
Ed Seykota: The Father of Computerized Trading
Ed Seykota is a pioneering trader, widely regarded as the father of computerized trading systems. His career, which began in the late 1960s, revolutionized the industry by blending technology, psychology, and disciplined trend-following long before algorithmic trading became mainstream.
Starting his career at a brokerage firm, Seykota gained access to early mainframe computers. Instead of relying on gut instinct like his peers, he began programming and testing trading rules based on historical data. Though initially met with skepticism, his systematic approach yielded extraordinary results, famously turning one client's account into a legendary 250,000% gain over 16 years.
His core philosophy is famously summarized by the phrase, "The trend is your friend." Key elements of his strategy include:
Trend Following: Identifying and riding market trends with discipline.Strict Risk Management: A relentless focus on cutting losses quickly while letting profits run.Trader Psychology: He believed that a trader's subconscious beliefs ultimately determine their success or failure, famously stating, "Everybody gets what they want out of the market."
Seykota's success is attributed to his unique ability to combine technology with simplicity and a deep understanding of human psychology. While others fought the market, he flowed with it. His legacy is not just his contribution to systematic trading, but also the timeless lesson that mastering oneself is as important as mastering the markets.
📌 Whether you're a discretionary trader or building your first system, this episode will challenge how you think, trade, and manage risk.
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