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Trading Education Posted by Team Topstep September 12, 2017

Legendary Futures Trader: Win or Lose - Everyone Gets What They Want Out of Markets


This week, in our series that of insights from Jack Schwager’s original Market Wizards, we look at Ed Seykota’s belief that win or lose, everyone gets what they want out of markets. (Read our first piece about Paul Tudor Jones’ 7 trading rules here.)

Ed Seykota is one of the most under-the-radar, but legendary futures traders of all time. In the 1970s, he pioneered computerized trading systems and became one of the most prophetic systems traders in the market. How good was he? $1 invested in his trading firm in 1972 was up 250,000 percent just 16 years later.

In the book, Seykota said, “Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.”

This is certainly counter-intuitive thinking. Why would anyone think that someone who loses money in the market is getting what they want? Let’s dig into it.

Seykota’s belief centers in his understanding that trading is 90% mental. He shares an anecdote:

“I know one trader who seems to get in near the start of every substantial bull move and works his $10 thousand up to about a quarter of a million in a couple of months. Then he changes his personality and loses it all back again. […] He gets a lot of excitement, he gets to be a martyr, he gets sympathy from his friends, and he gets to be the center of attention. […] On some level, I think he is really getting what he wants.”


From Seykota’s perspective, his friend is a great trader – but one that changes his behavior when things are going well. He knows what he’s doing. He shouldn’t do it. When he does, he is choosing excitment over profits and getting what he wants in the process.

While we think that markets are more challenging than Seykota’s comment implies, this is an interesting thought-provoking perspective.

What is holding your trading back? Do you fall into the same negative trading patterns? Why?

Here’s how Seykota recommends traders improve:

“One of the best ways to increase profits is to do goal setting and visualizations in order to align the conscious and subconscious with making profits. I have worked with a number of traders in order to examine thier priorities and align their goals.”

Need help with internal introspection?
Our Performance Coaches can get you on the right track.