34 Comments

  1. Don't know where this legend of $5k to millions came from. What I read on wikipedia about this guy is:
    "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."
    Once again another "trader" that didn't use his own money. I would seriously love it if someone could produce just one "trader" that only used his own money and didn't start some kind of fund and trade other peoples. Please…. I am being serious. I have yet to see one example of a person who used only their own money and made millions.

  2. "If you can't take a small loss, sooner or later you will take the mother of all losses" I believe that Seykota is referring to the concept of stop loss. If you can't position a stop loss in a trade because you don't want to lose, you are not managing your risk, and this fact at one point will bring on your account the mother of all losses. That is how I understand this concept.

  3. Hi Rayner, I think you've missed a few key points. But overall good job.

    Let's focus on the 10th rule which you don't get. Losing streaks by trimming down allows you to stay mentally able to trade. Think about it this way. You keep losing, so instead of losing your cool and being frozen, you trim back. Say you started with $100,000 account. You risk 1% of that. $1,000.

    Now let's say you have a gradual drawdown to £80,000 you risk 1% of that which is $800 per trade. Hence your risk is less. If the system you have is statistically sound you should never blow out. And in the long run, when trends start to form again you make it all back with some profit.

    But let's take it further… say you have $100,000, you loss $20,000 instead of 1% you now risk 0.8% of £80,000. Then say its $60,000, you risk 0.6% of $60,000. This way you are able to play the game longer. Say the account goes back to $80,000…. Then risk 0.8%, if it goes to $100,000 then risk 1%.

    Trying to play catch up means risking 2, 3, 4, 5% on the next trade trying to make back what you have lost. This is lethal because it can lead to drawdowns which you cannot recover from. And more volatility in your account.

    Remember a key point. Longevity.

    I hope this helps.

  4. Great video, Market WiZard just say some sentence of word and Rayner can analyze what his meaning about. I think Rayner is not only the market analyze, he is also a person analyze too xD

  5. Thank you my friend 🙂
    QQ: can you do an episode on options!!? im new to it but would like to utilize my shares for covered calls and maybe learn how to set up puts properly. Im trading from a tfsa acc in canada so its the only way I can short a stock or index.

  6. Rayner. I can’t thank you enough for your sharing. After watching almost all of your videos and read your two books, I still can’t find an answer to how to set trailing stop loss such that when price hits MA, I get stopped out. Would that be 1 ATR, 2 ATR from the previous high?

  7. The problem with point #4 is that if I do not have a big capital, trading fees are eating a big % of my trade that I put in. I am obligated to put big % of my account or I am getting in the red every trade I take

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