This video provides a comprehensive summary of Jack D. Schwager's book "The New Market Wizards," focusing on the trading strategies, philosophies, and psychological insights of various successful traders. It covers key themes such as risk management, discipline, emotional control, systematic trading, and the importance of a probabilistic mindset.
In the "Misadventures in Trading" chapter, Jack D. Schwager discusses several pitfalls:
Bill Lipschutz and Stanley Druckenmiller approach risk management and position sizing in distinct, yet effective ways:
Bill Lipschutz:
Stanley Druckenmiller:
The core concept behind the "Turtle Traders Experiment" was to prove whether trading ability could be taught.
Legendary traders Richard Dennis and William Ehart believed that trading was a skill that could be systematized and taught, rather than an innate talent. They recruited ordinary individuals with no prior trading experience, provided them with a specific set of rules for a trend-following system in futures markets, and coupled this with robust risk management principles.
The experiment demonstrated that:
The core concept behind the "Turtle Traders Experiment" was to prove whether trading ability could be taught.
Richard Dennis and William Ehart, the founders of the experiment, hypothesized that trading success wasn't solely an innate talent but could be learned through a disciplined, rules-based system and rigorous risk management. They recruited individuals with no prior trading experience, trained them on a specific trend-following strategy for futures markets, and provided them with capital to trade.
The experiment demonstrated that:
Al Weiss's approach to technical analysis and the role of intuition in his strategy are quite distinctive:
Difference in Technical Analysis:
Role of Intuition in his Strategy:
In essence, Weiss uses a visually driven, pattern-focused technical analysis, where his intuition is not a standalone element but rather a highly developed sense honed by experience that informs his interpretation and execution of these patterns.