The New Market Wizards
What the best traders know
Description
In the early 1990s, a former research director for a commodity brokerage sat down across from some of the most successful traders alive and asked them the questions the rest of us never get to ask. Jack Schwager had already done this once, in 1989, with a book called Market Wizards that became an underground classic among people who move money for a living. The New Market Wizards, published in 1992, is the follow-up: a second round of long, patient conversations with traders who had turned modest stakes into fortunes, and who almost never talk to outsiders.
The premise is disarmingly simple. Instead of building a system and selling it, Schwager goes looking for people who already win, and lets them explain themselves in their own words. He talks to futures traders, options specialists, a physicist who quit science to trade, a man who turned a few thousand dollars into millions and then lost most of it and made it back. The interviews are specific, sometimes technical, often funny, and they refuse to resolve into a single method.
What emerges is stranger than a formula. The traders disagree about almost everything — timeframes, indicators, whether markets are random — yet they keep circling back to the same handful of ideas, and none of those ideas is a chart pattern. The book is less a manual than a group portrait of a rare temperament, assembled one conversation at a time.
The question we’re asking : What do consistently successful traders actually share, once you strip away the systems they each swear by?What we’ll see : How a set of interviews with market outsiders keeps pointing away from technique and toward something harder to copy.
Table of contents
01Chapter 1 — The interviews nobody in finance could resist
Schwager's method is the whole trick. He is not a journalist chasing a scoop and not an academic testing a thesis. He had spent years inside the industry, which meant he could sit with a trader and follow the conversation into the weeds — the mechanics of a spread, the logic of a stop, the feel of a position going wrong — without needing anything translated. That fluency is why the wizards talked. They could tell he understood the work, so they stopped performing and started explaining.
The cast is deliberately mixed. There is Bill Lipschutz, who ran one of the largest currency operations at Salomon Brothers and describes moving hundreds of millions without visible panic. There is Randy McKay, who parlayed a small futures account into a large fortune over two decades. There is Monroe Trout, whose returns came with almost freakishly low drawdowns, and Blair Hull, who applied blackjack card-counting logic to options pricing. Each arrived at success by a different door.
02Chapter 2 — Being right is not where the money is
The first surprise for most readers is how little the wizards care about being right. The amateur assumption is that trading is about prediction — call the direction correctly, collect the reward. The traders Schwager interviews keep dismantling this. Several of them are wrong more often than they are right, and they say so plainly. What separates them is not accuracy but what they do with a position once it exists.
The recurring idea is asymmetry. You cut losses fast and let winners run, so that the trades you get wrong cost little and the trades you get right pay for all of them. Randy McKay describes this as the whole game. It sounds obvious until you notice how completely it inverts the instinct to grab a small profit and cling to a losing position hoping it comes back. The wizards do the opposite of what feels comfortable, on purpose, repeatedly.
03Chapter 3 — The mind does most of the trading
The deeper the interviews go, the more they turn psychological. Schwager expected to be told about methods, and he gets them, but the traders keep drifting toward the interior life of the work — discipline, patience, the capacity to sit still, the ability to act against one's own fear at the exact moment it peaks. The technical edge, several of them insist, is the easy part. The hard part is being the kind of person who can execute it when real money is bleeding.
Charles Faulkner and the trading-psychology material that Schwager weaves in make this explicit. He interviews people who study how top performers think, and their observations mirror what the traders describe: winners frame losses as feedback rather than as verdicts on their worth, they rehearse their process rather than fixate on outcomes, and they have somehow decoupled their sense of self from any single result. A losing trade is information; it is not an insult.
04Chapter 4 — What the wizards refuse to sell
Step back from the individual interviews and the book is making a quiet argument about knowledge itself. The reader who comes to The New Market Wizards hoping for a transferable secret leaves without one, and that absence is the point. The traders are generous with their thinking and stingy with anything that could be lifted whole, because there is nothing to lift. Their edge is not a possession; it is a way of operating that took each of them years to build and that fits their particular temperament.
This is why Schwager's traders contradict each other so freely. One swears by fundamentals, another by pure price action, a third by statistical arbitrage that treats the whole question of why the market moves as irrelevant. If there were a single right method, these people — some of the best in the world — would have converged on it. That they haven't tells us the winning variable is not the method but the fit between a method and the person running it, executed with discipline over enough repetitions for an edge to express itself.
05Conclusion
By the end of the interviews, the reader has met a dozen very different people who arrived at the same small set of truths from opposite directions. Cut losses, let winners run, control risk before return, wait for the right moment, and above all keep your own psychology from sabotaging you. Schwager never lines these up as commandments; they simply accumulate, stated and restated by traders who otherwise agree on almost nothing, until they feel less like advice than like the shape of the terrain itself.
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