Edward Arthur Seykota (born August 7, 1946) is a

commodities In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a co ...

trader, who earned S.B. degrees in

Electrical Engineering Electrical engineering is an engineering discipline concerned with the study, design, and application of equipment, devices, and systems which use electricity, electronics, and electromagnetism. It emerged as an identifiable occupation in the l ...

from

MIT The Massachusetts Institute of Technology (MIT) is a private land-grant research university in Cambridge, Massachusetts. Established in 1861, MIT has played a key role in the development of modern technology and science, and is one of the m ...

and Management from the

MIT Sloan School of Management The MIT Sloan School of Management (MIT Sloan or Sloan) is the business school of the Massachusetts Institute of Technology, a private university in Cambridge, Massachusetts. MIT Sloan offers bachelor's, master's, and doctoral degree programs, a ...

, both in 1969. In 1970 he pioneered Systems trading by using early punched card computers to test ideas on trading the markets. Seykota resided in

Incline Village, Nevada Incline Village is a census-designated place (CDP) on the north shore of Lake Tahoe in Washoe County, Nevada, United States. The population was 8,777 at the 2010 census. It is part of the Reno− Sparks Metropolitan Statistical Area. Until the 2 ...

, on the north shore of

Lake Tahoe Lake Tahoe (; was, Dáʔaw, meaning "the lake") is a freshwater lake in the Sierra Nevada of the United States. Lying at , it straddles the state line between California and Nevada, west of Carson City. Lake Tahoe is the largest alpine lake i ...

, but recently moved to Texas.

Career

As a young man he attended high school near

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Netherlands ) , anthem = ( en, "William of Nassau") , image_map = , map_caption = , subdivision_type = Sovereign state , subdivision_name = Kingdom of the Netherlands , established_title = Before independence , established_date = Spanish Neth ...

and also lived in

Voorburg Voorburg is a town and former municipality in the west part of the province of South Holland, Netherlands. Together with Leidschendam and Stompwijk, it makes up the municipality Leidschendam-Voorburg. It has a population of about 39,000 peop ...

. In 1970, he pioneered a computerized trading system (now known as Trading System) for the futures market for the brokerage house he and Michael Marcus were working for. Later, he decided to venture out on his own and manage a few of his client's accounts. Much of Seykota's success was attributed to his development and utilization of computerized trading systems to which he first tested on a mainframe IBM computer. Later on, the brokerage house he had been working for adopted his system for their trades. His interest in creating a computerized system was spawned after he read a letter by Richard Donchian on utilizing mechanical trend following systems for trading and also Donchian's 5- and 20-day moving average system. He was also inspired by the book

Reminiscences of a Stock Operator ''Reminiscences of a Stock Operator'' is a 1923 roman à clef by American author Edwin Lefèvre. It is told in the first person by a character inspired by the life of stock trader Jesse Livermore up to that point. The book remains in print (). ...

Edwin Lefèvre Edwin Lefèvre (1871–1943) was an American journalist, writer, and diplomat, who is most noted for his writings on Wall Street business. Biography Lefèvre was born George Edwin Henry Lefèvre on January 23, 1871 in Colón, Colombia (now ...

. His first trading system was developed based on exponential moving averages. ''Ed Seykota, Market Wizards'' Seykota improved this system over time, adapting the system to fit his trading style and preferences. With the initial version of the system being rigid, he later introduced more rules into the system in addition to pattern triggers and money management algorithms. Another aspect of his success was his genuine love for trading and his optimistic demeanour. This factor sustained his efforts to continuously improve on his system although he never changed the response indicators of the system and instead fine tuned market stimuli.

The Trading Tribe

In 1992, Seykota gathered together a group of traders to discuss their emotions, due to his concern that traders often allow their emotions to overrule their logic. They start gathering regularly and Seykota develops methods to support personal growth. Over the years it expands to include Tribes all over the world and people in many professions. Members help to develop a common set of practices Seykota calls TTP, the Trading Tribe Process. He describes these ideas and practices in his book ''The Trading Tribe'' (2005) and its refinement in an online article called ''TTP Extensions: Replacing the Zero-Point Process with the Rocks Process'' (2013).

Books

*''The Trading Tribe'' (2005) *''Govopoly in the 39th Day'' (2013)

Influence

In '' Market Wizards, Updated: Interviews With Top Traders'', author Jack D. Schwager devotes a chapter to Seykota and writes that his "achievements must certainly rank him as one of the best traders of our time."

References

External links

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