader) but after years of thinking about them and becoming more experienced, they are actually incredibly insightful and really sum things up nicely. What other one-liners can he recall that really separate the successful from the unsuccessful?
Great quotes Mike, thanks for consolidating them. They are all quite generic, which makes them seem kind of frustrating for those looking for specifics ("the answer"). But they are all so powerful.
Interestingly but not coincidentally by any means, out of the 6 quotes you referenced there, 5 of them are focused on risk. NOT how much money they can make, but on protecting and managing capital. That should be a wakeup call to anyone not focused on risk management.
If you presented these quotes to a rookie, and took the names out (if they would recognize them), they would turn their nose up at "hog wash" [southern for nothing useful], because it wasn't some fancy indicator or complicated methodology that pinpoints where to buy or sell.
I felt this way once myself!
Boy was I wrong, and I think that any trader that survives this game long enough comes to really appreciate the wisdom behind those one-liners, and how much information they really convey.
Some traders think it is really hard to make money trading, and they aren't sure where to begin. The first step is to not make all the mistakes that all the rookies are making over and over again!
I'm creating this thread with the purpose of a 'catch all' for any trading related question that futures.io (formerly BMT) members want to ask, but don't want to create a new thread for -- or find an existing thread to reply to.
I've …
Is really full of these rookie mistakes. I am not trying to pick on these guys. I want to help them. But the "collection" of their questions and their behaviors/patterns really shows just how many mistakes traders make, and how similar all those mistakes are.
You don't need to look much further on the site to see other threads, very painful threads, of traders blowing out their accounts - and other members trying to step in as an intervention, to give them much needed advice - only to witness those rookies discard the advice and continue to plow ahead, until their account is completely blown up.
But the thing we must all remember, most of the really hard lessons in life must be self-taught. No amount of listening to someone else can ever make up for experiencing it first hand. And how many traders do you know that haven't blown at least one account? Virtually zero. It is a prerequisite, because only after you've gone through those pains and emotions can you really start to understand... No one could have said any "magic words" to prevent me from blowing out my first account, I wasn't ready to listen to good advice at that point. I was only interested in finding the holy grail, and that is true of most rookies.
1) I am new to your work but from what I have read so far it seems that you are for creating your own system which fits your personality, what was that process like for you and how did the aha moment come about?
2) Who was the trader that you most connected with and why?
3) How much of a factor for the "big guys" like PTJ at the time and others who can actually move markets is a part of their success, meaning was there a significant improvement in their returns as the funds were there to make big plays?
4) what disadvantages does the little guy have when compared to the average day of a hedge fund or market maker, hft's etc...
5)Is a hedge fund really hedged? Is there always a bias to the long side for "cheap" opportunities or what goes into the decision process when starting a position ?
Thanks again, looking forward to it
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
My question would be, where do the retail traders stand in the future? How do we stay in the game? Will technology make it difficult for the discretionary trader to be profitable as opposed to the mechanical and algo systems or will we be like the small mom & pop retail store owners that closed their doors when they could no longer compete with the big box stores type of scenario? If the advantage gap between the retail trader and the institutions widens, who would be willing to stay in this business? My concern is, will I still be able to compete on the same playing field as we have today or do you see any of that changing?
Yeah and with prop traders moving to hedge funds what changes will be biggest positives/negatives
"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
