Discussing the article: "Automating Classic Market Methods in MQL5 (Part 8): Ed Seykota's Trend Following System"
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Check out the new article: Automating Classic Market Methods in MQL5 (Part 8): Ed Seykota's Trend Following System.
The article presents a full MQL5 implementation of a multi-symbol trend system: dual EMA crossovers for entries, ADX to avoid ranges, ATR to normalize position size, and a heat monitor to cap total portfolio risk. We explain the architecture, calculation details, and entry/exit logic on daily bars. The result is a practical EA template for systematic, risk-aware portfolio trading.
Ed Seykota graduated from MIT with a degree in electrical engineering in 1969 and joined a brokerage firm in 1970. Within a year he had built one of the first computerized trading systems in history—programmed in FORTRAN on punch cards fed into a mainframe computer. The system identified trends using exponential moving averages and sized positions based on market volatility. He ran it every night and placed orders the following morning. Likewise, he held positions for weeks to months. Furthermore, he did not watch intraday prices.
Seykota's approach differed from earlier trend-following systems (including the Turtle system in Part 5) primarily because of the portfolio-heat concept. Seykota recognized that running multiple positions simultaneously created aggregate risk that was invisible if you only looked at each position individually. Ten positions risking 2% each do not imply 2% total risk. If all positions move against you at once, total risk is 20%—a frequent outcome in correlated markets. He capped total portfolio heat at a defined threshold and refused to open new positions once that cap was reached regardless of how compelling the signal was.
This heat management is the article's central contribution. Seykota's system is explicitly multi-position. The EA manages multiple instruments, tracks total heat on each bar, and blocks new entries once the cap is exceeded.
Author: Tola Moses Hector