Ed Seykota has been a longtime House God in my trading office since I first discovered him while reading the first Market Wizard book by Jack Schwager. If you haven’t read it yet you are in for a treat!

Ed Seykota

Ed Seykota

When it comes to the great traders of our day, the names usually mentioned include George Soros, Richard Dennis, and Jesse Livermore. A name that is not as famous is Ed Seykota. However, people who know who Ed Seykota is often praised him as one of the greatest traders of all time.

Let us take you through who Ed Seykota is and his rise to ‘almost fame’. Not only will we take you through a brief overview of Ed Seykota’s career, but we will also share his trading strategy with you. Most important of all, we will take a look at some of his most memorable quotes and dissect what they mean!

Who Is Ed Seykota?

The main reason Ed Seykota is not that well known in mainstream trading circles is simple. Ed does not chase fame. Not only does Ed not have an office, but he is a one-man shop, without employes.

Ed trades from his home office in Texas. He only trades his own money (along with a few select clients). Apart from that, he has his very own Trading Tribe where he mentors other traders and discusses everything traded related. He also has his very own website where you can find links to all of his books as well as the main Trading Tribe hub.

Ed Seykota Biography and Trading Career

Seykota was born in 1946. He graduated from MIT with a Bachelor of Science in Electrical Engineering. However, Ed Seykota soon discovered the allure of the financial markets!

More specifically, what caught Seykota’s interest was the silver market. He believed that the market had to rise as the U.S treasury stopped selling silver at the beginning of the 1960s.  He opened a commodity margin account to take advantage of his insight, and while he was waiting for the right time to enter, his broker convinced him to short copper. That trade didn’t turn out very well, so Seykota went back to wait for the inevitable bull market in silver he was anticipating.

So came the day that the U.S treasury announced that it was going to stop selling silver. However, despite Seykota’s prediction, the silver market didn’t move upwards, but fell! Soon he was stopped out of the trade.

This very first trade of his own had a large impact on Ed Seykota! The way the market had discounted the bullish news fascinated him. Soon he stumbled upon a letter published by Richard Doncian,  the inventor of Donchian Channels,  that suggested that purely mechanical trend-following systems could perform well and beat the markets!

Seykota found this hard to believe, but decided to test the ideas presented in the letter. He wrote a computer program using punch cards, to test if what Donchian alleged actually worked.

He was amazed to find that it really did work. This proved to be the start to Seykota’s systematic approach to start, which in those days was seen with disbelief by most people.

Ed Seykota’s First Trading Job

At the beginning of the 1970s, Ed Seykota landed his first job as an analyst with a brokerage house. He was assigned to cover the egg and broiler markets as an analyst. Given his recent discovery of mechanical systems, Ed wished to have access to the company computer, to continue his testing. However, when he found out that he wasn’t granted permission to access it, he decided to quit, just one month after getting the job.

Ed Seykota went to work for another brokerage firm, this time as what Jack Schwager describes as a “glorified office boy” in the first market wizards book. However, the company went through a reorganization, and the lack of supervision made it possible for Ed to gain access to the computer to test his trading systems. The following six months he tested around one hundred variants of four different trading systems. His analysis once again showed that there was great potential in computerized, mechanical systems!

Eventually, the management became interested in his work, and funded his strategies. However, it did not take long before the management believed that they were better decisionmakers than the systems. As they overrode the system, its performance decreased substantially. To add insult to injury, management also decided to change the parameters so that the system would make more trades, to bring in more commission from the clients. They did so despite Ed’s warning that this would seriously impede performance!

Quitting His Job

Realizing all this, Ed Seykota decided to quit his job at the research department, but stayed as a broker. Two years later he gave brokerage as well to start as a money manager.

Seykota kept on refining his trading system as time went by. Not only did he try to fine-tune the system to his liking, but he also tried to make it more flexible. During the early stages of the system, it was quite stiff and unable to account for a lot of changes that could occur in the market.

Over time, Ed Seykota was able to make his system good enough to comfortably beat the market. This was because Ed was finally able to mold the system to his liking by introducing additional conditions along with algorithms which all worked in conjunction with one another, and most importantly, suited his trading style!

Ed Seykota’s Books

The Trading Tribe

The Trading Tribe

Jack Schwager, in his book Market Wizards, says that Ed was responsible for turning one client’s account from a mere $5,000 to $15,000,000. He did this in just 12 years! This is as great an achievement as any trader can hope to have, and it definitely puts Ed Seykota among some of the most legendary traders to ever walk this earth.

