Ed Seykota : The Greatest Trend Follower !!!!!!!!!

Dear All , 

                       Ed Seykota managed to achieve a return of 250,000% over a 16 year period 

Some Rules & Guidelines he follow are mentioned Below 

1) 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.

 2) The feelings we accept and enjoy rarely interfere with trading.

 3) Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible.

 4) It can be very expensive to try to convince the markets you are right.

5) There are old traders and there are bold traders, but there are very few old, bold traders.

6) I would add that I consider myself and how I do things as a kind of system which, by definition, I always follow.

 7) 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.

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

9) The elements of good trading are: 1. Cutting losses. 2. Cutting losses. 3. Cutting losses. If you can follow these three rules, you may have a chance.

10) Losing a position is aggravating, whereas losing your nerve is devastating.

11) The markets are the same now as they were five to ten years ago because they keep changing, just like they did then.

12) 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.

 13) If you can’t take a small loss, sooner or later, you will take the mother of all losses. Risk no more than you can afford to lose, and also risk enough so that a win is meaningful.

 14) 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.

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

16) 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.

 17) 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.

18) The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system.

19) To avoid whipsaw losses, stop trading.

20) Pyramiding instructions appear on dollar bills. Add smaller and smaller amounts on the way up. Keep your eye open at the top.

21) 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.

 22) Before I enter a trade, I set stops at a point at which the chart sours.

23) The positive intention of fear is risk control.

Thanks & Regards 

Abhay Mehrotra 

M : 9873511276