Dear Successful Traders


Today I would like to continue with a series of articles I have just started- namely the successful trader series.
Ed Seykota is a commodities trader, who earned B.S. degree in Electrical Engineering and Management from MIT Sloan School of Management. In 1970, he pioneered computerized trading method (now known as system trading) by testing punched card computers to test ideas on trading the markets. Before becoming famous, he was working with Michael Marcus for a brokerage house and trading on the futures markets.
Seykota’s computerized method was inspired by a letter he read from Richard Donchian on utilizing mechanical trend following systems. The method incorporated a 5 Day and 20 Day moving average system. Thus, Seykota’s first trading system was developed based on exponential moving averages. Seykota’s system did improve and change over time to fit his trading style and preferences. The initial version of Seykota’ssystem was improved by making it fit for his trading style and preferences. He also introduced more rules into the system in addition to pattern triggers and money management techniques.
Jack Schwager devoted a chapter in his book Market Wizards to Ed Seykota. He considers him as one of the most successful traders of our time and I must agree with him- Ed is definitely one of the best.
I am giving two of Seykota’s most famous sayings below from which you can definitely learn:
“Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible.”
“The elements of good trading are cutting losses, cutting losses and cutting losses.”
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