The Trader’s Summer Reading Series: Episode 5— The New Market Wizards: Conversations with America’s Top Traders
A book packed with a combined hundred+ of years of expert trading advice.
Option Screener and The Wheel Screener are trader-friendly option screeners that analyze, classify, and categorize all options available on the market on a given day. The team is always more than happy to share their technical insights, market opinions, and methodologies here on Medium. This article continues our summer reading series, where founder Chris will be reading trading and market books all throughout the summer. We hope you’ll join us, and we hope you enjoy the article!
This Week’s Book: The New Market Wizards: Conversations with America’s Top Traders
The New Market Wizards: Conversations with America’s Top Traders was published by Jack Schwager in 2001. As the title states, it is quite literally conversations with top traders, directly conducted by Schwager and the traders themselves.
Book Takeaways
This book is packed with insights from top traders of all sorts, styles, and instruments: macroeconomic-only traders, technical-only traders, long-term traders, scalp (short-term) traders, swing traders, futures-only traders, and stock-only traders. In a true Q&A interview style, the book goes through interviews with nearly 20 top traders.
Oh yeah, the legendary Stanley Druckenmiller is in this book too!
William Eckhardt — The Mathematician
William Eckhardt was the co-founder with Richard Dennis of the Turtle program, which chose a group of seemingly disparate individuals and turned them into highly profitable traders (Dennis appeared in the first Market Wizards book, which we also reviewed a few weeks ago):
Incidentally, The Complete Turtle Trader by Michael W. Covel, which details the story of these “individuals-turned-trader” as well as more background and insight into Eckhardt and Dennis, was also part of our Summer Reading Series:
I chose to highlight Eckhardt here because I thought he had a variety of really insightful points. Despite Eckhardt’s trading relying heavily on the mechanics and mathematics of markets, his quotes are strongly related to trading psychology:
“In many ways, large profits are even more insidious than large losses in terms of emotional destabilization.” pg. 154
“As a general rule, losses make you strong and profits make you weak.” pg. 154
“The market behaves much like an opponent who is trying to teach you to trade poorly.” pg. 154
and Eckhardt also requotes something that Dennis used to say:
“If it feels good, don’t do it.” pg. 156
Fantastic stuff from William Eckhardt!
Bill Lipschutz — The Sultan of Currencies
Bill Lipschutz was a major player in bringing Salomon Brothers to the forefront of the currency market, and his chapter stood out as particularly interesting to me.
Before reading this chapter, I knew a little bit about forex, but that was about the totality of my exposure to the currency markets. Little did I know the intricacies of the interbank currency market, let alone that there are options on currency pairs.
Even more interesting are the stories of memorable trades that Lipshutz shares. Without giving too much away, two trades that stand out were a 3 billion dollar short position in the Deutsche Mark, and a 23,000 lot (yes, that’s thousand) of bull call spreads on the Japanese yen — an 800 million dollar position!
The intimate stories Lipschutz shares about his time at Salomon, describing what's going on in these rooms where quite literally how these masters of the universe move the markets are fascinating, and I can strongly recommend this chapter to every trader.
Oh yeah - Lipschutz got a master’s degree from Cornell — just like me! 😉
I’m obviously on my way to taking 3 billion dollar positions! 😂
Market Wiz(ar)dom
At the end of the book, Schwager summarizes the wealth of knowledge, habits, tips, and tricks he has learned from interviewing all the traders in Market Wizards and New Market Wizards. He includes over 40 key points and descriptions of each. Some that stood out to me:
- Good trading should be effortless
- Losing is part of the game
- You can’t win if you have to win
- It is absolutely necessary to have an edge
I encourage you to read the book to read the full set of market wiz(ar)dom points!
Our Rating
Now, the moment you’ve all been waiting for, our Official Wheel Screener Book Rating™! We have to rate The New Market Wizards: Conversations with America’s Top Traders a 5/5 star rating:
⭐⭐️️️️️️️️⭐️⭐️⭐️
If you want another dose of getting into the heads of the world’s most performant and best traders, this is it!
Thanks & Stay Tuned!
Tune in to the next episode to find out what book we’ll review next!
Until next time,
-Chris & The Wheel Screener Team
We’re on a mission to make options data accessible and a 100% customizable option screener dashboard for any options trader, from beginner to advanced.
Interested in learning more? Check us out at Option Screener and The Wheel Screener.
