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Ed Seykota – “Everybody Gets What They Want From The Markets”

  
  Education
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When Jack Schwagger interviewed legendary trend following trader Ed Seykota for his book “Market Wizards” in 1989, it’s clear he was not ready for the answers that Ed Seykota gave.  Not many people are.

But by far the greatest and most provocative answer that Ed gave was that of “Everybody gets what they want out of the market”.  Not only did it incite an almost angry response from Schwagger, it has confused and enlightened an entire generation of traders since.

The Famous Ed Seykota Interview

Jack Schwagger asks his interviewee: “Don’t all traders want to win?”

And Ed replies with: “Win or lose, everybody gets what they want out of the market.

“I know one trader who seems to get in near the start of every substantial bull move and works his $10 thousand up to about a quarter of a million in a couple of months.  Then he changes his personality and loses it all back again.  This process repeats like clockwork.  Once I traded with him, but got out when his personality changed.  I doubled my money, while he got wiped out as usual.  I told him what I was doing, and even paid him a management fee.  He just couldn’t help himself.  I don’t think he can do it any differently.  He wouldn’t want to.

  • “He gets a lot of excitement, he gets to be a martyr, he gets sympathy from his friends, and he gets to be the centre of attention.  Also, possibly, he may be more comfortable relating to people if he is on their financial plane. 

“On some level, I think he is really getting what he wants.”

Does This Sound Like Someone You Know?  Maybe Someone You Know… Intimately?

Even back then, Ed Seykota had a fantastic grasp on the dangerous psychology pitfalls that almost every trader has to work through before they become a success in the markets. 

So you need to ask yourself: (more…)

Qantas Explosion– from the Cockpit

  
  Education
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This is an absolutely brilliant interview that is full of insights for the market. The interviewee is one of the pilots aboard the Qantas Airbus A380 last month that had an extremely serious uncontained engine explosion shortly after take-off.

In the interview they cover – inter alia – such things as

– The importance of checklists
– Dealing with contradicting signals
– Over-riding systematic considerations in favour of discretionary controls
– Keeping your head during a major catastrophe which constantly shifts its dynamics and has a lot of what we might call negative gamma…rapidly developing, interacting, non-linear issues that can rapidly move beyond your ability to keep up with them
– The importance of training and professionalism
– The importance of excess redundancy and robustness
– The importance of improvisation – and the ability to keep a clear enough head in a panic to ensure your creativity can be brought to bear on the problem.
– Power of teamwork.

Best part are the pictures of the cockpit showing the checklists and procedures they are working through.

As it turns out, this incident was very much more serious than the media ever picked up on. What an amazing story. I’m sure all will benefit greatly from reading this. For myself, I will be referring to this interview many times. A banquet for a lifetime.

Hope it benefits you all as much as it did me. Also hoping Mr. Tucker weighs in with some insights!

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