I remember reading about Seykota years ago when in Schwager's "Market Wizards", a highly recommended book for those looking to trade.

He was one of the first to use computers to trade in the 70's. Something I've learned over the years is trying to be out any time the market is down is an absolute fools game. The way to make money is to be in on the big trends and letting them ride.

Seykota's 5 trading rules

1. Ruthlessly cut losses

"The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses," he said.

2. Let your winners ride

3. Don't bet too big

As a rule of thumb, the most Seykota is willing to risk on any particular trade is about 5%.

4. Stringently adhere to your systems

5. Know when to divert from your process

"As I keep studying the markets, I sometimes find a new rule which breaks and then replaces a previous rule," he said. "This seems to be part of the process of evolution and growth of a trader."