Why should I know Ed Seykota?
Books by Ed Seykota
Quotes by Ed Seykota
“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 winning traders do.”
“Be sensitive to subtle differences between ‘intuition’ and ‘into wishing’.”
“Charting is a little like surfing. You dont have to know a lot about the physics of tides, resonance, and fluid dynamics in order to catch a good wave. You just have to be able to sense when its happening and then have the drive to act at the right time.”
“Dramatic and emotional trading experiences tend to be negative. Pride is a great banana peel, as are hope, fear, and greed. My biggest slip-ups occurred shortly after I got emotionally involved with positions.”
“Fundamentalists figure things out and anticipate change. Trend followers join the trend of the moment. Fundamentalists try to solve their feelings. Trend followers join their feelings and observe them evolve and dis-solve.”
“Having a quote machine is like having a slot machine at your desk – you end up feeding it all day long. I get my price data after the close each day.”
“I consider myself and how I do things as a kind of system which, by definition, I always follow.”
“I don’t judge success, I celebrate it. I think success has to do with finding and following one’s calling regardless of financial gain.”
“If I am bullish, I neither buy on a reaction, nor wait for strength; I am already in. I turn bullish at the instant my buy stop is hit, and stay bullish until my sell stop is hit. Being bullish and not being long is illogical.”
“If you can’t measure it, you probably can’t manage it… Things you measure tend to improve.”
“If you can’t take a small loss, sooner or later you will take the mother of all losses.”
“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.”
“In order of importance to me are: 1) the long term trend, 2) the current chart pattern, and 3) picking a good spot to buy or sell.”
“It can be very expensive to try to convince the markets you are right.”
“It is a happy circumstance that when nature gives us true burning desires, she also gives us the means to satisfy them. Those who want to win and lack skill can get someone with skill to help them.”
“Longevity is the key to success.”
“Losing a position is aggravating, whereas losing your nerve is devastating.”
“Luck plays an enormous role in trading success. Some people were lucky enough to be born smart, while others were even smarter and got born lucky.”
“Markets are fundamentally volatile. No way around it. Your problem is not in the math. There is no math to get you out of having to experience uncertainty.”
“My style is basically trend following, with some special pattern recognition and money management algorithms.”
“Pyramiding instructions appear on dollar bills. Add smaller and smaller amounts on the way up. Keep your eye open at the top.”
“Risk no more that you can afford to lose, and also risk enough so that a win is meaningful.”
“Speculate with less than 10% of your liquid net worth. Risk less than 1% of your speculative account on a trade. This tends to keep the fluctuations in the trading account small, relative to net worth. This is essential as large fluctuations can engage emotions and lead to feeling-justifying drama.”
“Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible.”
“Systems trading is ultimately discretionary. The manager still has to decide how much risk to accept, which markets to play, and how aggressively to increase and decrease the trading base as a function of equity change.”
“The elements of good trading are:
1) cutting losses.
2) cutting losses.
3) cutting losses.
If you can follow these three rules, you may have a chance.”
“The feelings we accept and enjoy rarely interfere with trading.”
“The markets are the same now as they were five to ten years ago because they keep changing – just like they did then.”
“The positive intention of fear is risk control.”
“The trading rules I live by are:
1. Cut losses.
2. Ride winners.
3. Keep bets small.
4. Follow the rules without question.
5. Know when to break the rules.”
“The trend is your friend except at the end where it bends.”
“There are old traders and there are bold traders, but there are very few old, bold traders.”
“To avoid whipsaw losses, stop trading.”
“Trading requires skill at reading the markets and at managing your own anxieties.”
“Trend following is an exercise in observing and responding to the ever-present moment of now.”
“Trends become more apparent as you step further away from the chart.”
“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.”
“Working to anticipate the future can be a distraction from the important task of dealing with the present.”