SEYKOTA's method?

[funky]

Quote from gms:


I think Seykota reasons that daytrading/very short term trades are riskier exactly because of the reasons you give. There are more trades the shorter term trader takes, and there's a risk with every trade, so there's naturally overall more risk.
Also, short-term traders have to find the next trade every day/ every moment because they're not committed in longer term trends. More work!

Every penny of profit is more critical when you're in for a short term, as opposed to a much longer term, especially given that you can reach a BE point and have a reduced risk trade you can ride the rest of the however long the trend goes. Less pressure.

And while the argument for the effects of short term compounding sounds as if it would be a benefit, compounding does work both ways, for you and against you, and short term losses can compound and erode that much faster in short term trades. I guess that falls under "more risk" as well.

don't take this the wrong way, but you aren't making logical sense. more trades don't equal less risk/reward. it is more risk, but more reward. of course its more work, putting on more trades will always be more work, and with that comes either, as you so graciously put it, more gains or more losses.

its just a faster game. if you're good, its a faster way to grow $$$, if you're bad, well......

just as seykota says on his site, the market tends to work in fractals, each timeframe giving the same setups, just in different magnitudes.

 

[Trend Fader]

Here is an important fact that you have to remember.. involving longer term trading... and thats volatility of equity curve..

It is practically impossible to have a completely smooth equity curve when trading longer term... for obvious reasons... (you have to ride out the volatility of the market)..

Mainly.. some short term traders or hedgers... enjoy extremely smooth equity curves...

I have read in places that Seykota's account was extremely volatile... and so were the accounts of the turtles.. just another reason why most wont be able to really tolerate such a trading method in real life...

Look up short term trades like Steve Cohen, Monroe Trout... and you will see they were both short term traders... with miniscule drawdowns... Seykota was the king of wild drawdowns...


--MIKE

 

[Trend Fader]

I believe reading somewhere that one of the wizards traded with Seykota and couldnt imagine how he deals with those wild drawdowns.. and because of these wild equity swings he parted ways with Seykota...

I personally can not deal with such wild swings... even if it costs me performace...


--MIKE

 

[gms]

Quote from freealways:

>>Gms, there is nothing contradictory between projecting tops and following trends.

the context of my post was whether Seykota projects tops. I don't think he does from my reading of his posts.

Quote from funky:

don't take this the wrong way, but you aren't making logical sense.

Again, I'm assessing what I understood from reading Seykota's posts, that being the context of this thread.

 

[jack hershey]

Quote from PoundTheRock:



Yes, he did mention that he used pattern recognition as well.

The thread starter made some good points as does funky.

Ed being out of MIT as an electrical engineer has some terrific stuuf in his formal training going for him.

The MA's suggestion as a tool he uses is not very likely. It is so far below the radar for a science trained person that it would never be considered.

I read a lot and Ed and Soros turn out to be my favs.

You can believe me when I say that my EE and Theoretical Physics training really sets one aside from the herd.


The KISS type of profiting that he uses is not too difficult to fathom, if a person has his training and also has traded for a little under 50 years.

I track many trading approaches and I always keep my eyes open for ways to improve each of them.

Ed's forte is that he knows how to perceive the markets and he knows how to keep himself "clean".

This thread presents all the clues and just needs to be nudged to assemble them.

The cleansing of myths is so important. We all see them in those who post here. You will not see any myths in what Ed says.

 

[jack hershey]

Quote from jack hershey:




The thread starter made some good points as does funky.

Ed being out of MIT as an electrical engineer has some terrific stuuf in his formal training going for him.

The MA's suggestion as a tool he uses is not very likely. It is so far below the radar for a science trained person that it would never be considered.

I read a lot and Ed and Soros turn out to be my favs.

You can believe me when I say that my EE and Theoretical Physics training really sets one aside from the herd.


The KISS type of profiting that he uses is not too difficult to fathom, if a person has his training and also has traded for a little under 50 years.

I track many trading approaches and I always keep my eyes open for ways to improve each of them.

Ed's forte is that he knows how to perceive the markets and he knows how to keep himself "clean".

This thread presents all the clues and just needs to be nudged to assemble them.

The cleansing of myths is so important. We all see them in those who post here. You will not see any myths in what Ed says.

