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June 11-20, 2004


Questions

(Quotes from Ed in Red)

Answers

Sun, 20 Jun 2004

 

Simple is Best

I have attached all the order files and brokerage statements for the past week. The only discrepancies occurred with two trade execution issues. One is a simple order entry error on my part, the other is an erroneous triggering of a stop order by my broker. I remedied both errors at very minimal expenditure of time, energy, and funds. All positions are consistent with my trading system math.

System 3 is going very well. I am following my current system and continuing research to improve the system. So far, all my testing points to a simplification of the system rather than the addition of any rules.

 

This is consistent with my experience as a profitable trader. I keep simplifying until I have something that cannot be made simpler without sacrificing functionality. My software provider is continuing to provide me with tools to test ever more complex twists on my strategy, and I keep finding that nothing beats some of the simpler ideas. I continue to test this week in an effort to uncover any weaknesses my strategy has before implementing the simplified rule set.

Since some of the more complex (and less robust, by my definition) rules of my system only take effect occasionally, this past week's trading is consistent with both the old rules and the new rules. No trades were signaled differently between the two. My aim is to have the "new rules" fully tested and implemented quickly, before a situation arises where trades that are not consistent with both systems are indicated.

Thank you for your continued support.

OK.

 

 

 

 

Clip: http://www.eriez.com/resources/

images/products/0068-15.jpg

 

 

Fri, 18 Jun 2004


Minneapolis Tribe Update


Ed,

We are pleased to report that the Minneapolis Trading Tribe now has 4 members committed to excellence and personal growth.

Congratulations!

Thu, 17 Jun 2004

 

TTP & Polarity Process


Dear Ed,

Today, I had a request from a fellow local TT member to support him. In the process, I decided to reread your web paper on Trading Tribe Process. Previously, I've read it several times. Surprise, again, I got something wonderful new from it. Life is such a wonderful surprise/present. I shared that experience with him also.

Last night at our regular local TT meeting, I and another member, both independently took the opportunity to use Polarity process to experience feelings we have been resisting, yet wanting to feel our whole lives. I love how TTP works: I gain so much just receiving the other member when he did his Polarity work, as I did doing my own, just different, yet supported my own life wonderful journey.

Thank you so much for sharing the process at the May Workshop. Our local TT leader, as always, expertly supported me in my Polarity work along with our fellow tribe members supporting me too. I have been resisting feeling both ends of this polarity issue my whole life wanting to feel them so much. After experiencing both ends of my issue independently, then, he said now show us how it would look if you were experiencing them both at same time. My initial reaction was can't do it, it won't work, then I just told myself to do it and did. Wow. We went through the process three times, it was similar, yet different. I love how this work supports my wonderful trend of ever more liberty in my life. It was great how our leader supported me expanding my awareness. Along with that, my ever increasing awareness and appreciation of what I life I am living now.

Thank you again for this gift that keeps giving to us and everyone we touch
in the world. As I said before, any other way I can help support you, just ask.

We are applying the Polarity Process to experiencing two complete forms simultaneously.

 

First, we fully experience the forms at the start and end of a major drama.  Then we proceed to experience them both in the now.

 

The forms tend to synthesize into a new form and the original forms tend to disappear.

 

The process tends to occasion substantial emotional resolution, deep AHA's and surprising pleasure.

 

 

The Poles of a Magnet

want to get together

 

While they are separate

they attract lots of drama.

 

When you connect them

with a keeper bar

they no longer attract anything.

 

Clip: http://www.eriez.com/resources/

images/products/0068-15.jpg

Thu, 17 Jun 2004

 

Hooked


Hi Ed,

I didn't come from a financial background. I began to suspect that I was able to develop a successful system because of that. My thinking is free and clear from the complexities of economic theories, technical man-made indicators and other things that I don't take into consideration when I trade.

I graduated from [University] with Ph. D. in Psychology where I took strenuous courses in advanced statistics. Odds and probabilities were always of great interest to me as well as the philosophical meaning of all things in life.


In addition, I am always skeptical about traditional theories and teachings. I always question any traditional way of doing things no matter what the subject is. When I get interested in a subject, I always get to the bottom of the matter, no matter how much time and effort it might take.

At one time in my life, I played the horse tracks professionally, North and South. It required enormous concentration and hours and hours of study of race track past performances. I also developed my own system on how to bet football and basketball games during the season.

As I said, the financial world never was of much interest to me, but when I was introduced by chance to electronic trading about four years ago, I was hooked. I studied and traded a number of mechanical systems and became convinced that no automatic system would hold for a long period of time.

I came to the conclusion that only a human mind can react successfully and continuously to the changing patterns of stock market trading. The trader has to possess specific psychological characteristics, such as quick judgment, ability to make detached, non-emotional decisions and have the endurance of waiting for hours and hours for the right situation without getting bored ...  able to sit for hours and hours in hiding, waiting for that right moment to jump out and strike ...

My psychology background also allowed me to watch for human mass psychological motivation that often governs intraday trading. I also use advanced psychological concentration techniques that help me to stay focused for long periods of time.

