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Pictures and captions reproduced with kind permission of Ed Seykota, please note that the below material is (c) Ed Seykota, you may not reprint without his permission. Roger Medcalf 2006




The answer from previous page


The cost of 3 eggs in Zimbabwe in 2008


 100 Billion Zimbabwe dollars 

Fundamentalists typically feel their analytics 

eventually control events. Trend Followers are

content to submit to the flow of events


Trend Followers don't stick around to convince

Mr. Elephant that he is supposed to be somewhere else.





The Positive Intention of Fear is risk control. 




Your experience of collapse may depend on your position.




To get off the hook, go with the flow.




These days people are showing a lot of concern

that markets are different and trend following

methods no longer work.

 I recall, in the old days, people showing a lot of concern that markets are different and trend

following methods no longer work.





January, 1900 Pronouncement: The Markets Seem Different Now.....




Not using stop losses is like.......




Sure thing, no worries, Of course I'll take good

care of the chickens for you.




Risking 100% on a trade and watching it closely,

can have all kinds of interesting side effects.



Carrying a heavily complicated system around

with you,  can lead to interesting drama.



The Plover


 Lives on pieces of food and leeches

he finds in the mouths of crocodiles.


Good legs are helpful

in this line of work.


The Crocodile allows the Plover to enter its mouth

and take bits of food.  The Plover gets a free meal

and the Crocodile gets clean teeth and gums.


The Trend Trader allows scalpers to take a few

points here and there, against the day when he

just wants to keep buying and buying and buying ...

and the scalpers get to experience drinking out of

a fire hose at close range.





Fundamentalists know when

to catch a falling knife.



When it's cheap


So do trend traders.



 When it stops falling





As trading frequency increases, the profit potential

per trade decreases, while the transaction costs

remain the same.



High-Frequency Roll-Off


Occurs in stereo speakers

and in trading systems.




Computers are particularly useful for scanning lots

of stocks and finding the ones that are trending.




It lets the water pass through

and catches the pasta.





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Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.











  • Futures, Forex and Stock trading contain substantial risk and are not for every investor.

  • An investor could potentially lose all or more of the initial investment.

  • Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle.

  • Only risk capital should be used for trading

  • Only those with sufficient risk capital should consider trading.

  • Past performance is not necessarily indicative of future results.