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Ed Seykota Quotes

  
  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
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.
Trading
To avoid whipsaw losses, stop trading.
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.
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 prolem is not in the math. There is no math to ge you out of having to experience uncertainty.
It can be very expensive to try to convince the markets you are right.
System Trading
Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible. (more…)

Does Failure Motivate you ?

  
  Education
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MOTIVATEI’ve been reading a wondeful book by Jerry Stocking titled Laighing with God.In that book the following dilemma is broght up ,and I’m going to rewrite the conversation a little to make it pertinent to trading/investing.

God :Do you want to win without losing ?

Trader :Of course.

God :If you win ,you must lose as well.But you weren’t honest with me.Your saud that you’d like to just win.If that were the case ,you’d win much  more often.

The possibility of failure motivates you much more than the possibility of success.your whole society thrices on failure  or at least the fear of lossing.If there were not the possibility of losing you could not take any credit for success.Making money in the markets would seen meaningless for you. (more…)

Trading Wisdoms

  
  Education
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“I absolutely believe that price movement patterns are being repeated; they are recurring patterns that appear over and over. This is because the stocks were being driven by humans- and human nature never changes”.

-Jesse Livermore (Considered by many to be the greatest stock market operator ever. Made 100 million dollars in 1929 stock market crash. Made several other multi-million dollar fortunes in his trading career).
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“You have to cut your losses fast. The secret for winning in the stock market does not include being right all the time. The key is to lose the least amount possible when you are wrong”.

-William J. O’Neil (In my opinion, the best stock market operator in the world today. Has made an incredible fortune trading the stock market. O’Neil is the founder of Investors Business Daily. Much of my stock market education and training has been from William J. O’Neil).
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“Whatever method you use to enter a trade, the most critical thing is that if there is a major trend, your approach should assure that you get in that trend”.
-Richard Dennis (Turned 400 dollars into a fortune of at least 200 million dollars by using his remarkable trading skills).
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“I am primarily a trend trader. 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”.
-Ed Seykota (One of the greatest traders of all time. Turned 5000 dollars into an incredible 15 million dollars or more).
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“The most important rule of trading is to play great defense”.

-Paul Tudor Jones (An amazingly consistent and successful trader. In 2006, earned a whopping 750 million dollars).
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“Being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong”.
-Bernard Baruch (Fantastic trader who earned ten’s of millions of dollars in the first part of the 20th century).
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“The greatest safety lies in putting all your eggs in one basket and watching that basket”.

-Gerald M. Loeb (Amassed many millions in the stock market during his long career).
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“I am looking for the strongest stocks in the market, in terms of both earnings and the technical picture”
-David Ryan (Multiple time winner in the stock division of the U.S. Investing Championships).
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“Most of my success has been due to my hanging on while my profits mounted. There is the big secret”.
-Arthur W. Cutten (Gained wealth and prominence, early in the 20th century, as a commodity trader, mostly in the wheat market.
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“I think the secret is cutting down the number of trades you make. The best trades are the ones in which you have all three things going for you: fundamentals, technicals, and market tone”.

– Michael Marcus (In a ten-year period, he multipled his company account by an incredible 2500 times). 
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“Whenever I enter a position, I have a predetermined stop. I know where I’m getting out before I get in”.
-Bruce Kovner (One of the world’s largest traders in the 1980’s. Made profits of over 300 million trading for himself). 
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“I try to assemble facts and decide what kind of scenario I think will unfold”.

-Bill Lipschutz (One of the most successful currency traders ever).
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“Virtually every successful trader I know ultimately ended up with a trading style suited to his personality”.

-Randy McKay (Turned $2000 into $70,000 his first year of trading. Went on to double digit million dollar gains).
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“The biggest misconception is the widespread belief that it is easy to make a living trading in the stock market”.
-Stuart Walton (Fantastic stock trading track record in the 1990’s).
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“If you decide to trade for a living, you have to treat it just like any other business endeavor and go into it with a plan”.

-Mark D. Cook (Great annual returns trading the markets).

