1 The Story
The first computerized trend follower
Edward Seykota (born 1946) is an MIT-trained trader who built some of the first computerized trend-following systems and turned a small stake into a fortune riding long futures trends. He was profiled in Jack Schwager's Market Wizards.1
He fused mechanical trend following — ride winners, cut losers, manage risk — with trading psychology, famously saying that everybody gets what they want out of the markets.1
2 The Big Idea
Follow the trend; mind the trader
The system rides trends — but the person running it decides whether it works.
Seykota mechanised trend following before most traders had a computer, yet insisted the method was only half the battle. The other half was psychology: discipline, self-knowledge, and the humility to let a system do its job.1
3 The Method
Systematic trend following
Ride winners
Stay with a trend as long as it runs — the big winners pay for everything else.
Cut losers
Exit losing trades quickly and mechanically; small losses are the cost of doing business.
Manage the trader
Method and mindset are inseparable — discipline and self-awareness make or break the system.
4 Try It Today
Test the idea for yourself
A no-risk exercise
On a long trending chart, mark every spot a trend-follower would have been stopped out for a small loss, and the one big move that paid for them all. Notice the pattern: many small losses, a few large wins. That asymmetry is the whole game.
5 In Their Words
Ed Seykota, quoted
"Everybody gets what they want out of the markets."— Ed Seykota, in Market Wizards (Jack Schwager)1
6 Watch & Read
Go deeper
- TRADERRichard Donchian — the trend-following forefather.
- CONCEPTTrends & Market Structure
- PLAYBOOKThe Donchian Channel Breakout
- BOOKMarket Wizards — Jack Schwager
§ Sources
- "Ed Seykota," Wikipedia — en.wikipedia.org/wiki/Ed_Seykota