Jack Schwager: Have The Markets Changed Over The Years?

Jack Schwager has written four excellent book on his Market Wizards series (Market Wizards, The New Market Wizards, Stock Market Wizards and Hedge Fund Market Wizards). When asked on how these new traders differ from the ones interviewed in the first book he answered:

"Every person is a different personality, different story, different lessons and different way of trading. Even within this book (Hedge Fund Market Wizards) everybody I interviewed is completely different on how they make money in the markets. (That's) amazing, I mean, I couldn't even make up as many various ways of trading markets as these people are using."

On the price action itself, Jack stresses that markets have changed a lot over the years but the main trading principles do not really change over time:

"Markets are always changing and but certain principles but the main principles don't change." 

While trend following worked very well in the eighties and nineties, in the modern markets they do not work well. One of the reasons for that is the proliferation of computerized trading systems and models:

"I think one big change is the the big trend following profits that were easy to take in those earlier years no longer are then you can still get big trends but markets sent a much more false breakouts you tend to have lots of choppier conditions it's more difficult to make money doing that type of approach you can still do it but has to be a bit more sophisticated."

Jack Schwager: Losing Is Part Of The Game

Video duration: 2m48s

Highlights:

"One of the keys who to being a successful trader is to understand that losing is part of the game."

"It's all about finding what works for you and it's not the same as for somebody else." 

"The most important thing is risk management they all will tell you that more important in methodology."

"Marty Schwartz spent like 10 years he says losing money and then he became a winner I asked what what changed he said I became a winner when I understood it was okay to lose."

The role of "Luck" in trading:

When asked if luck has anything to do with trading success, Jack Schwager answered that over the long run luck has nothing to do with successful trading in the markets:

"In the short run you're better off being lucky than smart, that's the old cliche. It's true. But for the long run only the traders that really know what they're doing will survive. So, in fact what luck is one of the things that fools people because in trading even the amateur  can be right because you can only buy or sell so some people think they're smart just because they get into the bull market and they're on the right side. But over the long term,luck has nothing to do with it, just for the short term."

Here are some of Schwager's books available for sale on Amazon: 

Market Wizards, Updated: Interviews with Top Traders (2012) 

The New Market Wizards: Conversations with America's Top Traders (1994)

A Complete Guide to the Futures Market: Technical Analysis, Trading Systems, Fundamental Analysis, Options, Spreads, and Trading Principles (2017)