The market is a clear and simple uncomplicated mechanism or system. It's structure is very straight forward. Prices and people. Values and volume. prices and volume are the variables.

Two variables taken two at a time.

Ed sees where he wants to play. That is the fractal talk here. It comes down to two things: how often and how to understand the timing for that oftenness.

 

[jack hershey]

Quote from jack hershey:




The market is a clear and simple uncomplicated mechanism or system. It's structure is very straight forward. Prices and people. Values and volume. prices and volume are the variables.

Two variables taken two at a time.

Ed sees where he wants to play. That is the fractal talk here. It comes down to two things: how often and how to understand the timing for that oftenness.

If you understand a syatem (it's structure, process and the results available) and you choose to operate it a a specific frequency, then all that is left to do is optimize it.

That's what people do with systems and money making.

It's my belief that Ed is not in a rush and he understands how much money a system can produce. He stays very clean as he does stuff.

 

[jack hershey]

Quote from jack hershey:




If you understand a syatem (it's structure, process and the results available) and you choose to operate it a a specific frequency, then all that is left to do is optimize it.

That's what people do with systems and money making.

It's my belief that Ed is not in a rush and he understands how much money a system can produce. He stays very clean as he does stuff.

so using an analogy like fluid mechanics fo Ed is a natural as an electrical engineer. A lot of EE stuff is explainable in terms of water. I took all kinds of non EE courses in engineering school.

What you do is skim the book and see that there is a parallel in all of he specialties in engineeering. There are a bunch of equations and they all look alike except for the symbols of the variables. I, unfortunately, often pissed off professors ,etc, by making this point.

There is no simpler analogy than water flowing.

Here are the points it makes.

Water doing things does not jump around from one state to another. It changes reasonably consistently. Knowing this, you are in a KISS place. You do not need a lot of detailed data to fool with.

To look at the market, Ed zooms in when changes are coming up.

 

[jack hershey]

Quote from jack hershey:



so using an analogy like fluid mechanics fo Ed is a natural as an electrical engineer. A lot of EE stuff is explainable in terms of water. I took all kinds of non EE courses in engineering school.

What you do is skim the book and see that there is a parallel in all of he specialties in engineeering. There are a bunch of equations and they all look alike except for the symbols of the variables. I, unfortunately, often pissed off professors ,etc, by making this point.

There is no simpler analogy than water flowing.

Here are the points it makes.

Water doing things does not jump around from one state to another. It changes reasonably consistently. Knowing this, you are in a KISS place. You do not need a lot of detailed data to fool with.

To look at the market, Ed zooms in when changes are coming up.

Ed sees the markets for what they are.

Ed picks an operating point in periodicity (all of EE is periodicity) and Ed knows how the market flows.

When an important event is probable, Ed looks at things by zooming in. He just goes to the faster data he needs at the end of a market day.

What Ed doesn't have to do is very important.

1. no daily monitoring needed for his operatinf frequency (fractal).

2. he can look at faster fractals in the evening by "catching up" before the next open.

3. Ed is smart enough to let the market take him into investments instead of guessing what is ahead. What does he gain by this:

a. lower risk.
b. trends he goes into are established
c. he can simply use market tools to protect himself at the en of the established trends he enters.

 

[jack hershey]

Quote from jack hershey:



Ed sees the markets for what they are.

Ed picks an operating point in periodicity (all of EE is periodicity) and Ed knows how the market flows.

When an important event is probable, Ed looks at things by zooming in. He just goes to the faster data he needs at the end of a market day.

What Ed doesn't have to do is very important.

1. no daily monitoring needed for his operatinf frequency (fractal).

2. he can look at faster fractals in the evening by "catching up" before the next open.

3. Ed is smart enough to let the market take him into investments instead of guessing what is ahead. What does he gain by this:

a. lower risk.
b. trends he goes into are established
c. he can simply use market tools to protect himself at the en of the established trends he enters.

What does Ed get by entering late and leaving early?

As an EE he knows that the steepest part of the sinusoidal curve is the middle part of the trend. enter late , leve erly and thus have a higher money velocity.

You can see that MA's have been left in the dust by ED.

He isn't using indicators, just price and volume and a fractal that he goes to to see whats up by zooming in after hours.