6/14/2026 - With the recent release of the latest Market Wizards book, my latest project is a review of all the Market Wizards books alongside a review of books written by accomplished traders. This is known in academic circles as a "literature review" and the goal is to capture the state of knowledge in a field and also identify questions/issues that remain unanswered.
It's clear that the Wizards trade very different markets and trade in very different ways over very different time frames. To use an analogy, great singers don't sing the same songs and they don't sing the same way. Something else makes them great. There's a talent element, and there's also a process they've gone through to cultivate that talent and build the necessary skills and experience.
What we see among the Wizards--and what I believe gets them to that next level of performance--is immersion in markets. They don't just work hard; they live and breathe markets. And it's not that they live and breathe trading; rather, they absorb themselves in the pursuit of opportunity. This is apparent in the interview with Mark Minervini in the Stock Market Wizards book. He is fully immersed in the hunt and, yes, he has his trading methods and his ways of managing risk and reward. What makes the Wizards truly special, I believe, is the degree to which they internalize what they do. It is not unlike an Olympic athlete or world-class concert pianist who are immersed in practice every day.
Constant working out produces unusual strength. The market greats have such a passion for what they do that they are always working out. Average traders are forever looking for the next video, the next secret trade setup, the next secret sauce. Their very search for easy answers tells you that they lack what it takes to be a Market Wizard.
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6/12/2026 - Getting to the next level of trading performance doesn't necessarily mean getting bigger and bigger. Very successful traders get broader and broader and find opportunities in different markets and different regions of the world. There's a way of getting broader, however, that I especially notice among teams and traders that have excellent risk-adjusted returns. They not only make money, but do so consistently. They are able to make money in different market environments.
Many traders define opportunity as directional movement. When markets are not trading in trends, they assume that those markets are "noisy", "choppy", and untradeable. Nothing could be further from the case. Two sets of opportunities appear in slow and choppy markets:
1) Movements in relative value - Traders will be long one instrument and short another closely connected one to take advantage of occasions where one moves too far relative to the other. For instance, the entire stock market may be trading in a range, but value stocks (SPYV) will be strong relative to growth stocks (SPYG). This can occur when weak buyers are getting out of the growth names. Buying growth stocks and selling value stocks, adjusting the pair for volatility, profits from occasions where the two groups get more in line. The overall market can go up or down, but as long as your pair moves the right way, you profit. This is a common strategy in interest rate markets when central banks are not in play. Flows will take one bond higher relative to a nearby instrument and the RV trader can play for the two to come back in line.
2) Cyclical movement - Many markets that aren't trading in trends display dominant cycles. These can be intraday, short-term, and longer-term. Often there are cycles within cycles, which greatly aid in entry and exit execution. John Ehlers' work is particularly helpful; an amazing set of resources can be found here. My experience is that even trending, directional markets display cyclical elements. Understanding those is very helpful in timing. Conversely, truly choppy/noisy markets are often dominated by short-term cycles, which can provide opportunities for active traders.
A true sign of mastery is the ability to sit back, see how a market is trading, and then utilize the tools to take advantage of the environment. Frustrated traders frequently lack those tools.
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6/11/2026 - A marriage lasts for decades and flourishes, not because there aren't problems and challenges, but because there is such a deep sense of love that the setbacks simply become opportunities to collaborate and approach things in new and different ways. We can see in the Market Wizards books that the great traders fall in love with markets and cultivate unique approaches to finding and managing risk and reward. They truly *love* what they do, which is why they pursue it passionately. It is out of that love that they dig and dig and discover what others miss.
It's tempting for new traders to look for answers from others and simply try to copy their techniques. No Market Wizard has reached their status by copying other Wizards...greatness cannot be found in following the same "setups" and indicators that others look at. Copying others cannot bring the passion and meaning of finding one's own edges that express the deep fit between who you are and what you do.
Your true edge is an expression of who you are: how you see and act upon things. When we fall in love with what we do, setbacks are not threatening. We succeed because of commitment, not because of "motivation".
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6/10/2026 - Often, it's the less sexy parts of trading that lead to the greatest performance improvements. It's great coming up with new trade ideas and opportunities and that is essential to success. What gets many traders to the next level, however, is work on the execution of their ideas.
Once you figure out that the market is likely to move in a particular way, how do you enter that trade so that your reward is maximized relative to your risk? Good execution is the beginning point of sound risk management. Also, when we have sound execution criteria, we achieve clarity in the trade, which is essential to a positive trading psychology.
I have found it to be helpful to get into a long trade *after* I believe the market has found a bottom and to go short *after* I believe we've seen a top. That means that sound execution is based upon how the market is behaving. It's not based on our predictions.
For instance, the market will be strong, get to an overbought point, and then sell off. The sell off occurs on weak breadth, which means that the majority of stocks retreat from their highs. I then look at the very short-term indicators of buying/selling to see if the subsequent buying fails to bring us to new highs and fails to bring the majority of stocks meaningfully higher. For example, we will get a bounce in the NYSE TICK and we will get to an overbought point on an intraday measure such as RSI with prices failing to make new highs and that is where I want to sell. The prior high is a natural stop level and the market is telling me that the buyers are no longer in control.
The advantage of such execution is that we know clearly where we are wrong and can get out quickly, easily, and without too much of a loss. We can also use medium-term oversold levels to identify areas for taking at least partial profits and we can use subsequent weak bounces to add to our position, using prior highs as trailing stops.
Our work on execution gives us a sense of control and understanding, both essential to a winning mindset. As noted below, the right strategy is necessary but will not win without the right tactics.
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6/9/2026 - The most successful people I've worked with in markets combine strategic thinking--a vision of the big picture--with tactical thinking, a sense for here-and-now opportunity. This is not so different from success on the battlefield, where a sound strategy is necessary, but must be implemented tactically: in the right way at the right time. Similarly, a basketball team will pursue a strategy to take advantage of an opponent's weaknesses, and will look for tactical situations to press this strategy.
Pursuing short-term opportunity without a grounding in strategy leads to small gains punctuated with periods of getting run over. Pursuing a good strategy without the patience to wait for the right tactical implementation leads to getting shaken out of good ideas.
The successful market participants are investors--they are invested in ideas--and they are traders: they know how and when to press those ideas.
Success is one part vision, one part patience. When the strategy doesn't line up with opportunity, the great trader can wait. When the strategy and opportunity align, the great trader can go for it.
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6/8/2026 - In this series of posts, we'll take a look at best trading practices that contribute to long term success. The first best practice is utilizing time effectively when you are *not* trading. There are always slow periods in markets, and there are always periods when you just need to let your trades play out. During those periods when you're not trading, how productive is your time? Do your activities during slow portions of the day and before and after market hours contribute to your trading success?The best traders I've worked with are actively engaged in markets when they are not trading. They are looking for--and testing--new trading edges. They are talking with other traders and picking up on market sentiment and news they might have missed. They are reading research reports; they are conducting their own studies; they are reviewing fresh market opportunities. In short, the best traders are just as immersed in idea generation as they are in placing and managing risk.
Many, many traders crave stimulation and can't tolerate any feeling of inactivity and boredom during the day. That leads them to trade when they have no documented edge. Such overtrading is not a function of fear and greed. It results from the need to fill a void: the need for excitement. The best traders have well-developed lives outside of market hours and don't need markets to provide them with stimulation. They are free to use their time searching for fresh ideas and researching new edges because they find the discovery process itself to be stimulating. They also get stimulation from their personal activities and relationships and don't need to get it from taking risk in markets.
A great way to identify excellent traders is to see what they do when they are not trading. Productive non-trading time builds the mindset...and ultimately builds the trading.
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