While Market Wizards may be the reason why Ed Seykota became a somewhat known figure in the trading world, it was not written by him. Jack Schwager did well to squeeze as much out of Ed as he could, but you also have access to two of Ed’s own books to understand his philosophy.

Ed’s first book, The Trading Tribe, was published in 2005 and focuses on how Ed runs his Trading Tribe. On top of that, the book also delves into the psychology of the trader and the process of aligning your conscious and subconscious to work for the greater good.

Ed’s second book deviates from the norm by getting into modern government. Govopoly in the 39th day was published in 2013 and is a fascinating look into how modern governments are spending money that they do not have. Ed predicts numerous problems arising from the ‘irrational’ behavior of the governments in the near future. He also believes that the public should be much more worried than it is about a situation which is very much ‘appalling’ in nature.

What Were Ed Seykota’s Trading Strategies?

While it is possible to write an entire essay on Ed’s trading strategies, it is also possible to condense his strategies into a few paragraphs, albeit extremely broadly.

Ed trades trend following strategies that are mostly mechanical. This means that he typically doesn’t spend too much time on the execution part of his trading. Typically his trading is confined to the few minutes it takes to load in the charts and place order for the next day.

Importance of Money Management

In his interview in the market wizards book, he emphasizes the role his money management rules have played in his success! Ed places stops to make sure he does not lose out massively on every single trade, and try to keep his losses at a maximum of around 5% of his capital. On top of that, he also makes sure to make bets which are small, but big enough that a profit would mean something to him. If the trade is too small for you to care about it, your trading will suffer. However, it’s just as important to not go too big in order to keep emotions in check, something that we further explain later on.

In fact, Ed’s first book came about due to his experience with other traders. He discovered that emotion and psychology has a lot to do with how people trade than many realize. Keeping your emotions in check is as important as mastering trading itself, if you want to be successful in the markets.

Algorithmic trading relieves from a lot of the stress that comes with discretionary trading. If you want to read more about algo trading, we recommend that you have a look at our guide to algorithmic trading!

Ride Your Winners and Cut Your Losses

‘Ride Your Winners’ and ‘Cut Your Losses’ are pretty much the bread and butter of Ed’s trading strategy. In order to profit enough from your winning trades to cover for the losses, you have to ride the winning trades. Many traders assume that taking profit quick profits and waiting for losses to turn into winners is a good idea.

Ed disagrees strongly with this idea. Ed believes that you should have clear indicators to determine when a trend is dying. Only when you get indications that the trend is soon likely to reverse, you should you close your winning position.

On the opposite end, you should be quick to make sure your losses do not have a huge impact on your account. As such, Ed always uses a stop loss, and often trailing stops to catch in profit in a trend that moves in his direction.

Many traders are often sure that the trade that they are making is essentially a guarantee. Due to this, they do not back out of the trade. Often times, traders simply move their stop loss and hope for a reversal.

When a trade is going against you, it is imperative that you back out in time, and not let the losers run. Every single trader, including Ed Seykota, has lost money on hundreds of trades. It is important that you keep your ego in check if you want to be consistently profitable!

Follow the Rules of Your System

This is the last important tip that you can glean from Ed Seykota’s trading strategies. Once you have developed a system that you know can be profitable, do not shy away from it. Temporary losses are bound to occur. Make sure you follow the rules and adhere to your system completely.

However, there is no ‘perfect system’ and nor is there only one ‘correct’ system. Even if your system is lacking, it might still be profitable. In trading, you will inevitably experience losing streaks, but what counts is how the system performs long term!

Following the system also means that you have to ignore the news, if the news isn’t part of the system. Many times, people exaggerate the importance of a certain news story and end up making trades which make no sense. For this reason, it is best that you ignore news stories surrounding your trades. It is better if you work on your trading system instead of focusing on current external factors. There is absolutely nothing that you can do to change them.

The Whipsaw Song

In this song, performed and written by Ed Seykota himself, Ed describes how his trading systems work.

Some of Ed Seykota’s Most Important Quotes

While there is a lot that you can learn from Ed Seykota’s trading strategies, the aforementioned section doesn’t even begin to cover them. The best way to further study Ed is through his own website, books, essays, and interviews.

However, you can get to know some of Ed’s most important teachings by going through his quotes. Here, we have collected a few of his quotes which we believe to be of paramount importance to traders. Not only do we mention the quote, but we also delve deeper into its meaning and how it reflects on traders today.

“To avoid whipsaw losses, stop trading.”

When you are starting to lose a lot, it might be better to just take a break. The intense feelings stir your emotions and make you upset, which will make it hard to obey by your strategies, in turn making you more prone to making mistakes.

