The Trading Tribe

Ed Seykota's FAQ
Home | Send Mail to FAQ | Resources | Ground Rules | FAQ Index



TT_Chartbook



Contributors Say Ed Says
Dec 19, 2016

Secrets and Deception

Ed,

I know that in trading there are hidden secrets...

This is a hidden secret - indicator settings.

If the standard indicators set up properly, you can see trends and extreme points. Most lose money because they use the wrong setting indicators.

All books are promoting the wrong indicators setting in which it is impossible to earn. Also the same thing I see in the video, where people use the wrong time frames in the indicators.

The problem is not in psychology, because even knowing own psychology, but bad tools it is impossible to make money.

I do not agree that the problem of trading in psychology. The problem is in pattern recognition.

To earn money you need to be able to see patterns. A pattern can be seen only with the correct indicator settings. Do you think books authors deliberately deceive people? Where to start promoting wrong indicator settings?
Thank you for sharing your process.

You tend to attract what you keep in your thoughts; in this way you see what you believe.

You might consider taking your feelings about <secrets and deception> to Tribe as entry points.


Albert and Marilyn

View this image up close
and from across the room.

http://cvcl.mit.edu/papers/Oliva-
HybridImages-ArtPerception2013.pdf

Dec 18, 2016

Reversion Methods

Hi, Ed.

Do you agree with the fact that the behavior of financial markets has changed due to algorithmic trading and mathematical theories?

The algorithms have become widely used theory of mean reversion. Therefore, when the old trend following strategy open positions algorithms and mathematics open opposite positions as a mean reversion.

We have seen that trend following traders like John W. Henry and Richard Dennis began to suffer losses. In the 80-s trend following traders were just lucky, because there was no return to the average price. Richard Dennis started getting losses when the price began to come back to the average price. Bruce Kovner because of his great talent was able to adapt, to adjust to the changing market.

Time larger trends in the past. I think today we must take small trends. Open positions in the runaway price of the average price, take profit when it reaches the maximum deviation from the mean. Then open opposite positions when the price begins to return by the maximum deviation to the mean and take profits at the average price. Take small trends, rolling back and forth. Am I right?

Thank you for raising these issues.

I deal with the interplay of trend traders and reversionists in my book, Govopoly in the 39th Day in these chapters: Trend Following (pages 297-312) and in Trading Robots (pages 313-335).

I do not think that algorithmic trading (using computers to trade) makes as much difference as the basic algorithms traders use.

Traders generally follow whatever algorithm works well in recent history.  During periods of equilibrium markets they gravitate to reversionistic methods; during periods of trending markets they gravitate to trend-following methods.

The interplay of these two approaches can account for the generation of the classic run-and-consolidate pattern.  During the run phase, the trend followers prevail at the expense of the reversionists - and help to accelerate the discount.  During the consolidation phase the reversionists prevail at the expense of the trend followers - and help to attenuate the volatility.
  



The Run-and-Consolidate Pattern

A classic in physics
and in trading.

Govopoly in the 39th Day, pg 151


Dec 16, 2016

Voices of Failure

Ed,

I make progress on my business plan this week.  I sit down today but do not accomplish much. 

Today I hear negative voices in my head.  Typically these voices/thoughts say mean things about other people now the words focus on me. I hear things about how I never have much success, how my parents do not support my dreams while growing up so why do I think I will succeed now.  I want the mean words to stop. 

Even this desire for the voices to stop seems to amplify the volume of hurtful words.  The words hurt because of their accuracy.

In the past I do quit when I meet adversity and sabotage myself when I taste a little success.  My mind wanders to the summer before my final year of secondary school. 

After much practice I finally dunk a basketball for the first time, when it happens I feel so much surprise. I can't believe it! After that I try and try to repeat the same feat with no success.  It feels as if my legs refuse to cooperate, I realize later my mind holds me back. 

I get in my own way.  I know I have to face the voices otherwise nothing changes and I can expect the same results as always ... failure surrounded by mediocrity.
Thank you for sharing your process.

You might consider taking your feelings about <voices of failure> to Tribe as an entry point.
Dec 14, 2016

TTP and Aborigines

Hello, Ed
 
Couple a days ago my friend have send me your book - The Trading Tribe. I have just finished reading it. I find this book and whole Trading Tribe process amazing! Thank you for writing and sharing your experience!

While I was reading a book a lot of feelings goes up. Many of them I even did not understand. I want to participate in TTP.

I live in the North Sweden in a small place. I think if it is possible to get information and participate in nearest TTP or even organize one in my place, but I am little afraid.

Do you think it is possible, and require some special psychological responsibility and psychological safety? I have a couple of, drum like tambourines already. Can it work same as drum? I also have some experience in Family Constellations practice by Bert Hellinger long time ago.
 
I respect your grand father. I have also a curious question about TTP.

Does this practice comes from some Aborigine Tribes, which I know, rich in different experience?
 
Best Regards, 
Thank you for raising this issue.

Tribe Members typically use percussive drumming to start the meeting -  to help tune into emotional processes and to synchronize intentions.

