Ed Seykota Quote

I read a lot of e-mails this morning asking for me to e-mail last nights quote. I will post it here for everyone to access if they would like.

“If you can't take a small loss, sooner or later you will take the mother of all losses. There are old traders and there are bold traders, but there are very few old, bold traders. 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. I prefer not to dwell on past situations. I tend to cut bad trades as soon as possible, forget them, and then move on to new opportunities. 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. Trying to trade during a losing streak is emotionally devastating. Trying to play "catch up" is lethal. 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. One evening, while having dinner with a fundamentalist, I accidentally knocked a sharp knife off the edge of the table. He watched the knife twirl through the air, as it came to rest with the pointed end sticking into his shoe. "Why didn't you move your foot?" I exclaimed. "I was waiting for it to come back up," he replied. Losing a position is aggravating, whereas losing your nerve is devastating.” ~Ed Seykota

For anyone short on homebuilders, today's activity has me worried. Here is a intraday snapshot on RYL. If it sustains this price move, and closes above resistance, I will cut my loss, and exit the trade. I guess that is a possibility when trading an interest rate sensitive stock through an interest rate sensitive environment. Go figure?!

For those who think homebuilders might rally, you could try selling an Aug 45 and leg into a credit spread, but only if you are really bullish on this stock/group.

I will throw another post up in a few hours.

Thanks for letting us know your website. I finally found it. Working today, didn't have a stop loss on RYL, but I see that you are very concerned about it. I see that you have taken your lines from a diagnal lines to horizontal support and resistence. With the new's coming out today on interest rates, and it seems that the Fed will pause in August. Trying to figure out if the price has been priced into the market? Does that happen Jeff? CMED is coming back up on old resistence at 24.00, could you possibly comment on CMED. I noticed the industry gapped down today. Well, I surely enjoyed your class last night, but I will be saving this website. Hopefully you will see the comments, it's 12:07 ET...Will you will in the conference in Orlando? I believe it is a 3 day or 4 day event? I was called today from John F. Hopefully all is well Jeff. Thanks for creating this website...I will be on it everynight!!! Thanks SO much.


Bradley and Jennifer

Post a Comment

About me

  • I'm Option Addict
  • From Saratoga Springs, Utah, United States
  • I am a professional trader and an instructor for Investools. I've had relations with the markets for 9 years. Born in Concord, CA, but reside in Saratoga Springs, Utah. Father of THREE, Husband of one.
My profile

Prescriptions Here!

Other stuff

Blogarama - 
The Blog Directory
Directory of 
Finance/Business Blogs Finance 
blogs Top Blogs Finance Blogs - BlogCatalog Blog Directory