Jack Schwager

Schwager explains that unlike many of the traders he would later interview, he never planned to be in markets. An Ivy League economics grad who expected to find work immediately, he placed a $15 classified ad in the New York Times asking for any analytical role and received 15 responses — 14 of them sales schemes. The one legitimate call was for a commodity analyst position. In the interview, asked what he knew about commodities, he answered 'gold' — embarrassingly little. He spent a week in a Brooklyn library absorbing everything on copper from yearbooks and trade publications, wrote an article that circulated around the office, and was told afterward that everyone said 'pick this guy.' Writing had already become the skill that opened every door.

"I said something like 'gold' — and it's embarrassing how naive I was. But I spent a week in that library reading everything I could on copper, and it was that article that got me the job."

Schwager describes what commodity research actually looked like in the early 1970s, before screens or PCs. Assigned four markets — sugar, cotton, cattle, and hogs — he constructed supply-demand models by hand using USDA statistics, import-export data, and historical prices. Regression analysis was done on a hand calculator. Prices were tracked on ticker boards that clicked as they changed. His output was a weekly market letter mailed to brokers and clients. The entire process was fundamental economic analysis with no technical tools whatsoever — and he was actively dismissive of chart analysis, as any academic-trained economist of the era would be.

"You didn't have any screens, you didn't have a computer. You had those huge boards in the front of the room that would click as the price changed."

After twelve years in the business, Schwager decided no good textbook on futures market analysis existed and took a sabbatical to write one — with no commercial ambition, just wanting the best possible reference. He spent a year writing nearly 800 pages by hand; a planned single chapter on regression expanded to six because he could not explain it without first building the statistical foundation. The book's credibility and reach led directly to the Market Wizards concept. When it published, a Wall Street Journal review by Stanley Angrist sold out the first printing overnight — but the publisher took months to reprint copies, blowing the initial momentum. Despite that misstep, the book has continued to sell year after year.

"I just wanted to write the best textbook on analysis of futures markets. The idea of selling a lot of copies was not in my mind at all."

Schwager explains the central mission across all five Market Wizards books: finding what explains why some traders succeed where so many others do not. The answers had to have long-term truth — principles that stayed valid as markets transformed from open-outcry pits to electronic trading, from no computers to supercomputers, from few quants to entire firms of them. His model was Reminiscences of a Stock Operator, written about Jesse Livermore in the 1920s but still resonant when Schwager read it 65 years later. The explanation for why trading wisdom stays relevant across such radically different market structures is simple: what does not change is human nature.

"What makes you successful where so many other people aren't? The answers to that are things that have long-term truth — which stay true even though markets change tremendously. What doesn't change is human nature."

For Unknown Market Wizards, Schwager focused on solo traders nobody had heard of. One of the book's most extraordinary subjects — a trader who turned $5,000 into $250 million — emailed him out of the blue years earlier; Schwager filed it, started the book, contacted him, and received verified monthly brokerage statements going back nearly twenty years. Others came through FundSeeder, a trading analytics platform, or via Twitter. Peter Brandt, a close personal friend, was included specifically so his market wisdom could be preserved for posterity. A universal technique across all books: offering every subject the right to review the final draft before publication, which made people far more willing to speak openly.

"I'll let you see a copy of the final draft, and you can review it — if there's anything wrong we can change it. That assurance was helpful in getting the interview, but more importantly in getting them to be open."

Schwager worked exclusively as a fundamental analyst until he noticed that his colleague Steve Kroll, the one technical analyst in the group, was more right than wrong more consistently than anyone else. That forced him to take it seriously. The deeper insight: fundamental analysis is structurally incompatible with risk management. If you're bullish on wheat at $5 and it drops to $4.50 with fundamentals unchanged, the rational fundamental response is to buy more — exactly the opposite of what risk management requires. Technical analysis solves this cleanly: if price goes against your analysis, the analysis is by definition wrong, giving you a natural, unambiguous stopping point regardless of whether you trade with the trend or against it.