By taking a break, you relieve yourself from much of the emotional pain and angst caused by the losing streak. When you come back, you will have gained new perspectives on matters, and problems that seemed unsolvable you now can take care of with ease!

Trading indeed is a psychological and emotional endeavor, and therefore you need to ensure that you always are in good shape! Taking a break in the midst of emotional turmoil is one way of ensuring that!

“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.”

Volatile Markets

Volatile Markets

This is a quote that is really worth taking in! At first, you might not understand what it means, but that is not strange. It requires some insight into trading to be able to fully understand this without some help. So what does it mean?

Well, many traders trade with the anticipation that trading will be an easy way to riches. They believe that you just have to buy at the low, and sell at the high. After all, how hard can it be? With hindsight, it looks so simple when pulling up the charts!

In real trading, it will not be nearly as easy! As is stated in the quote, there is no way to remove uncertainty from your trades. The outcome of a single trade is random. However, when taking many trades in a row, we get a larger sample size, and can draw statistical conclusions. That is, if our trading strategy is profitable, in the long run, our trading outcome will not be random, while it still is at the single trade level.

Many traders ascribe their issues to their models not being correct. They resort to altering their methods and strategies, which in the quote are referred to as ” the math”. However, their issue does not lie in their model, but in that they are expecting certainty in one of the most uncertain of environments, namely the financial markets.

A good trader does not fear volatility. Instead, he tries to do his best while understanding that volatility is going to exist no matter what he/she does.

Remember that being a trader is about embracing uncertainty. There is always a chance that your next trade fails!

“It can be very expensive to try to convince the markets you are right.”

Markets are uncertain, and often irrational. Simply put, it is entirely possible that the market moves in a way which simply does not make sense. In that case, you need to make sure you are cutting your losses and riding your winnings. It is much better to be profitable than it is to be correct.

A great example of this which is known by traders worldwide is Bill Ackman and Herbalife. The feud between Bill Ackman and Herbalife was well documented in the documentary ‘Betting on Zero’. Basically, Bill Ackman shorted the MLM Company Herbalife and led a marketing campaign to discredit its reputation. He did this by claiming that Herbalife is a pyramid scheme.

After taking a look at all the evidence, it seems to us that Bill Ackman was right. However, despite all of his efforts, Herbalife’s stock price did not plummet. Instead, it went up. Fortune estimates Bill Ackman’s total loss from the Herbalife fiasco to be upwards of $500,000,000.

Herbalife only further illustrates how Ed was right. The market will do whatever it wants. Even Benjamin Graham, one of the most revered financiers in the history of the stock market, referred to the markets as ‘Mr. Market’. An individual with his own free will do whatever he pleases, whenever he pleases.

It is much better to simply try and profit from where the market trends rather than trying to convince the markets that you are right. The latter will not change a jot, well except for decimating your trading capital!

“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.”

So what did Ed Seykota mean when he said this?

In a nutshell, it boils down to this; your beliefs create your illusionary reality. Your beliefs are yours because you wanted them at some point (you created them or accepted them) in your life and you still have them. Therefore, you playout your beliefs with the market and get to experience them, so you get what you want.

Here is an excellent longer version of this answer.

“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.”

As we have stated before, Ed was very interested in the psychology of the trader. Over his time, he came to a lot of conclusions on how to make sure you do not end up being your own worst enemy when trading.

You need to make sure that if a trade does go awry, you do not end up losing a lot of money. More importantly, you need to make sure that you do not risk a lot of capital on a single trade. This is because a trade like this is bound to keep you on the edge of your seat. Even if the trade only moves slightly against your position, you will want to end the trade so as to avoid a bigger loss. In order to be a consistent winner, you must be able to follow your systems carefully, and not deviate from your set rules! This becomes very hard if you know that you cannot afford that your current trade ends as a big loser!

However, risking too little is not an option either. It is important that you possess an inner driving force so that you remain focused and cope with the immense pressures that trading puts on you. That driving force often lies in that you know that the potential positive outcome is significant and worth striving for!

Still, as Seykota puts it “if there is no such amount, don’t play”! Don’t play the markets if it’s just for the money! You need to have a deeper purpose with what you are doing, in order to succeed! Trading needs to feel meaningful if you are going to persevere and endure during the time it takes to succeed!

“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.”

Most of the quotes that you have read until now do not go into specifics. Rather, they deal with the bigger picture. However, Ed Seykota was also quick to part with his specific trading methods so as to help the novice trader.

