Ed Seykota - My Mentor

Ed Seykota

Career
As a young man he attended high school near The Hague, Netherlands and also lived in Voorburg.

[edit] Trading methods
Seykota is a trader who in 1970 pioneered a computerized trading system (now known as System trading) for the futures market for the brokerage house he and Michael Marcus were working for. Later, he decided to venture out on his own and manage a few of his client’s accounts.
Much of Seykota’s success was attributed to his development and utilization of computerized trading systems to which he first tested on a mainframe IBM computer. Later on, the brokerage house he had been working for adopted his system for their trades.
His interest in creating a computerized system was spawned after he read a letter by Richard Donchian on utilizing mechanical trend following systems for trading and also Donchian’s 5 and 20 day moving average system. He was also inspired by the book Reminiscences of a Stock Operator. His first trading system was developed based on exponential moving averages.
Ed Seykota, Market Wizards
“
Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible.
”
Seykota improved this system over time. This did not mean that he changed the system, but rather he adapted the system to fit his trading style and preferences. With the initial version of the system being rigid, he later introduced more rules into the system in addition to pattern triggers and money management algorithms.
Another aspect of his success was his genuine love for trading and his optimistic demeanour. This factor sustained his efforts to continuously improve on his system.