I generally have a wide range of percussion instruments on hand, including drums, sticks, shakers, guacharacas and even a digeridoo.

Many cultures, including the Aboriginal culture use music to celebrate spiritual values.  
For a musical metaphor for the communion of Aboriginal and Western processes, see:

https://www.youtube.com/
watch?v=cLu9GmV2vF0



We Didgeridoo

and sometimes
we didgeri-don't.

http://elmonomudo.com/2012/09/02/didgeridoo-la-
cura-contra-los-ronquidos-y-la-apnea-del-sueno/

Dec 14, 2016

Tribe Meeting Report

Hi Ed, 

I attend the Mumbai trading tribe since its formation one year back. I'm writing my first meeting update. Apologies for not writing earlier.  

The meeting started with a round of percussion, moved on to check-ins, and then discussing what has changed / happened between meetings and if there is anything particular that we felt and wanted to work on. 

One of our newest members took the hot seat for the first time and immediately went into feeling his feelings and responding to the process management and other receivers. The process was a basic forms process which went well and reached intense moments. It felt really good to see a new member be willing to experience his feelings.

The member starts with rubbing his palms and experiencing heat within him, the other Tribe members quickly encourage him to go deeper in the form and increase the intensity, the member eventually starts rubbing really vigorously and starts experiencing pain in his shoulders and arms, he eventually starts crying and we all encourage him to cry more. The sender keeps feeling and moves into other forms and keeps crying, he later says that he feels he’s been taking on too much and has been feeling tired and sad about it. He feels relaxed after a point and his process ends. 

I wasn’t particularly hot but especially after a good process by another member I was inclined to take the hot seat. Also, there were some feelings I had been wanting to work on of not being able to sustain efforts at work in order to achieve results while wanting them.

Right after talking for a bit I started rubbing my hands on the chair, the process manager told me to repeat that action and increase the intensity, the intensity increased substantially and I ended up burning my hand due to the heat from the friction, I had a smile on my face and called myself stupid to force myself.

The pain didn’t lead to any images or thoughts in my head. I continued with my process and entered different forms but the intensity wasn’t high. I eventually entered a form where my process manager pushed me a lot and I did start pushing a lot more from my side as I felt like pushing, the intensity increased and I started seeing visuals of my school sports field where I spent a significant part of time in school as I was sports person, the visual was of my practice sprint where I am pushing myself a lot more to reach the end point, I used to be a good sports person in school but was slow, didn’t have stamina, and lacked strength in the early years, but eventually was the opposite. I ended my process with a smile on my face. My process manager / Tribe leader tells me that this was the fourth or the fifth time in our Tribe’s short history where I’ve had visuals of my sports field. 

We took a small break and moved to our Tribe leader’s process. He had been expressing that he had been feeling sad and depressed for sometime and wanted to work on those feelings, however, he wasn’t feeling hot enough but still wanted to do the process. I managed the process. He entered a few forms but didn’t proceed with much intensity. He stopped following the instructions for a bit, then resumed sending with a much higher willingness. The intensity of forms increased, he stops after experiencing a form, after being asked what he’s feeling, he bursts into a fit of laughter, I ask him to increase the intensity, the other members encourage him to laugh more, he keeps laughing for a long time and his stomach hurts in the process, the entire Tribe joins him in the process of laughing while motivating him and keep encouraging him throughout. He feels much better and says that he hasn’t had a good laugh since a while. The process ends. 

The Tribe meeting moves to discussing how consistency is finally setting in the Tribe and its importance. We discuss that in the next 3 meeting we want to do the Goals Process. The meeting ends with a checkout and acknowledgment of each other’s support. 

Any input from you regarding how to go about the goals process will be extremely valuable. 

Thanks and regards,   
Thank you for sharing your process and for documenting your meeting.

I gather you generally use the Disappearance Process (Zero-Point Process) to deal with the feelings you have about your issues.

If you find Tribe Members bringing the same issues to meetings week after week, this may indicate your Tribe using TTP medicinally, to alleviate feelings rather than to deal with underlying patterns.

If so, you might consider proceeding on to the Rocks Process.  See more about this in my pamphlet, TTP Extensions that you can order from my site, above, or download as a PDF file for free.

In the Goals Process you mention, we identify your goal as the difference between what you want and what you have.  We then identify your blocks, what ever you see standing between you and achieving your goal. We then develop the feelings associating with your blocks.  Finally we take these feelings to Tribe as entry points.




Dec 12, 2016

Oprah and Donald - 25 Years Ago

Ed,

25 years ago, The Donald on Oprah saying what will happen.  This is very interesting.  Short video!

In case you have forgotten the U.S. is almost $20 Trillion in debt.  And most of it has happened under the present administration.

https://www.youtube.com/
watch_popup?v=MOKi5YeNtRI



Thank you for sending me this link.

In my book, Govopoly in the 39th Day (see above) I hold that the Govopoly System inexorably assimilates the Free-Competition Sector - and then perishes in chaotic inflation.

