Ed Seykota: The Legend of Trend Following

Ed Seykota, a Dutch-born commodities trader, has carved his name as one of the trading legends with a consistent trend-following approach. With his remarkable achievement in growing client funds by an astonishing 300,000% in 12 years, Seykota has become an inspiration for many traders worldwide.

Career Journey

Born in the Netherlands in 1946, Seykota later immigrated to the United States and completed his education in electrical engineering at MIT and management science at the MIT Sloan School of Management in 1969. His career began as an analyst at a brokerage firm, where he started developing computerized trading systems in the early 1970s.

Trading Philosophy

In his personal experience, Seykota faced significant losses before finding a trading method that suited him. He tried various strategies, including following broker recommendations, but without satisfactory results. However, after discovering the trend-following theory from Richard Donchian, everything changed. He realized that the market always moves in trends, and mechanical trading systems that follow trends can be highly profitable.

Consistency in Trend Following

Seykota became famous for his consistency in following trends. He built simple trading systems based on trend-following principles such as the 4-Week Donchian rule and the 5-20 Moving Average. For him, the key to success is consistency in following a tested trading system.

Valuable Advice

For traders, Seykota offers valuable advice. He emphasizes the importance of closing positions immediately when experiencing losses and letting profits run with the trend. He also highlights the importance of having the courage to cut losses when necessary, as greed and unwillingness to admit mistakes can lead to larger losses.

With a passion for his work and high optimism, Ed Seykota has made a significant contribution to the world of trading. His simple yet effective approach to trend following has inspired many traders to follow in his footsteps towards success in dynamic financial markets.

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