“The secret recipe for success in stock market is simple. 30% in market analysis skills, 30% in risks management, 30% in emotion control, and 10% in luck.”
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rssThe Ten Best Things Ed Seykota Ever Said.
Arguably one of the greatest traders of all time with his trend following system.
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
The Ten Best Things Ed Seykota Ever Said:
Psychology
“To avoid whipsaw losses, stop trading.”
“It can be very expensive to try to convince the markets you are right.”
“A fish at one with the water sees nothing between himself and his prey. A trader at one with his feelings feels nothing between himself and executing his method.”
Risk Management
“The elements of good trading are cutting losses, cutting losses, and cutting losses.”
“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.”
“In your recipe for success, don’t forget commitment – and a deep belief in the inevitability of your success.”
Trading System
“The trend is your friend except at the end when it bends.”
“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.”
“Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible.”
“I don’t predict a nonexisting future.”
Ed Seykota is a legend in the trend following community and has returns that would make Bernie Madoff jealous, because his are real. If you can fully grasp what Ed is saying in these quotes it will improve your trading dramatically.
Trading Recipe!
The recipe for success in trading are as follows:
- *Identify a signal
- *Take immediate action
- *Feel good no matter what the result, as long as the trade is consistent with your technical bias based on sound probabilities
On the other hand, experiencing hesitation or self-doubt, just at the moment of action, is the recipe for failure!
Power Is No Substitute For Precision And Patience
“Investing is no different. It is a game of repetition where hundreds of small actions result in one larger result. But most importantly, it is a game of risk management. It is not the home run hitter who wins in the long-run. Rather, it is that strategist who devises the best long-term plan who ultimately wins. While hitting home runs is sexy it is rarely a recipe for success in the investment world. Aim high, but play small. Over time, good risk management and patience wins. Power is no substitute for precision and patience. The same is true in the world of investing.”
Stock Market Wisdom :Benjamin Lee
“There are laws governing the financial markets just as there is gravity law to keep all things together on the earth.”
- “Stock market is a battlefield. Always remember to survive in the game first. Only those that survive the battle can enjoy the spoils of the war.”
- “Never revenge for your losses in share market. It will get you killed.”
- “It is better to be late, and catch the right worm, than catching the snake’s tail.”
- “The stock market is always there. It has been there for centuries, and it lives longer than anyone of us here. Therefore, don’t rush and trade all your capital like there is no tomorrow.”
- “Human is always subject to his own emotion. How many of us can break free from the greed, fear, and unfounded hope that are so common in stock market?”
“Do not underestimate the power of a raging bull, and the strength of a bear in stock market. Both have the power to trample you to death if you fight against them.”
“The secret recipe for success in stock market is simple. 30% in market analysis skills, 30% in risks management, 30% in emotion control, and 10% in luck.”
“Time is the cause, Volume is the fuel, and Price is the result. Of all these three, Time is the greatest factor in determining stock market direction.”
“The worst enemy to any stock traders and investors are Greed, Fear, and unfounded Hope.”