Success in Trading: Secrets of Ed Seykota

Ed Seykota is a very well known one-of-a-kind trader from the west, who has found meaning in his life, and has been living it exactly as he wanted to. Given the fact that markets have an immense impact on our lives as traders, his search for meaning in life and living by it is nothing less than inspiration to us!

There were certain important areas for him:

1. A) Long term trend
2. B) Current chart patterns
3. C) Picking a good spot to enter

For these, he followed some simple rules:

1.Cut losses
2.Ride winners
3.Keep bets small
4.Follow rules
5.Know when to break the rules!

He always focused on following these rules with discipline. Rule no 4 & 5 have been very dear to him.

He also considered Gut feeling to be very important, because on many instances, you don’t have reasons for your feeling, but you just know it will happen. But you need to know when to listen to it!

Psychology motivates the quality of analysis, and puts it to use. Psychology is the driver and analysis is the road map.

A winning trader personality is:

1. He loves to trade, &
2. He loves to win.

Everybody gets what they want out of the markets. Some people seem to like to lose, so they win by losing money! Food for thought, isn’t it?

Notes of a Warrior – 6

The trader, a warrior, gets on to his battlefield, the markets, everyday. But does not always have faith.

There are moments when he believes in absolutely nothing, when his heart is filled with unconvincing feelings and utter disbelief. And he asks his heart: ‘Is all this effort really worth it?’

But his heart remains silent. And the warrior has to decide for himself.

Then he looks for an example. And he remembers that Jesus went through

something similar in order fully to inhabit the human condition. Obviously that was so selfless. ‘Remove this cup from me,’ said Jesus. He too lost heart and courage, but he did not stop.

The warrior continues despite his lack of faith. He goes forward and, in the end, faith returns.