"Fundamental analysis is, in many ways, very difficult to make compatible with risk management. The more things go against you — if the fundamentals don't change — the more it would have you adding to the position. That's exactly the opposite of what you should be doing."

Schwager describes the challenges of interviewing traders who gave him minimal time — Richard Dennis and Ray Dalio each gave him only one hour, twice. His most intense experience was Tom Baldwin, a pit trader executing Morgan Stanley-sized bond volume for his own account, interviewed on St. Patrick's Day in Chicago when everyone was heading to the bars. Schwager felt like 'a photographer trying to get a picture of a rare bird about to fly away.' He had to have the next question ready before Baldwin finished answering. His universal interviewing approach: have a real conversation, not a pre-scripted question list. Listen to answers and follow interesting tangents — they almost always lead somewhere better than the prepared question would have.

"I felt like a photographer trying to get a picture of a rare bird that was about to fly away in an instant — I had to have another question ready before he could even finish answering the last one."

Schwager draws a clean line between gambling and trading. Gambling structurally puts the odds against you — the house always has the edge. Successful trading is the opposite, but only if the edge is real, definable, and understood. He cites Bob Dylan's line 'you can't win with a losing hand' as the clearest expression: you must know what gives you your edge or you are gambling regardless of what you call it. Beyond edge, nearly every wizard Schwager interviewed shared one trait: they genuinely loved trading as a puzzle or game — not for the money, but for the intellectual challenge. Bruce Kovner called it three-dimensional chess; Jim Rogers described it as a puzzle where pieces are constantly being swapped out.

"You can't win with a losing hand — and it's not obvious to a lot of people, but you have to understand what your edge is. If you don't have some reason why you can beat the built-in edge against you, you cannot win."

Schwager answers clearly: no. Just as not everyone can be a great athlete or musician, not everyone can be a great trader. Many of the wizards he interviewed had genuine innate market intuition that analytical work simply could not replicate. His clearest example: when Schwager was deeply bullish on cotton based on exhaustive historical research, Michael Marcus said it would go far higher — not because of better data, but because he intuitively understood that China's first year as a cotton buyer was the single variable that mattered. The price went from 25 to 99 cents. Schwager had the analysis; Marcus had the insight. The trader who turned $5,000 into $250 million got into markets for the wrong reason — money, not love — but succeeded because of an innate ability to spot trends before others could.

"He didn't do any of the analysis I did — but he just knew that the fact that China was a buyer that year was the key. And he stayed bullish for months and months while the price kept going."

Schwager addresses the widespread 1% risk rule and acknowledges it is sound advice for most traders most of the time — but identifies a critical exception documented repeatedly across all five books. When conviction is very high and opportunity is clear, the great traders step on the accelerator. He tells the Druckenmiller story: when Druckenmiller showed Soros a billion-dollar position in the Deutsche mark ahead of German reunification, Soros asked 'you call that a position?' Schwager also describes Soros's Plaza Accord trade — when the yen surged 700 points overnight, Soros stopped traders from taking profits: 'The Fed just told me the yen is going up for a year. Why would I sell it on the first day?' Druckenmiller credits Soros with teaching him it is important to be a pig when the opportunity is there.

"Soros asks him 'how big's your position?' He says a billion. Soros says 'you call that a position?' — if you're that sure, why do you only have a billion on?"

Schwager offers his most precise definition of trading intuition: it is subconscious experience, not instinct pulled from thin air. When a skilled trader has a hunch, it is triggering pattern recognition from thousands of past market situations they cannot consciously identify — the connection is real even if it is invisible. He then adds a counterintuitive dimension: for some traders, the signal to act is recognizing that their emotional response is wrong. One wizard described how an urge to triple up on a winning gold position was a reliable indicator that a reversal was imminent. Schwager shares his own Swiss franc story: recognizing that he did not want the market to reach his buy point — and forcing himself to leave the order on — led to a successful entry.