Here, Ed says to make sure that you keep your speculative account small. This is just another way to make sure that emotion plays as little a part in your trades as it can. If you are only speculating with 10% of your liquid net worth, and you risk less than 1% of your account on a trade, the money that you are speculating with is not nearly enough to cause you excess worry.

However, trading with a lot of money is bound to cause anxiety in most traders. While a select few may have ‘nerves of steel’ and are able to keep their cool even when trading with a lot of money, most traders aren’t like that.

And if you cannot control your emotions, you will end up feeling an urge to make drastic changes to your trading. There are many traders who find themselves having lost more than they had anticipated, and try to rectify their bad trades by betting more on that the next trade is going the be the one that brings everything back to order again! These kinds of uncontrolled and drastic measures are what Ed refers to as “feeling-justified drama” in the quote.

“Trying to trade during a losing streak is emotionally devastating. Trying to play “catch up” is lethal.”

The tendency of making bad decisions during losing streaks is one of the best examples of weak human behavior. It exists in every single walk of life where loss is a possibility. Gamblers are often notorious for making bad decisions when on losing streaks, and so are traders.

When you are on a losing streak, you might need to quit for a while. It is important to detach yourself from your trades and come back later with a fresh perspective. Many people believe that they can turn their trades around and that leads to ‘lethal catch up’.

During losing streaks, many traders start to ignore their trading system. They make bets which make no sense. The most common theme here is a trader increasing his position with every trade so as to cover his losses in the previous one. This behavior is very detrimental and usually ends up compounding the trader’s losses.

While it is easy to imagine that you can quit when on a losing streak, actually experiencing one may lead to you behaving differently. Ed further explains this point in this next quote.

“The elements of good trading are 1, cutting losses. 2, cutting losses. And 3, cutting losses. If you can follow these three rules, you may have a chance.”

When we were discussing Ed Seykota’s trading strategies, we placed a huge emphasis on cutting your losses. Ed pretty much does the exact same thing. Here, Ed quickly lays down three rules that you need to follow in order to be a good trader. To no one’s surprise, all three of them are ‘cutting losses’.

Every single trader in the world has trades where they make money and trades where they lose money. Actively trying to have your winning trades outperform your losing trades, once you’re in a trade, is a pointless strategy. This is because it is bound to bring emotion into the mix, and essentially make you not follow the trading strategy.

If you instead focus on cutting losses, you will be much better off. This is because backing out of a losing trade is much easier than trying to make huge profits on multiple trades. As long as you are not losing too much money on trades which go awry, you increase your chance of ending up with a profit!

“I usually ignore advice from other traders, especially the ones who believe they are on to a “sure thing”. The old-timers, who talk about “maybe there is a chance of so and so,” are often right and early.”

This is very important because every single successful trader has said this in one way or the other. Simply put, it is best to focus on your own research and your own data rather than relying on other people.

This is because it is very difficult to distinguish traders who actually know what they are doing with traders who think of trading as a get-rich-quick scheme. Rather than wasting your time chasing after good advice, it is best to only seek advice from traders who have shown their success (like Ed Seykota) and focus on your own trades.

Remember that ‘other traders’ also refers to websites which guide you on stock picking. Internet resources which teach you how to trade could be very beneficial. However, websites and magazines which outright tell you which stock you should be buying cannot be trusted. For the most part, the words that you are reading are a single person’s opinion.

“There are old traders and there are bold traders, but there are very few old, bold traders.”

This quote once again refers to the ever so relevant insight not to take excessive risk in your trades. Bold traders,  in other words, traders who size their positions recklessly and risk far too much of their capital, could very well be incredibly successful during a long time. However, once the market gets wild, which it’s bound to get eventually, these are the traders that are the first to lose their capital.

Remember that while the upside is limitless, the downside is always capped at 100%. The best thing you can do is to always set risk management as your first priority. That way you substantially increase your chances of surviving, and becoming an “old trader”!

“The trend is your friend except at the end where it bends.”

If you want a summary of all of Ed’s teachings, then this is it. You need to try to follow the trend all the way through to the end, which is where it bends.

However, what Ed also is referring to is the fact, that once a trend is old, many market participants have spotted it, it tends to take off into the sky. Once this happens, (it bends), there probably is not much of left of it. In order to profit well from trends, you need to come in before everyone else, at an early stage!

“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.”

Ed is known for using trading systems which take the human element out of trading as much as they can. This may lead some people to believe that traders like Ed are over-reliant on their systems and they too, need to systemize their trading as much as they can in order to be profitable.

While that is true to a certain extent, the human element will never completely be removed from the markets. This is because no matter how good your system is, you still need to guide it properly in order to be profitable.

