What does Ed Seykota mean by "everyone gets what they want from market"?

Discussion in 'Trading' started by learner88, Jan 20, 2018.

  1. USDJPY

    USDJPY

    James Simons is a chain smoker.
     
    #41     Jan 22, 2018
    777 likes this.
  2. %%
    Good points;
    put another way, when someone quits he really did not want it much.:caution::caution:.IBD noted new traders want to much -with too little work.
     
    #42     Jan 22, 2018
  3. Sprout

    Sprout


    It was a good interview, however it just scratches the surface of his perspective. One has get into the Trading Tribe Process which he outlines in his book and find a local group that engages in it.
     
    #43     Jan 22, 2018
  4. tommo

    tommo

    Anyone got any evidence Ed has made any money since about 1993?
    Not saying he wasn't good (past tense) but markets change. He was a trend follower when markets lent themselves to simple breakout/moving average systems.

    Most of them went under in the mid/late 90's (Richard Dennis included)
     
    #44     Jan 22, 2018
  5. He's an author/teacher/guru...that says it all.
    Because those who can do...Do; those who can't...teach.

    An extremely, rare few people are truly ET's. extraterrestrial traders.
    Make Trading Great Again 2018...High-Five` :confused:
     
    Last edited: Jan 22, 2018
    #45     Jan 22, 2018
  6. southall

    southall

    In his book Trend Following, M Covel quotes an article from 'Futures' November 2001, which stated:
    "Seykota earned after fees, nearly 60% on average each year between 1990 and 2000 managing proprietary money in his managed futures program "
     
    #46     Jan 22, 2018
    murray t turtle likes this.
  7. %%
    Good to hear that. But as far as stocks go, even if he decided to retire; that would not disprove moving averages as a trend measure.And a letter note in WSJ, 2017,one of the larger hedge funds said something against that [ma], well good. We dont all want to do the same thing, markets dont work that way LOL. Good post:cool:
     
    #47     Jan 22, 2018
  8. qxr1011

    qxr1011

    substitute the word "want" with "can"
     
    #48     Jan 22, 2018
  9. comagnum

    comagnum

    It was a good interview, however it just scratches the surface of his perspective.

    It was a Zen like interview - Zen brilliance in it's simplicity. Here are some of his quotes below. From what I learned about him his systems were very simple, as in two moving averages. He did not interact with a live market.

    • 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.”
    • “Fundamentalists figure things out and anticipate change. Trend followers join the trend of the moment. Fundamentalists try to solve their feelings. Trend followers join their feelings and observe them evolve and dis-solve.”
    • “The feelings we accept and enjoy rarely interfere with trading.”
    • “Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible”
    • “It can be very expensive to try to convince the markets you are right.”
    • “There are old traders and there are bold traders, but there are very few old, bold traders.”
    • “I would add that I consider myself and how I do things as a kind of system which, by definition, I always follow.”
    • “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.”
    • “Trying to trade during a losing streak is emotionally devastating. Trying to play “catch up” is lethal.”
    • “The elements of good trading are: 1, cutting losses. 2, cutting losses. And 3, cutting losses. If you can follow these three rules, you may have a chance.”
    • “Losing a position is aggravating, whereas losing your nerve is devastating.”
    • “The markets are the same now as they were five to ten years ago because they keep changing – just like they did then.”
    • “Luck plays an enormous role in trading success. Some people were lucky enough to be born smart, while others were even smarter and got born lucky.”
    • “Having a quote machine is like having a slot machine at your desk – you end up feeding it all day long. I get my price data after the close each day.”
    • “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.”
    • “If you can’t take a small loss, sooner or later you will take the mother of all losses.”
    • “It is a happy circumstance that when nature gives us true burning desires, she also gives us the means to satisfy them. Those who want to win and lack skill can get someone with skill to help them.”
    • “Risk no more that you can afford to lose, and also risk enough so that a win is meaningful.”
    • “Dramatic and emotional trading experiences tend to be negative. Pride is a great banana peel, as are hope, fear, and greed. My biggest slip-ups occurred shortly after I got emotionally involved with positions.”
    • “Be sensitive to subtle differences between ‘intuition’ and ‘into wishing’.”
    • “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.”
    • “I usually ignore advice from other traders, especially the ones who believe they are on to a “sure thing”. The old timers, who talk about “maybe there is a chance of so and so,” are often right and early.”
    • “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. Losing a position is aggravating, whereas losing your nerve is devastating.”
    • “I intend to risk below 5 percent on a trade, allowing for poor executions.”
    • “I don’t judge success, I celebrate it. I think success has to do with finding and following one’s calling regardless of financial gain.” (On losing streaks and over-trading) “Acting out this drama could be exciting. However, it also seems terribly expensive. One alternative is to keep bets small and then to systematically keep reducing risk during equity drawdowns. That way you have a gentle financial and emotional touchdown.”
    • “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.”
    • “Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.”
    • “Fundamentals that you read about are typically useless as the market has already discounted the price, and I call them “funny-mentals”. However, if you catch on early, before others believe, you might have valuable “surprise-a-mentals”.”
    • “If you can’t measure it, you probably can’t manage it… Things you measure tend to improve.”
    • “The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system.”
    • “If you want to know everything about the market, go to the beach. Push and pull your hands with the waves. Some are bigger waves, some are smaller. But if you try to push the wave out when it’s coming in, it’ll never happen. The market is always right”
    • “To avoid whipsaw losses, stop trading”
    • “Pyramiding instructions appear on dollar bills. Add smaller and smaller amounts on the way up. Keep your eye open at the top.”
    • “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.”
    • “Our work is not so much to treat or to cure feelings, as to accept and celebrate them. This is a critical difference.”
    • “Before I enter a trade, I set stops at a point at which the chart sours.”
    • “Trading requires skill at reading the markets and at managing your own anxieties.”
    • “The positive intention of fear is risk control.”
    • “Speculate with less than 10% of your liquid net worth. Risk less than 1% of your speculative account on a trade. This tends to keep the fluctuations in the trading account small, relative to net worth. This is essential as large fluctuations can engage {emotions} and lead to feeling-justifying drama.”
     
