Ed Seykota is a Market Wizard and has achieved a return of 250,000% over 16 years.

If you want to learn his trading method and reduce your learning curve, then this thread is for you.

Here are 11 powerful lessons to get you started…
1/ Trend > Pattern > Entry

Trend: Trade in the direction of the trend because it’s the path of least resistance.

Pattern: Identify a chart pattern to time your entry.

Entry: Set an order to get into the trade if the pattern completes.
2/ Ignore fundamentals

If the market is in an uptrend the fundamentals are likely bullish.

If the market is in a downtrend, the fundamentals are likely bearish.

So instead of analysing fundamental news, why not just follow the price?
3/ Set your stop loss at where the chart sours

You want to set your stop loss when your setup is invalidated.

For example…

If you buy at support, then your stop loss should go a distance below it—such that if the price reaches it, support is clearly broken.
4/ The less you risk, the better you sleep

If you have difficulty, then it means your position size is too large.

Trim it down to a level where you can sleep soundly at night.

No amount of money is worth it if you can’t get a good night’s sleep.
5/ Ignore advice from traders who are onto a “sure thing”

Avoid traders who say things like…

100%, guaranteed, for sure, etc.

They have no idea what’s coming their way—and it’s not good.
6/ How to pyramid your trades

Think of it as a pyramid, add smaller size as the market moves further in your favour.

Your average price is lower so it’s easier to hold your position and not get shaken out on a pullback.
7/ Trend systems do not pick tops or bottoms

As a trend follower, your goal is to capture the “meat” of the move.

This is achieved by using a trailing your stop loss—which gets you out of the trade after the market has moved against you.
8/ The profitability of a trading system moves in cycles

No market trends all the time.

No market ranges all the time.

That’s why no trading system makes money all the time.
9/ Trading systems don’t eliminate whipsaws

Whipsaws is the cost of doing business.

The key is not to avoid it but rather, to manage your risk so you can survive during tough times.

And when favourable market conditions return, you can thrive again.
10/ You must have the commitment and the belief in yourself

Yes, you can make money by clicking buttons.

But it’s going to be the hardest easiest money you’ll ever make.

You must be committed all the way.

You must believe in yourself.

You must persevere.
11/ Ed Seykota: Trading rules to live by

1. Cut losses

2. Ride winners

3. Keep bets small

4. Follow the rules

5. Know when to break the rules
If you want to more Ed Seykota, you can read his interview in Market Wizards here…
Do you trade the stock markets?

Then join me at my upcoming web class.

You’ll discover how you can earn an extra 10%, 20%, or even 40% a year—without studying technical analysis, analyzing financial reports, or following the news.

Sign up here (free)… tradingwithrayner.com/sts/
TL;DR (1/2)

Trend > Pattern > Entry

Ignore fundamentals.

Set your stops where the chart sours.

The less you risk, the better you sleep.

Ignore advice from traders who are onto a “sure thing”.
TL;DR (2/2)

Add a smaller position size as the market moves in your favour.

Trend systems do not pick tops or bottoms.

The profitability of a trading system moves in cycles.

Trading systems don’t eliminate whipsaws.

You must have the commitment and the belief in yourself.

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