"Intuition, in my mind, is subconscious experience. When you have a hunch, it's not pulled out of thin air — it's triggering something from your experience that you may not consciously recognize, but it's there."

If Schwager could give traders a single piece of advice in ten words, it would be Bruce Kovner's rule: 'Know where you will get out before you get in.' The reason this is so critical is about objectivity. The moment you enter a position, you lose it — every subsequent piece of news gets filtered through the lens of what you want to happen. You rationalize, you hesitate, you make excuses. But before you enter, you have no horse in the race: you are thinking completely clearly. Deciding the exit at that precise moment of pure objectivity is the only time the decision is made without emotional distortion. Define the risk before you take it, and the agonizing 'should I stay or exit' question is already answered before it can become a problem.

"The only time you have true objectivity is when you do not have a position. The minute you put that position on, you've lost your objectivity."

Schwager revisits some of the extraordinary track records he has encountered across five books, including Bonnie Schwartz who made roughly 25% per month for nearly a decade — documented and real. He explains why this does not compound to an absurd fortune: traders like Schwartz could not let accounts grow because they would start moving the market against themselves. Many pull capital out consistently and keep trading size flat. At larger AUM, percentage returns necessarily compress because the manager becomes a price factor. The trader making 300% per year on $50,000 simply cannot replicate that at $5 billion — and that is not a failure, it is a structural reality of how markets work.

"He was making 25% a month over nearly ten years. I know a lot of people are thinking — why doesn't he have one-fifth of the GNP? Because he wasn't compounding. He kept pulling the money out."

One observation from Unknown Market Wizards: traders who set monthly profit targets consistently underperform. The reason is mechanical — any approach will have months with abundant opportunity and months with very few. Forcing trades when the market is not offering them is precisely how you destroy a genuine edge. The market does not care about your targets. On what changed from the first Market Wizards to the latest: the core findings were essentially unchanged. Electronic trading, computers, quantitative firms, and new markets transformed the infrastructure but not the principles. What made traders great in 1989 — discipline, genuine edge, risk management, love of the game — still makes traders great in 2023.

"The market is not a machine that constantly favors every particular approach every month. If your mindset is 'I'm going to make the same percent every month,' you'll find yourself taking trades you shouldn't take."

Schwager compares crypto to the dot-com bubble: a handful might survive and thrive, but most will ultimately be worthless — and that does not mean they were not tradable in the interim. NFTs had all the hallmarks of classic mania. The GameStop episode is his cleanest illustration of why the efficient market hypothesis is wrong: a stock moving from $20 to $500 with no fundamental change, then returning to $20 within months, cannot be reconciled with market rationality. DJT stock trading at billions with negligible revenue is a similar case. Schwager notes a telling signal in the options market: when puts are dramatically more expensive than calls — as they are in DJT — the market itself is signaling the irrationality.

"GameStop goes from 20 to 500 with no real change in anything — and then it goes right back down. That is what the market looks like when it is being driven by human emotion, not by value."

Schwager explains why traders have such fierce convictions that only their approach works — and why they are simultaneously right and wrong. Jim Rogers's famous line ('I never met a rich technician except those that sell their services') reflects a framework built on pure fundamental analysis that created his wealth. Bonnie Schwartz did the exact opposite: spent ten years as a fundamental analyst losing money every year, then got rich as a technician. Both are right about their own approach; neither is right about dismissing the other's. Schwager's conclusion: successful traders ultimately trade their personality. Finding an approach that genuinely fits your temperament is more important than finding the abstractly 'correct' method.

"Fundamental analysis works for Rogers. Technical analysis works for Schwarz. It goes down to being critical that every trader find an approach that works for them — and understand that people with the completely opposite approach can also make it work."

Schwager traces trend following from Ed Seykota's era in the late 1960s — when running a simple moving average program on a brokerage firm's mainframe over the weekend was so unusual that the edge was enormous — to today, when every retail trader has access to the same tools and concepts. As trend following became widely known and universally taught, the edge degraded: more practitioners created more fake breakouts and shorter-term counter-trend moves that made staying in trends far harder. The underlying rationale still holds — real supply-demand imbalances take years to resolve, so genuine trends exist — but the return-to-risk ratio has compressed substantially and drawdowns have grown.

