wizard Lessons

Discussion in 'Trading' started by adadadog, Jan 8, 2010.

  1. I learn better by writing it. I am typing the list of "Wizard Lessons" from Jack D. Scvhwager's book Stock Market Wizards for anyone who finds it useful. I may rephrase it to make it shorter.

    1. There is no single true path
    2. The Universal Trait: strategy+plan covering all contingencies; stick to the plan
    3. Trade your personality
    4. Failure and perseverance
    5. Flexible
    6. it takes time
    7. record your observations
    8. a trading philosophy
    9. an edge
    10. confidence
    11. hard work
    12. Obsessive
    13. an innovator
    14. take a loss to win
    15. risk control: stop-loss, smaller position, low-risk position, small initial position, diversify, short, hedge.
    16. willing to risk
    17. focusing on undervalued
    18. value alone is not enough
    19. catalysts
    20. exit on stop-loss, profit, time, violation of trade premise, unexpected, portfolio considerations.
    21. Get out if market does not comfirm expectation
    22. Liquidate for better oppertunity
    23. patience
    24. goals
    25. "This time is different" always wrong
    26. bullish/bearish relative to price
    27. do not predict
    28. Trust no-one/nothing; verify
    29. Never listen to other opinions
    30. Beware of Ego
    31. Self-Awareness
    32. No emotion
    33. Personsal Problems are cautionary flag
    34. review past trades
    35. never mind looking stupid
    36. danger of leverage
    37. position sizing
    38. complexity is not equal to success
    39. Trading is a vocation, not a hobby
    40. need a plan
    41. define h-probability trades.
    42. low-risk opportunities
    43. have good reason for any trade
    44. common sense
    45. trade the hard to fill
    46. Do not refrain from a trade only because you missed a better fill
    47. Do not hold a losing position
    48. Need not all-or-nothing trading(scale)
    49. pa response to news
    50. insider buying
    51. big boy holdings
    52. get out when hoping
    53. diversification is not necessarily a virtue
    54. data mining caution
    55. synergy+marginal indicators
    56. persistent condition engender persistent performance
    57. no popularity contest
    58. two-sided coin is fair; long/short are not.
    59. shorting to hedge
    60. shorting loss is unlimited
    61. shorting candidates: high receivables, change accountants, high turn-over cfo's, blaming shorting, change core business, high p/e, vulnerable catalyst, uptrend stalled/reversed
    62. Use options to express stock's expectation
    63. sell otm puts for to be longed stocks
    64. research reports tend to be biased
    65. the universality of success.
  2. you miss one very important lesson: IBM vice president.

    Did you read Steve Cohen who took a position before IBM released its earnings report?

    Think about it, who takes a large position just before an earnings report?

    Answer: the one who has insider information.

    A wizard who was not written about: the Sri Lankan guy who managed Galleon hedge fund.

    All the other stuff like "trading your personality" is pure BS, don't buy it. The author of the wizard books is a miserable failure in trading. He started by stealing those wizards' trading strategies, he pretended he was a journalist interviewing them, he asked all kinds of questions, trying to find out the "secret" of trading. Those wizards, finding it amusing that this media guy simply walked in and expected to get the secret of trading, just dished out all kinds of bs to him. Those wizards were never serious about what they said to the fake journalist. A lot of the things they said were simply jokes.

    He traded those "secrets" and lost all his money. So he turned around and wrote those "secrets" into books. Accidentally, he made lots of money out of the books, thanks to the suckers like you.
  3. u r strange. me just doing ETers s favor, expressed no opinion about the list. i got the book from lib by the way.
    how is YOUR trading?
  4. Posts like this worth the time spent browsing ET threads. Good work!
  5. ET99


    right on the nail!
    tradersxchange secrets with trading buddies, not a journalist,LOL.
    but people swallow it hook, line and sinker. just do a search on this forum and you will find many "knowledgeable" traders recommend his books to eager newbies.
  6. Redneck



    You took the time to pare down and post some good ole common sense – “food for thought”… and simply cite its origin

    How others interpreted your intentions as they did is peculiar to say the least


    For any anyone to think they will not trade exactly who they are inside (their personality) – is ludicrous imo

    As for the list you posted – some I agree…, and some I don't…., but then that is the real beauty of trading – isn’t it….

    No one way is best for all.

    Good trading to you Sir

  7. bozwood


    he may or may not have had inside information, but if you think fund managers of all stripes don't take positions before earnings announcements, completely without inside info, you are naive.

    To the OP, nice list.
  8. Thanks Rn. almost everything people does reflects his/her character and personality, including trading and posting on ET. You can feel if the person is a winner or loser, if not at the very moment, but will be at long term.
    #10     Jan 10, 2010