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Ed Seykota Quotes Collection

  
Analysis, Education
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Markets

The markets are the same now as they were five or ten years ago because they keep changing-just like they did then.

Short-Term Trading

The elements of good trading are cutting losses, cutting losses, and cutting losses.

Outcomes

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.

Market Trends

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

Charles Faulkner tells a story about Seykota’s finely honed intuition when it comes to trading: I am reminded of an experience that Ed Seykota shared with a group. He said that when he looks at a market, that everyone else thinks has exhausted its up trend, that is often when he likes to get in. When I asked him how he made this determination, he said he just puts the chart on the other side of the room and if it looked like it was going up, then he would buy it… Of course this trade was seen through the eyes of someone with deep insight into the market behavior.

Predicting the Future (more…)

Evaluating Yourself as a Trader

  
  Education
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Here I’ve shortened and republished ten items for self-evaluation:

1) What is the quality of your self-talk while trading?

2) What work do you do on yourself and your trading while the market is closed?

3) How would your trading profit/loss profile change if you eliminated a few days where you lacked proper risk control?

4) Does the size of your positions reflect the opportunity you see in the market?

5) Are trading losses often followed by further trading losses due to frustration?

6) Do you cut winning trades short because, deep inside, you don’t think you’ll be able to achieve large profits?

7) Is trading making you happy, proud, fulfilled, and content, or does it more often leave you feeling unhappy, guilty, frustrated, and dissatisfied?

8) Are you making trades because the market is giving you opportunity, or are you placing trades to fulfill needs–for excitement, self-esteem, recognition–that aren’t being met in the rest of your life?

9) Are you seeking returns that are realistic given your level of experience and development?

10) Can you identify the specific edges you possess over the many other motivated, interested traders that fail to achieve success in the markets?

Many answers to trading problems begin by asking the right questions.

7 Mantras For Successful Trading

  
  Education
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1. Losing traders fear losses and crave profits. Winning traders eliminate both fear and greed. 
Great traders experienced a lot of losses and drawdowns in their lifes, so they don’t fear them. Losses are already familiar to them.
They know, that the biggest enemy of a trader are emotions. So the best attitude is not to be influenced by fear of loss or desire for profits. The more you fear something, the more you’ll experience it. The more you desire something, the less benefits you’ll have from it. 
If you’re scared of driving at high speeds, Formula 1 career will never be a good option for you. If you’re scared of losses, trading will also never be a activity suited for you. 
2. Losing traders care where the market will move in an hour, today or tomorrow. Winning traders don’t care where the market will go. 
Why manual traders are so attached to their positions or market direction? The deep psychological reason behind it, is that they’ve made the trades with their own hands and heads. So they start worrying about the outcome. The automated systematic traders on the other hand, let computer programs do the job, so they cannot blame themselves or the market for the outcome of particular trades. 
Why it is important in trading? The less you worry about the positions and about market direction, the less emotions can negatively impact your trading. 
3. Losing traders look for 100% return a month. Winning traders look for 100% return a year (without compounding). 
To achieve 100% return in a month, you have to trade with very high leverage. The most probable result trading with too high leverage is -100%. Winning traders use medium to low leverage. They may lose 30% from time to time, but with proper strategies, they are able to double the account every year. And if they combine medium leverage with the power of compounding , returns can be much higher.  (more…)

The Trading Beast

  
  Education
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The markets are no place to be unsure of yourself and wishy-washy, it is not a place for 2nd guesses, wishing, hoping, or gambling.  If you want to win in this jungle you need to be an unstoppable beast .

 

  1. Complete confidence in your system and method. You do not jump around in your trading or doubt yourself, it is not about you, it is the system.  Either it wins long term or it doesn’t. Either you have confidence in it or you don’t, make up your mind.
  2. You control risk. You do not expose yourself to being ruined because your bet size is consistently what you are comfortable with. Ten losses in a row is only a small draw down. If you are not afraid of ten losses in a row, what is stressful? NOTHING.
  3. You play follow the leader. You are not the lone wolf, you are going with the market not trying to predict it. Your entries and exits are based on historical patterns not your personal opinions, you are not trying to beat the market you are trying to be on its side, it always wins.
  4. You will not quit.Your exit strategy for your trading career? Never. You plan to never quit playing the greatest game on earth. You are a trader, that is what you do. Not quitting in most areas of life means that you eventually win big, the market is no different.
  5. You don’t need a guru. Your winning system is your guru. You don’t need to ask for a fish, you know how to fish. You only listen if you can learn how to catch more and bigger fish and somebody is a better fisherman than you.

The markets eat up lambs, chickens, pigs, and sloths. However beasts eat well off their prey.

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