Cutting taxes and to building protective walls would have little effect on the growth of the underlying dynamics of the Govopoly System.

I do not sense much commitment to balance the national budget - or even to audit the Fed.

I forsee more of the same 'ol same 'ol - now under a different brand name.

My model indicates that even with a 50% reduction in regulations and with a freeze on debt financing, we would still face a decade or two of austerity before the economy regains its former vitality.

Politicians who promote austerity and take away entitlements rarely survive re-election.
Dec 11, 2016

Bees and Radial Momentum

Greetings Chief Ed,

I wonder if Radial Momentum helps to explain how bees are actually able to fly.

The assumption is that standard physics does not adequately explain how they can.

Here is a relating link:

http://www.livescience.com/
33075-how-bees-fly.html

Regards,

Thank you for sending me the link and for raising the issue about how bumblebees fly.

I do not see Radial Momentum as the major lift component.

I think that the author of the article improves our understanding by noticing the wings travel laterally (front and back) rather than vertically (up and down).

I do not agree that lift comes from "small hurricanes" above the wing. I think the lift comes from the angle of attack - that the bee can control and synchronize with the direction of the stroke.

The "eddies" above the wing come at a price, namely the energy to achieve stream separation - so the bee maintains these low-pressure areas at a net loss of energy.

Perhaps these low-pressure pockets help the bee develop a slightly concave-up wing cross section, particularly at the leading edge.


Scientists
don't fully understand
how bumblebees fly.

The bees ignore them
and do it anyway.

http://www.livescience.com/33075-how-bees-fly.html

Dec 11, 2016

Workshop

Ed,

Inquiring on next scheduled workshop.

Thank you
Thank you for raising this issue.

I have no Workshop in the works at this point.
Dec 11, 2016

Trading and Gambling and Destroying Life

Hi, Ed,

Have you ever thought about the fact that promoting trading, you destroy people's lives?

To make out gamblers people.

Trading - a zero sum game, in fact gambling. Therefore, only a few can win. Most people will never earn, and some earned, in the end, lose.

You are on the forum give people hope, but the majority will never come. Maybe we should reveal the truth to the people? How many people do you know personally who earn a lot of years on the trend following strategy?

Stable can make, in my opinion, only to inside, arbitrage, portfolio Investments.

If the trend following strategies, you can always earn money, why people who follow this strategy, not in the FORBES list? Open, please truth.
Thank you for raising this issue.

Gamblers generally create new and purposeful risks by instantiating games - such as poker, roulette or flipping a coin. They then place bets on the uncertain outcome.

Speculators generally assume pre-existing risks, allowing, say, a farmer or miner or banker to transfer these risks and to focus on other business aspects.

In the gaming industry, the casino owners ride trends in demographics and consumer preferences while casino clients gamble.

I personally know many people who credit successful careers to trend following.

Indeed, all the people on the Forbes list can credit their success to trend following.  The Silicon Valley wealth comes from identifying and riding strong trends in digital automation.

Those who fail to identify and participate in strongly emerging trends may lose out. Apple and Microsoft have enormous resources - and then miss the early signals to enter markets now under control by Amazon, Facebook, Twitter and Dropbox.

You might consider taking you feelings about <losing in the end> to Tribe as an entry point.
 


In the End
we all lose our lives.

Meanwhile, we can
go with the trends
or go against them.

https://felixstowedocker.blogspot.com/2016/07
/rip-felixstowe-dockers.html
Dec 11, 2016

Commander Data and Feelings

Hi Chief,

I am watching the Star Trek and notice that Dr. Soong, Data’s father / creator,  has a voice similar to yours, sometime his look also resembles you. |-)

I remember in a interview in Seattle, you say you want to be like Data, total logic. The more I watch Star Trek , The Next Generation, the more I start to like Data, as well as the crew. They are extremely self disciplined.

But I had a little confusion when I see that you want to be Data. Data has no feelings, and he always follow systems. But TTP value the positive intentions of all feelings. And we try to embrace and share feeling, and still be able to be disciplined and follow the systems. So Data does’t benefit from the positive intentions of feelings.

Your comment in the interview sounds to me like that we accept feelings because we have to. If we can be of without feelings , like Data, we would rather not to have feelings, and don’t care if it has positive intention or not.

I wonder if you can make a choice, being Data without feeling anything, or being a human with emotions when trying to follow systems. Which do you prefer?

Thanks,
Thank you for raising this issue.

As I recall, my Seattle comments pertain to acting like Data in one aspect: namely, in executing a mechanical system mechanically, without emotional over riding.

You do not have the choice you cite, about whether or not to have feelings.

You may have a choice about whether you  suppress your feelings (or) experience them fully.

I hold that the former leads to drama in your life and in your trading and that the later affords you the benefits of having your thoughts, feelings, goals and actions in alignment with right livelihood.

You might consider taking your feelings about <having feelings> to Tribe.



Dr. Noonien Soong

looks a lot like Commander Data
with some old-guy makeup.

http://www.startrek.com/article/trek-character-
who-was-the-best-father-is

To Top of Page