Not only do you need to decide which market or markets your system is best suited for, but you also need to manage your risk. A good trading system can accurately determine which trade to make for the most part. What it doesn’t do automatically is to decide how much money your position should be worth.

Ultimately, your success as a trader will not just depend on how good your system is, but how good you are too. There is a reason why many traders make millions from trading while others end up losing a large part of their net worth. Individuals who can train themselves and keep their emotions at bay are bound to be more successful than those who do not.

More Quotes

Here are some more motivational trading quotes by Ed Seykota that I hope will help you keep focused and hopefully become a better trader.

I have picked Ed Seykota quotes that I really like and that resonate with me.

Hopefully, you will really love one or two of these Ed Seykota quotes as well. If so, be sure to write them down and keep them visible during your trading day.

  • “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.”
  • “Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible.”
  • “The trend is your friend except at the end where it bends.”
  • “The elements of good trading are cutting losses, cutting losses, and cutting losses.”
  • “The markets are the same now as they were five or ten years ago because they keep changing just like they did then.”
  • “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.”
  • “To avoid whipsaw losses, stop trading.”
  • “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.”
  • “Pyramiding instructions appear on dollar bills. Add smaller and smaller amounts on the way up. Keep your eye open at the top.”
  • “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.”
  • “It can be very expensive to try to convince the markets you are right.”
  • “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.”
  • “Our work is not so much to treat or to cure feelings, as to accept and celebrate them. This is a critical difference.”
  • “When a feeling dissolves, it ceases to be your enemy and begins to be one of your allies.”
  • “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, you might have valuable “surprise-a-mentals”.”
  • “If you can’t measure it, you probably can’t manage it… Things you measure tend to improve.”
  • “The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system.”
  • “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”
  • “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.”
  • “Our work is not so much to treat or to cure feelings, as to accept and celebrate them. This is a critical difference.”
  • “Before I enter a trade, I set stops at a point at which the chart sours.”
  • “Trading requires skill at reading the markets and at managing your own anxieties.”
  • “The positive intention of fear is risk control.”
  • “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.”
  • “Trying to trade during a losing streak is emotionally devastating. Trying to play “catch up” is lethal.”
  • “The elements of good trading are 1, cutting losses. 2, cutting losses. And 3, cutting losses. If you can follow these three rules, you may have a chance.”
  • “Losing a position is aggravating, whereas losing your nerve is devastating.”
  • “The markets are the same now as they were five to ten years ago because they keep changing – just like they did then.”
  • “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.”
  • “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.”
  • “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.”
  • “If you can’t take a small loss, sooner or later you will take the mother of all losses.”
  • “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 the skill to help them.”
  • “Risk no more than you can afford to lose, and also risk enough so that a win is meaningful.”
  • “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.”
  • “Be sensitive to subtle differences between ‘intuition’ and ‘into wishing’.”
  • “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.”
  • “I usually ignore advice from other traders, especially the ones who believe they are on to a “sure thing”. The old-timers, who talk about “maybe there is a chance of so and so,” are often right and early.”
  • “I set protective stops at the same time I enter a trade. I normally move these stops in to lock in a profit as the trend continues. Sometimes, I take profits when a market gets wild. This usually doesn’t get me out any better than waiting for my stops to close in, but it does cut down on the volatility of the portfolio, which helps calm my nerves. Losing a position is aggravating, whereas losing your nerve is devastating.”
  • “I intend to risk below 5 percent on a trade, allowing for poor executions.”
  • “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.”
  • (On losing streaks and over-trading) “Acting out this drama could be exciting. However, it also seems terribly expensive. One alternative is to keep bets small and then to systematically keep reducing risk during equity drawdowns. That way you have a gentle financial and emotional touchdown.”
  • “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.”
  • “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.”
  • “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.”
  • “The feelings we accept and enjoy rarely interfere with trading.”
  • “Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible”
  • “It can be very expensive to try to convince the markets you are right.”
  • “There are old traders and there are bold traders, but there are very few old, bold traders.”
  • “I would add that I consider myself and how I do things as a kind of system which, by definition, I always follow.”
  • “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.”

Bottom Line

Ed Seykota’s wisdom will live on long after he is gone. Not only is Ed a successful trader, but he is also a great teacher. All traders regardless of their experience can learn something from Ed and use his knowledge to better their performance in the markets.

While a layman’s view of a trader might involve big money and huge profits in a single day, traders who are actually successful make their money one piece at a time. In the long run, those small pieces separate them from the rest of the pack.

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