    #49     Jan 22, 2018
    S-Trader, Simples, Sprout and 2 others like this.
  10. So what did he mean? In a nutshell your beliefs create your illusionary reality. Your beliefs are yours because you wanted them at some point (you created them or accepted them) in your life and you still have them. Therefore you playout your beliefs with the market and get to experience them, so you get what you want.


    The long version…

    Ed comes across as an awakened person. This is simply a declutching of the mind, or realising that you are not your mind, you are the observer of your mind. There are many ways to understand this level of consciousness. Modern pathways could be A Course in Miricles (a book), Sri Vadya & Oneness University (both in India), Byron Katie to name a few. Eastern belief systems such as Taoism, Zen, Buddhism all take you there. There are many many paths to awakening. Some people just have an awakening event such as Eckhardt Tolle and Byron Katie.

    When you realise you are not your mind, and you get to “see” your thoughts from the third person perspective and you really identify with something that is not your mind, your higher self, you get to observe the many beliefs (simply statements that your mind makes), that make up your personality and create your experience. These beliefs are what drive your behaviour. Many beliefs are decided by us from our experiences, some are given to us from our parents, our society, our governments, basically everything external to us that we ultimately have believed is true to us at some point. Most of this conditioning is unconscious. Ed basically means that what you believe consciously or unconsciously is what you will get from the markets. And there is nothing truer than this not only from the markets, but from life. Life is simply the projection of what you believe. You experience what you believe.

    Van Tharp says you don't trade the markets, you trade your beliefs about the markets. Same for life. You don't live in the world you live in the world of your beliefs that you project to create your experience.

    Mark Douglas states something great in his book Trading in the Zone.

    “The market is neutral, in the sense that it moves and generates information about itself. Movement and information provide each of us with the opportunity to do something, but that’s all! The markets don’t have any power over the unique way in which each of us perceives and interprets this information, or control of the decisions and actions we take as a result.”

    Everything external to us is neutral. It is our beliefs that create our experience of the external environment by judging it and giving it meaning. Nothing else does other than us. Some may agree with our beliefs which makes them “truer” for us but they are still an illusion. Mark Douglas also gives another example in his books. A boy has been bitten by a dog, badly, when he was a child. Now he experiences fear whenever he sees one, no matter how friendly the dog may be. So he sees two other kids happily playing with a dog, but he can’t understand how the kids aren’t afraid. He is afraid because he had an event where he decided “all dogs are dangerous, they will hurt me.” This is now a belief of his. The other kids happily playing with the dog obviously don’t share that belief. They are not experiencing fear, they are experiencing joy. Therefore, the projection of the beliefs of each of the children is what creates each reality. The kid doesn’t realise he is projecting his fear to create his reality, it is just his reality. Like telling a fish it is in water. If the kid was in a state of awareness, he could see his thoughts arise, hear the belief statement in his mind “all dogs are dangerous, they will hurt me” and decide whether this is a useful or non useful belief for him. If he deems it to be non useful then there are ways to reconcile this belief to make it obsolete. If it is useful then he can keep it.

    Or a trading example, this is very simple but it makes the point. A trader experiences fear every time he goes to pull the trigger for a trade and he can’t figure out why. He is doing everything his system says to do, he sees his signal, recognises it is familiar, feels fear, freezes and doesn’t trade. This fear creates a reaction in him that narrows the information he perceives in the environment, and he focusses his attention on all that can go wrong. So this is his experience. He experiences fear simply by projecting his state onto the market. The market wasn’t doing anything. It was just ticking up and down. The trader was fearful and projected that state onto the market, so he thinks it is the market making him scared, when in reality it is him making him scared. Lets say he does some work on his mind and understands that his fear is from a statement “my wife will kill me if I lose money.” He goes and asks his wife if it is ok if he blows up his account as he is just learning. His wife says no worries. The belief deenergises. He goes back to trading, goes to pull the trigger and experiences the market ticking up and down, he sees his signal, recognises it is familiar, feels calm about it and pulls the trigger. The same exact experience is now calm. Nothing changed externally to him but it all changed internally. The market was still ticking up and down. It was simply his belief inside him changed so his experience changed.

    So Ed is saying that everyone gets what they want from the market. That’s like saying the water is wet. Everyone gets everything they want in life because they are YOUR beliefs and you are responsible for them. The Zen like statement to this though in my opinion (a useful belief!) is that it is possible to become aware of even your subconscious thoughts, and it is possible to move beyond them to experience closer points of objective reality, the “What Is”. Therefore funnily enough that is my reality.

    If you read/audio book Byron Katie “Loving What Is” and do 50 Judge Your Neighbour worksheets you will gain a huge edge in the markets, and likely understand deeply what Ed is saying.
     
    Last edited: Jan 27, 2018
    #50     Jan 27, 2018