"Once it becomes too popular, you start getting a whole bunch of fake breakouts and very short-term wild swings. The trends are still there, but they become choppier — and the edge that once printed money is now much smaller."

Schwager observes that the successful traders he visited rarely matched the lavish social-media image of trading — many were intensely focused professionals with structured routines built around their approach: Peter Brandt does his chart analysis every Friday without fail; traders in Unknown Market Wizards maintained detailed written reviews of every trade, reviewed monthly to reinforce lessons. Schwager admits he cannot remember where the term 'Market Wizard' came from — it sounded right and stuck. He closes with advice for interviewers: think in terms of conversation, not questionnaires. Listen to what the other person says and follow the tangents that open up. Strive for excellence in every aspect. And only do it if you genuinely love it.

"Think in terms of conversation — listen to what the other person is saying, because the answers will often lead to better tangents than the questions you planned to ask."

Schwager opens with Kristjan Qullamaggie — a security guard who turned $5,000 into over $100 million — as a lens for exploring how market wizards develop. He observes that many great traders developed an unusual passion for markets as early as high school, a rarity at that age. Nearly all went through a painful blowup early in their career, and Schwager argues this is not incidental: suffering a major loss imprints a visceral, lasting respect for risk that no textbook can replicate. Ray Dalio’s pork belly disaster — watching the market go limit-down against him for days — is cited as the formative experience that permanently shaped his approach. Some prop firms deliberately prefer to hire traders who’ve blown up, reasoning that those who haven’t don’t truly understand what they’re risking.

When asked to name the most important trait across all his Market Wizard interviews, Schwager leads without hesitation: risk management, in one form or another, is the single most common answer. The most concise formulation came from Bruce Kovner in exactly ten words: “Know where you’ll get out before you get in.” This rule forces traders to commit to a loss threshold before emotions enter the picture — at the moment of entry, rather than during a live losing trade when psychology works against clear thinking. Schwager notes that virtually every failed trader he’s encountered ignored this principle: they entered positions without a defined exit and improvised under pressure.

"Know where you’ll get out before you get in."

Schwager’s second key trait — one he considers underappreciated — is patience, which operates in two distinct modes. The first is the patience to wait for the right trade: resisting the urge to always be in the market and sitting out when conditions don’t meet your criteria. The second is staying with a position long enough to realize its full potential — many traders cut winners too early, locking in small gains while their best trades are still running. Schwager notes that holding through noise and drawdowns in a profitable position is psychologically harder than it sounds, and that traders who master this skill generate returns far above those who exit at the first sign of strength.

Schwager previews “Market Wizards: Next Generation,” co-authored with George Coyle — who, Schwager reveals, was the catalyst for the project, having pushed for a new book through their ongoing conversations. He discusses Kristjan Qullamaggie as a standout interview: a trader whose arc from security guard to $100 million captures the essence of what the series looks for — not just the outcome but the complete journey of failure, learning, and eventual mastery. The book marks the first time Schwager has worked with a co-author, and he credits Coyle’s involvement with both revitalizing his motivation and bringing fresh perspective to a series he has been building for decades.

Schwager highlights two traders with genuinely original edges. Chris Camillo built an extraordinary track record by analyzing consumer behavior trends on social media before they registered in financial data — betting on brands and sectors months before mainstream attention arrived — a method Schwager admits he would have dismissed as noise earlier in his career. Jimmy Balodimas, a veteran of the trading pits, uses auction-market theory to read price as a dynamic negotiation between buyers and sellers, understanding inventory and price acceptance in ways most screen traders never develop. Balodimas also exemplifies trading around a core position: adjusting size as the trade moves rather than treating entry and exit as binary decisions. Both traders demonstrate that original edge-identification is still possible for those willing to think differently.