Trading Quotes and Advice

  
  Education
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  • ‘Successful trading comes down to this: overcoming your personal psychological barriers and conditioning yourself to produce feelings of self-trust , high self-esteem, unshakable conviction, and confidence which will naturally lead to good judgement and winning trades based on a proven methodology’ – Courtesy of James Buzzard.
  • “If everything feels under control, you are not going fast enough” -Mario Andretti, 1978 Formula One World Champion.
  • “If you sit by the river long enough, a dead body will sooner or later float down there” – Japanese Proverb.
  • ‘Buy High, sell Higher AND Sell low, buy back lower’, – Anonymous.
  • ‘The most important rule of trading is to play good defence, not great offence.’ –
  • Paul Tudor Jones.
  • “When the facts change, I change my mind. What do you do, sir?” – John Maynard Keynes.
  • “Holding cash is uncomfortable, but not as uncomfortable as doing something stupid.” – Warren Buffet
  • “Trade the market, not the money…if you exercise your strategy with discipline, the money will follow.” – Courtesy of Umar Ali.
  • “If you ACCEPT the risk of the trade and SHARE SIZE appropriately then you should be able to trade in a relaxed and optimum state of mind.” – Courtesy of Tom Willard.
  • “The trend is your friend” – – Courtesy of Umar Ali.
  • ttitude; Success, Failure, working hard.
  • “Mentally write off the work you do, as soon as you have done it” – Courtesy of Robin Farrell.
  • “There are old traders and there are bold traders, but there are very few old, bold traders.” – Ed Seykota
  • “Falling knives have to land somewhere…..” – Courtesy of Aidan Philipson.
  • ‘The dictionary is the only place where success comes before work!’- Vince Lombardi.
  • “Luck is what you have left over after you give 100 percent” – Langston Coleman.
  • ‘Traders (Leaders) are made, they are not born. They are made by hard effort, which is the price which all of us must pay to achieve any goal that is worthwhile.
  • It’s easy to have faith in yourself and have discipline when you’re a winner, when you’re number one. What you got to have is faith and discipline when you’re not a winner.’ – Vince Lombardi.
  • “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.” – Michael Jordan
  • ‘What sets successful traders apart?……Most people think that winning in the markets has something to do with finding the secret formula. The truth is that any common denominator among the traders I interviewed had more to do with attitude than approach’. – Jack Schwager.
  • “There is little difference in people, but that little difference makes a big difference. That little difference is attitude. The big difference is whether it is positive or negative.” – Robert Collier.‘Ours is not to reason why, ours is but to sell and buy.’ – Courtesy of Mark Moskowitz.
  • “Success is the sum of small efforts – repeated day in and day out.” – Robert Collier.
  • “A professional writer is an amateur who didn’t quit.” – Richard Bach
  • “Golf is a game played on a 5 inch Course- the distance between your ears.” – Bobby Jones.
  • “…It’s all to do with the training: you can do a lot if you’re properly trained…” – Queen Elizabeth II.
  • “The person who goes farthest is generally the one who is willing to do and dare. The sure-thing boat never gets far from shore.” – Dale Carnegie.
  • “You are – face it – a bunch of emotions, prejudices, and twitches, and this is all very well as long as you know it. Successful speculators do not necessarily have a complete portrait of themselves, warts and all, in their own minds, but they do have the ability to stop abruptly when their own intuiition and what is happening Out There are suddenly out of kilter. – Adam Smith, The Money Game.
  • ‘“Everyday my trading skills are getting better and better”. I repeat it like a daily mantra’ – Purportedly attributed to Emile Coue.

Ed Seykota Quotes – Trend Following Trading Wisdom

  
  Education
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Ed Seykota-

  • 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.
  • Trend following is an exercise in observing and responding to the ever-present moment of now.
  • Fundamentalists and anticipators may have difficulties with risk control because a trade keeps looking ‘better’ the more it goes against them.
  • Until you master the basic literature and spend some time with successful traders, you might consider confining your trading to the supermarket.
  • I don’t predict a nonexisting future.

Trading Wisdoms

  
  Education
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“Never let the fear of striking out get in your way” – Babe Ruth

“If you can’t take a small loss, sooner or later you will have to take the mother of all losses” – Ed Seykota

“Don’t think about what the market is going to do. You have absosutely no control over that. Think about what you are going to do if it gets there.” – William Eckhardt

“I turned from a loser to a winner when I was able to separate my ego needs from making money. When I was able to accept being wrong. Before that, admitting I was wrong was more upsetting than losing money” – Marty Schwartz

“The worst mistake a trader can make is to miss a major profit opportunity. 95% of the profits come from only 5% of the trades” – Richard Dennis

Discipline

  
  Education
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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.”

Ed Seykota

I don’t buy what I like, I buy what I can sell later at higher price.

Unless you are Buffet and capable to accumulate enough shares to impact management, your shares are just pieces of paper and you should treat them like such.

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It’s the greed factor that corrupts the way people think in this business. Unfortunately, I needed a 6 fig loss to remind me how stupid greed can make a person. Needless to say, from here on, or until I recover some of these losses, trading will be disciplined.

Goodfellas and trading

  
  Education
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Karen Hill: “God forbid, what would happen if you had to go to prison? Mickey said that Jeannie’s husband…”

Henry Hill: “Do you know why Jeannie’s husband went to the can? Because he wanted to get away from her.

Let me tell you something. Nobody goes to jail unless they want to. Unless they make themselves get caught. They don’t have things organized.”

This conversation from the Goodfellas film reminds me of Ed Seykota’s famous saying, that ‘Win or lose, everybody gets what they want out of the stock market. Some people seem to like to lose, so they win by losing money’. I don’t believe in the literal interpretation of Seykota’s comment but I find the quote serves as a reminder to question the motives behind my trades.

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