As for indicators, I use odds, probabilities, trace speed, volume and chart patterns, but not the ones that are in all the text books, but my own pattern recognition, that I don't bother to define since they are rather complex and I am not in the teaching business.

A couple trips to the hot seat usually cures traders of the urge to day - trade, to trade on non-definite indicators and to use the markets to work out dramas.

 

 

 

Hooked

 

 

 

Clip: http://us.vclart.net/vcl/

Artists/Julia-Denny/hooked.jpg

 

 

Thu, 17 Jun 2004

TTP Youth Report


Yesterday [my son] and I are driving home after a rousing racquetball match. He asks if we can go [a] movie. I say "I'll think about it."

After a few moments, he says "Dad, what's standing between you and taking me to the movies tonight?"

"Well, I'm thinking about what others in the family might have planned, that I'd like to studying programming tonight, stuff like that."

He says, "So how does that make you feel?" I go from thinking to feeling. I answer.

"Good. Just totally experience that. What color is that feeling?" The indecisive feelings pass. I know he's got me.

After a few minutes, "So Dad, what's standing between you and taking me to the movies tonight?"

"Nothing." Later that evening we both enjoy the movie .....

No arguments. No whining. No retreat into sullen teen moodiness. He's good at it.

You teach TTP by example.  Good job, Dad.

 

 

Sometimes we Teach the Most

 

just by being there.

 

Clip: http://image.guardian.co.uk/

sys-images/Guardian/Pix/gallery/

2001/03/08/2bluebird.jpg

 

Date: Thu, 17 Jun 2004

 

20 Hot Seat Sessions

and Lives to Tell About It.

Having resolved nearly all of my trading related issues and with the model account up close to 40%, I have decided to take a sabbatical from TTP and move on to other things.

TTP and the tribe has been a great journey and a life changing event. I started participating in TTP in May-03, with close to 50 meetings, 2 all day workshops and at least 20 hot seat sessions made all the difference.

A testimonial TTP does work, just stick with it. I mean I traded for 18 years, no kidding 18 long years, before I finally turned consistently profitable in November of 2003. I think if I can do it, anyone can.

Having shared so much, at such deep personal level, I consider each one of you to be a life long friend, I could not have done it without all of your support and generous time. I hope in turn I made a small contribution.

Interesting that you can stick with losing for 18 years and then quit after winning for about one year.

 

 

 

 

If you stick with TTP

and complete 50 hot seats

 

you are entitled

to your own personal

hottie.

 

Clip: http://www.tiscali.co.uk/shopping/

galleries/dressing_up_costumes/

images/large/emporio_fire_fighter.jpg

Mon, 14 Jun 2004

 

Guilt

Dear Ed,

I would like to share with you my first Hot Seat experience at the last Tribe meeting last Monday. I realized that I was unwilling to feel a lot of my feelings. I hope that I'll be able to work through these feelings with the Tribe so that it will not affect my trading. One of my unresolved feelings was feeling guilty over losing ... money.

 

The Tribe helped me to accept guilt as an ally. I think the positive intention of guilt is to motivate me to trade better and to make money. Before the Hot Seat, I thought guilt was a "bad" feeling, something to be ignored and forgotten. It turns out that I could not ignore or forget the feeling because Fred kept creating drama to remind me.

 

I see now that if I can improve my ability to feel my feelings I can be become a better trader. Another unresolved feeling that I had was feeling lonely ... However, I cannot see what the positive intention of feeling lonely is. I would love to hear any thoughts you may have on my recent Hot Seat experience.

Guilt rarely arises from losing - since the possibility of loss is generally part of the trading agreement.

 

Likely, your guilt has more to do with not keeping other parts of your trading agreements.

 

Not Guilt-T

 

One positive intention of guilt

is to support integrity. 

 

Some people are chronically unwilling

to keep agreements,

to feel guilt, or to exhibit remorse.

 

Clip: http://www.cafemeg.com/noshirt.htm

Mon, 14 Jun 2004

 

Commitment !

Dear Ed,

I learn a very important lesson, and that's commitment. It is one of the rules in my System 3, and it is an area I've been focusing on as we've been discussing. When I hear your voice mail, it really strikes me. A lot of emotions and feelings come up. I mean, here it is, arguably the greatest trader ever lived, honoring his commitment to a seemingly unimportant person on a seemingly unimportant issue. It may not be significant to you, but it is very much to me!!

So I just want to say thank you! Even though I didn't get to talk to you on
Saturday, I still learn an extremely valuable lesson. Honoring all my commitments, not matter how small they may seem. I don't make them lightly, and I treat every one of them seriously if I do make them.

 

This last weekend it keeps swirling in my head commitment, commitment, commitment, and commitment.

 

I am very ready to be committed. And I start to be a committed person - NOW. I am proud to say that I keep my commitment to take my feelings to the hot seat last week (as I sent you an email about it), and I have kept my commitments today (as in my System 3), and I am very determined to keep them until June 30th. You have shown me a great example, and I know what it takes now. THANKS!!!!!!

OK.