Asked which Market Wizard styles translate best for disciplined retail traders, Schwager is candid: most great traders are deeply individualistic and their methods don’t transfer well. Ed Thorp’s mathematical arbitrage, for instance, requires a quant background few possess. But Schwager identifies growth stock and momentum-based approaches — grounded in O’Neill’s CANSLIM principles — as among the most learnable because they are rule-based, systematic, and driven by observable market data. The key is that these approaches have a codifiable logic: specific criteria for entry, defined stop levels, and a clear process for identifying candidates. For traders willing to put in the work, these styles offer a realistic path to edge.

Schwager describes a research approach that balances preparation with openness: he learns enough about a trader to understand their style and ask informed questions, but deliberately avoids over-preparing in ways that might anchor the conversation. For high-profile traders with public records, he reviews available interviews and writings. For the unknown traders who increasingly populate his books — private individuals with no public presence — he often goes in nearly cold, letting the conversation reveal the person organically. He notes the interview itself is a small fraction of total work: the real time goes into pre-interview research, post-interview transcript analysis, and the craft of shaping raw conversation into a readable narrative.

Schwager explains how the Market Wizards series began almost by accident: working as a research director, he knew many top traders personally and pitched a book as a way to capture their methods in one place. He was surprised to find almost no resistance — the first book came together with remarkably few rejections, largely because existing relationships opened the right doors. He never intended to write a series; a second volume only emerged because the first succeeded. He also discusses the interview that always eluded him: George Soros. Despite multiple attempts over years, Schwager never got past Soros’s gatekeepers, leaving what he considers one of the most compelling untold stories in market history.

The most striking feature of the upcoming book is the age of its subjects: nearly all are under 40, with most in their 30s — the youngest cohort Schwager has ever profiled. The book includes a higher proportion of traders who leverage data sources unavailable to previous generations: social media sentiment, short-side small-cap strategies, and algorithmic pattern recognition. When discussing how he identifies traders for inclusion, Schwager describes two filters: extraordinary absolute returns from a small starting amount (the story filter), or exceptional risk-adjusted metrics like Sortino ratio with controlled drawdowns (the performance filter). Rarely does a trader satisfy both criteria, but when one does, it is immediately obvious.

Schwager argues bluntly that win rate is the least important trading metric — because trading is not baseball, and being right more often than wrong says almost nothing about profitability. The traders he has been most impressed by often win on fewer than a third of their trades, yet generate exceptional compounding because their average winner is many times larger than their average loser. Obsessing over win rate leads to premature exits to lock in gains and holding losers too long to avoid being wrong — the exact opposite of sound practice. The right question is always the magnitude of wins relative to losses, not the frequency of being right.

"The least important is batting average. It ain’t baseball."

Schwager discusses FundSeeder, a platform he co-founded to address a structural problem: talented traders without institutional backgrounds or pedigree have historically had no way to surface their track records to capital allocators. FundSeeder standardizes performance reporting — calculating Sortino, Sharpe, maximum drawdown, and other risk-adjusted metrics from uploaded trade data — so that a trader anywhere in the world can present their record on equal footing with an institutional candidate. The platform has attracted thousands of users globally, with some going on to secure allocations or fund employment. For Schwager, FundSeeder is the practical extension of what his books argue: great traders exist everywhere, and the barrier has always been access, not talent.

Schwager names flexibility as the single most underrated habit of elite traders: the willingness to change your mind when evidence shifts, even when you have high conviction. He illustrates this with Druckenmiller’s famous 1987 crash trade. Going into the crash weekend, Druckenmiller held a short position. On the following Monday — the single largest one-day drop in U.S. market history — he recognized the market was massively oversold and reversed his entire position to go long. Schwager uses this to reframe conviction: great traders don’t lack conviction, but they hold views as hypotheses rather than identity. Traders who can’t change their minds when the facts change are unlikely to achieve long-term success regardless of their other skills.

"When the facts change, you need to be able to change quickly."