Timmy
white swans need love too
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- 30 September 2007
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Jack Schwager - Hedge Fund Market Wizards, the 4th in the 'Market Wizards' series. I haven't read it (yet), but I've found these promotional tweets from Schwager with some of his observations from the book. (I've edited the tweets for formatting but not content).
Also, there is a video interview with Schwager following.
#1 It is not about predicting what will happen but rather recognizing what is happening
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#2 How a trade is implemented is more important than the trade itself.
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#3 Flexibility is critical--Good traders liquidate when they are wrong; great traders reverse when they are wrong.
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#4 The best way to trade a bubble is from the long side… Bubble upmoves are smooth, post-bubble downmoves are erratic.
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#5 Money management discipline can be counterproductive if it is inconsistent with the trade hypothesis.
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#6 Traders often make the mistake of choosing stops as pain thresholds rather than price levels that disprove trade.
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#7 Many traders go wrong by failing to adjust exposures to changing market volatility.
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#8 Mistakes provide the path to improvement and ultimate success.
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# 9 Caution against trading out of a desire to make money or to reach a predetermined goal.
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#10 You are not a trader; you are a risk manager.
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#11 The breakdown of correlation between two markets often signals an impending price move.
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#12 One way to avoid significant losses: Define a max % loss limit for month and liquidate entire portfolio if reached.
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#13 The worst thing a trader can do is freeze; you need to know how you will respond in any situation.
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#14 Even technical traders can benefit by understanding the key fundamental driver likely to determine market direction.
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#15 The usefulness of fundamentals for timing is as contrarian indicator””the failure of mkt to respond as expected to news.
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#16 If bullish, buy the strongest market in a sector; if bearish, sell the weakest.
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#17 The failure of a mkt to respond as expected to price move in a correlated market can reveal inherent strength or weakness.
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#18 Limiting max loss per trade to predetermined small fixed % is one of the simplest and most effective risk control methods
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#19 Systems that do well across many mkts are more likely to continue to work than systems that only do well in a single mkt.
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#20 Most important rule to succeed in trading: Find a methodology that fits your personality and comfort level.
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#21 Sometimes the seemingly impossible is possible if approached from a completely different perspective
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#22 Part 1 In blackjack, betting more on high probability hands can transform a negative edge game into a positive one.
#22 Part 2 Trading Corollary: Varying trade size by confidence in trade can increase the trading edge.
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#23 Part 1 Emotions are deadly for trading.
#23 Part 2 the surest way to guarantee that emotions will impact trading decisions is to trade beyond your comfort level.
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Video interview:
Also, there is a video interview with Schwager following.
#1 It is not about predicting what will happen but rather recognizing what is happening
.
#2 How a trade is implemented is more important than the trade itself.
.
#3 Flexibility is critical--Good traders liquidate when they are wrong; great traders reverse when they are wrong.
.
#4 The best way to trade a bubble is from the long side… Bubble upmoves are smooth, post-bubble downmoves are erratic.
.
#5 Money management discipline can be counterproductive if it is inconsistent with the trade hypothesis.
.
#6 Traders often make the mistake of choosing stops as pain thresholds rather than price levels that disprove trade.
.
#7 Many traders go wrong by failing to adjust exposures to changing market volatility.
.
#8 Mistakes provide the path to improvement and ultimate success.
.
# 9 Caution against trading out of a desire to make money or to reach a predetermined goal.
.
#10 You are not a trader; you are a risk manager.
.
#11 The breakdown of correlation between two markets often signals an impending price move.
.
#12 One way to avoid significant losses: Define a max % loss limit for month and liquidate entire portfolio if reached.
.
#13 The worst thing a trader can do is freeze; you need to know how you will respond in any situation.
.
#14 Even technical traders can benefit by understanding the key fundamental driver likely to determine market direction.
.
#15 The usefulness of fundamentals for timing is as contrarian indicator””the failure of mkt to respond as expected to news.
.
#16 If bullish, buy the strongest market in a sector; if bearish, sell the weakest.
.
#17 The failure of a mkt to respond as expected to price move in a correlated market can reveal inherent strength or weakness.
.
#18 Limiting max loss per trade to predetermined small fixed % is one of the simplest and most effective risk control methods
.
#19 Systems that do well across many mkts are more likely to continue to work than systems that only do well in a single mkt.
.
#20 Most important rule to succeed in trading: Find a methodology that fits your personality and comfort level.
.
#21 Sometimes the seemingly impossible is possible if approached from a completely different perspective
.
#22 Part 1 In blackjack, betting more on high probability hands can transform a negative edge game into a positive one.
#22 Part 2 Trading Corollary: Varying trade size by confidence in trade can increase the trading edge.
.
#23 Part 1 Emotions are deadly for trading.
#23 Part 2 the surest way to guarantee that emotions will impact trading decisions is to trade beyond your comfort level.
.
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Video interview:
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