Oct 27, 2013

Some interesting quotes from Ed Seykota

(1) The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into your technical system. There are old traders and there are bold traders, but there are very few old bold traders.

(2) All trading has some kind of system. Most good systems following trends. Life itself is based on trends. Birds start south for the winter and keep on going.

(3) Fundamentals you read about are typically useless as the market has already discounted the price, and I call them "funny-mentals"

(4) What's important to me in any trade are (a) the long term trend; (b) the chart pattern; and (c) picking the right buy and sell. A distant fourth are fundamentals.

(5) I don't try and pick tops and bottoms

(6) Pride is a great banana peel... as are fear, hope and greed. My biggest slip-ups occurred shortly after I got emotionally involved with positions.

(7) The three elements of good trading are (1) cutting losses; (2) cutting losses; and (3) cutting losses. If you follow these three rules... you "may" have a chance.

(8) I handle losing streaks by trading smaller.

(9) I set protective stops as soon as I enter a trade. I normally move these stops to lock in profit as the trend continues. Losing a (profitable) position is aggravating, whereas losing your nerve is devastating

(10) My maximum equity at risk on any one trade is 5%

(11) My success comes from my love of markets. I am not a casual trader. It is my life. I have a passion for trading. It is not merely a hobby or a even a career choice. There is no question that this is what I am supposed to do in life.

(12) The trading rules I live by are (a) cut losses; (b) ride winners; (c) keep bets small; (d) follow the rules without question; and (e) know when to break rules

With respect to (e) - systems and method are constantly being refined. A rule is changed when it no longer works

(13) I ignore advice from other traders

(14) Having a quote screen is like having a slot machine on your desk - you end up feeding it all day. I get my price data after the close each day. That's it (note: Ed only used one computer - not a dizzying array of screens we see today)

(15) A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to transform himself. That's the kind of thing winners do. Winning traders have usually been winning at whatever field they are in for years.

(16) A good trader (a) loves to trade; and (b) loves to win

(17) I don't judge success. I celebrate it. I think success has to do with funding and following one's calling regardless of financial gain.

No comments:

Post a Comment