The Little Book of Market Wizards audiobook cover - Lessons from the Greatest Traders

The Little Book of Market Wizards

Lessons from the Greatest Traders

Jack D. Schwager

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Personal DevelopmentEntrepreneurshipCareer & SuccessMoney & Investments

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Mind Map

The Little Book of Market Wizards
Match Strategy to Personality+
Persist Through Failure+
Prioritize Risk Management+
Cultivate Extreme Patience+
Remain Highly Flexible+
Control Internal Emotions+
Embrace the Intellectual Challenge+

Quiz — Test Your Understanding

Question 1 of 7
What is the most important step for aspiring traders to succeed, according to the experiences of Michael Marcus, Jim Rogers, and Marty Schwartz?
  • A. Memorizing historical market charts and trends.
  • B. Adopting the exact strategies used by top hedge fund managers.
  • C. Finding a trading methodology that aligns with their own personality and risk tolerance.
  • D. Focusing exclusively on long-term, fundamental-based macro-trends.
Question 2 of 7
How do the Market Wizards view early failures in a trader's career?
  • A. As a clear indicator that the individual lacks the innate talent for trading.
  • B. As a normal and necessary part of the learning curve that should be treated as a lesson.
  • C. As a sign that the trader needs to immediately switch to a completely different asset class.
  • D. As an anomaly that only happens to traders who ignore fundamental analysis.
Question 3 of 7
To avoid the 'sunk-cost fallacy,' what key risk-management principle did Bruce Kovner implement?
  • A. Setting a predefined maximum tolerable loss before even entering a trade.
  • B. Averaging down on losing positions to reduce the overall break-even point.
  • C. Selling half of the position whenever the market opens lower than the previous day.
  • D. Relying entirely on end-of-day data to decide when to exit a trade.
Question 4 of 7
According to trading luminary William Eckhart, what is the biggest reason why traders fail?
  • A. Taking on too much leverage during volatile markets.
  • B. Exiting prematurely from a winning trade and limiting their reward.
  • C. Staring at intraday price quotes and over-trading.
  • D. Failing to define an exit point before entering a position.
Question 5 of 7
What does Colm O'Shea's shift in perspective during the 2009 financial crisis demonstrate about successful trading?
  • A. The necessity of sticking to a bearish thesis during global economic downturns.
  • B. The importance of rapidly adapting one's market outlook to align with new, contradictory evidence.
  • C. The value of relying heavily on technical analysis over fundamental macro-economic data.
  • D. The danger of letting emotions dictate when to enter or exit a highly volatile market.
Question 6 of 7
How does Steven Cohen suggest a trader should handle a large position that is causing them fear and impairing their judgment?
  • A. Close the position entirely and take a break from the markets.
  • B. Hold the position and practice stoic detachment until certainty is reached.
  • C. Hedge the position by buying options in the opposite direction.
  • D. Sell half of the position to relieve pressure while retaining some exposure.
Question 7 of 7
According to the final summary, how do the pros advise approaching the financial markets?
  • A. As a fast-track quest for building generational wealth.
  • B. As a highly mathematical system that can be solved with the right algorithm.
  • C. As a competitive game and an intellectual challenge to be mastered.
  • D. As a casino where luck and inside information dictate the ultimate winners.

The Little Book of Market Wizards — Full Chapter Overview

The Little Book of Market Wizards Summary & Overview

The Little Book of Market Wizards (2014) distills decades of wisdom from iconic traders, sharing key insights on strategy, risk management, and mindset. Based on interviews with hedge fund managers and commodity traders who've generated huge returns, this book is packed with engaging anecdotes to teach you how persistence, flexibility, and emotional discipline will let you excel like the pros. 

Who Should Listen to The Little Book of Market Wizards?

  • Aspiring or experienced traders
  • Finance professionals
  • Individuals trading on their own and looking to improve results

About the Author: Jack D. Schwager

Jack D. Schwager is a respected market expert who has written several acclaimed books profiling top traders across several markets. His bestselling Market Wizards series is based on in-depth interviews with over 50 of the world's most successful traders. Schwager has been trading, researching, and writing about markets for over 40 years, and is currently the co-portfolio manager for ADM Investor Services’ Diversified strategic fund. 

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