Ed Seykota On Technical Analysis

Click here

Ed Seykota On The Growth Of A Trader

"I don't think traders can follow rules for very long unless they reflect their own trading style. Eventually, a breaking point is reached and the trader has to quit or change, or find a new set of rules he can follow. This seems to be part of the process of evolution and growth of a trader."

Ed Seykota

Ed Seykota's Trading Song

Ed Seykota And Systems Trading

"Ed Seykota, or his full name Edward Arthur Seykota, is a well known commodities trader who was born on the 7th August 1946. He lives in Incline Village, Crystal Bay in Nevada. When Ed Seykota, trading expert, was young the high school he attended was near The Hague in Netherlands and he also resided in Voorburg at one stage. He earned himself BSc degrees in two different departments, management as well as Electrical Engineering during the year of 1969. It was in 1970 that Ed Seykota found what we know today as “Systems” trading. He did so by using the very old punch card computers when he needed to test his brilliant ideas on trading certain markets.

In the beginning, when Ed created “Systems”, he did so for the brokerage place that he and his friend Michael Marcus worked for. After a few years of partnership, Ed decided that it would be better to go his own way. He did so and went on to take care of some clients accounts on his own. The main reason he become so successful was due to his development and his making use of mechanized trading systems, which he tested firstly on a quiet mainframe IBM PC. After he had achieved this, the brokerage house he used to work for took on his system for their own trades and personal use.

Ed Seykota was always interested in developing a computerized system, and when he finally read the letter written by Richard Donchian, his ideas just spawned. The letter included information on making use of mechanical trend subsequent systems for certain types of trading. What also inspired Ed Seykota, trading expert, was the book called “Reminiscences of a Stock Operator”. After reading this book he was a lot more confident about what he had to do and how he should go about it. It wasn’t long after that when Ed’s first trading system was created solely on exponential moving averages. He of course was very proud of his achievement; he did so well, he had every right to be.

Many people find inspiration in this man and what he says. For example, many people refer to his quote “Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible”. Many people take that saying and use it for their own personal issues, just changing the words and making it fit their own life style. After some time, Ed had improved his system by becoming accustomed to fit his own favorites and his own style of trading. The original version of his system was rather rigid, but over a short period of time he brought in more regulations into the system as well as new funds management algorithms and pattern triggers.

Another reason Ed Seykota, trading expert became so successful was because he genuinely loved trading as well as his hopeful manner. He never changed any of his reply indicators. He rather kept it all the same and instead he paid more attention to market stimuli."

EdSeykota.net

Ed Seykota On Trading

"Pyramiding instructions appear on dollar bills. Add smaller and smaller amounts on the way up. Keep your eye open at the top."

"It can be very expensive to try to convince the markets you are right. Markets are fundamentally volatile. No way around it. Your prolem is not in the math. There is no math to get you out of having to experience uncertainty."

"Here’s the essence of risk management: Risk no more than you can afford to lose, and also risk enough so that a win is meaningful. If there is no such amount, don’t play."

"To avoid whipsaw losses, stop trading."

Ed Seykota

Ed Seykota: Fundamentals Are Usually Already Discounted By The Market

"Fundamentals that you read about are typically useless as the market has already discounted the price, and I call them " Funny - Mentals". However, if you catch on early before others believe, then you might have valuable (surprise-a-mentals)."

Ed Seykota

Ed Seykota: Everybody Gets What They Want Out Of The Market

"Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.

I think that if people look deeply enough into their trading patterns, they find that, on balance, including all their goals, they are really getting what they want, even though they may not understand it or want to admit it."

Ed Seykota

Ed Seykota: The Market Is Always Right

"If you want to know everything about the market, go to the beach. Push and pull your hands with the waves. Some are bigger waves, some are smaller. But if you try to push the wave out when it's coming in, it'll never happen. The market is always right."

Ed Seykota

Ed Seykota: The Aha! Process Lies At The Heart Of Price Change

"The aha! process lies at the heart of price change. For instance, consider the series: OTTFFSSE. What is the next letter? This puzzle creates tension - until you see the first letters of the ordinal numbers - one, two. Aha! you say.

A lot happens during an aha. The puzzle dies and the tension dissipates. A societal aha! drives price. Read the newspapers and the news magazines during a major move. At first, no one gets why the move is happening. There's a lot of confusion. Part of the move's way up, some people get it. At the end, everybody gets it. The tension is resolved and the move ends."

Ed Seykota