 

 

Commitment

 

 

Clip: http://www.tomklare.com/

glitch/commit.html

 

Mon, 14 Jun 2004

 

Opportunity



Mr. Seykota,


I have read about you in numerous places and I know that you have been a great mentor to many young traders. I am under the impression that you don't manage money anymore, but can you suggest anyone who might make a good mentor for a young, ambitious guy with an extreme passion for the business.

 

I have been inspired by trading since I was in middle school and I have worked at a few places throughout college and landed at [Trading Firm] on an equity trading desk. I think that I have a good feel for the markets and I also am sure that I have what it takes to succeed. Please let me know if you have any suggestions. Thanks for your consideration and time.

FAQ does not endorse people or commercial products.  See Ground Rules.

 

When the student is really ready, the teacher appears.

 

I suggest you rewrite your,

"I have been inspired by trading,"

in SVO-p.

 

 

 

Inspire

 

Latin īnspīrāre 

in-, into. + spīrāre, to breathe.

 

Clip: http://members.models.com/

avantgarde/images/breathe.jpg

Mon, 14 Jun 2004

 

Taking Life's Final Exit



Ed -

I read an interesting news account of people nearing death having extra-personal (out of body) experiences. I think these accounts are similar to those outlined in Stanislav Grof's books and in my personal experiences during Breathwork sessions - and especially the accounts of others.

Yes, near death experiences, as well as extreme emergency, hyper - ventilation, hypo - ventilation, focused breathing, spinning-induced dizziness, hallucinogens, spontaneous enlightenment and mystic practices -  all seem to deliver people to states similar to those we regularly obtain with TTP.

 

TTP seems compatible with other practices.  Furthermore, it's legal, free, non-addictive, non-fattening and fun.

 

 

 

In his book Life After Life, Dr. Moody describes accounts of people who have  near-death experiences. These accounts range from relatively brief events, where a person may see the bright light for only a few moments, to where people report communicating with a presence on the other side.

 

Clip: http://www.ghostvillage.com/legends/

2003/legends25_08232003.shtml

Sun, 13 Jun 2004

 

My Trading and My School

 

Dear Ed,


I am running a preschool in a small town of
India. Perhaps because I spend so much time with two, three, four year olds that I feel very much in touch with my feelings and my instincts.

 

I read your comment about schools not allowing emotional intelligence to develop and would like to tell you that my school is so different. My teachers are trained never ever to look down on children. We like to express our feelings with them and encourage them to do so. We do have a good curriculum and my results are fantastic. Almost 90% of my school children are able to read before they are six years old.

 

Their math skills are exceptional. There is no scaring and putting children down in the school. They have full freedom to express their views on anything, from their teachers attitude, to the playground equipment in the garden. Their views are then discussed and taken very seriously.

 

The new teachers find all this very odd but then find the atmosphere therapeutic. I want to tell you about my trading now. I have been in this business for a few years but saw trading success only two years back. My broker was very supportive and encouraging and that really helped me to do well.

 

As is usual when one is really committed then things automatically start going right. But then my broker and his wife had a car accident and died on the spot. I saw this as a signal that I should not trade and have not done so for the last 18 months. I miss it so much. I really need to talk to someone who loves the market as my broker did and I do. I needed to tell you this because I am not yet healed. Thank You for reading this.

The standard approach, throwing more and more money at broken educational structures - is no substitute for the hands-on dedication to inspiring students that you describe.

 

Good job!  Thank you for daring to walk the path of the true teacher - in spite of institutional impediments to doing so.

 

Your students are lucky to have you at the helm.

 

You might consider assembling a tribe of teachers and money managers.

 

In public schools today, little is safe from commercialization and privatization. A wide variety of companies and corporations are attempting to take over virtually all of the work traditionally performed by school district employees, from teaching to providing student transportation to cooking meals to cleaning and maintaining school buildings and grounds, and more.

 

Typical Position

of Public Sector Unions

 

Healthy concern about their own jobs.

 

Clip: http://www.nea.org/privatization/

Fri, 11 Jun 2004

 

Aha

 

[I am contemplating your statement:]

Ed Says: "Your real trading system is the set of feelings you are unwilling to experience."


Aha.

 

Thanks.

Yes.

Fri, 11 Jun 2004

 

Bogus Site


Dear Dr. Seykota,

After coming across your name in Market Wizards and becoming fascinated and
rather struck by your words I started to track down more information and came across this link. It doesn't seem like your style so I concluded it was a bogus site and thought I'd forward it to you.

http://www.tradestars.com/

content/trading-Ed-Seykota.asp

I did find your trading tribe site in that search and I am reading through the past posting before I ask questions that may already have been answered. Redundancy is wonderful and necessary for Aircraft and weapon systems, but your time is too valuable to be answering something already asked.

I'm looking forward to participation.

Thank you for this site.

If someone claims someone else's Money Management System, you might ask them how their  Integrity Management System works.

 

 

How to Tell if They are Lying

 

see if their lips are moving

 

Clip: http://www.tw.rhino3d.com/

gallery/render/images/Lips.jpg

Thu, 10 Jun 2004

 

Feel my feelings (System 3)


Hi Ed,

Thanks for your suggestion of taking my feelings into TTP last night. I did just that and it is some amazing experience. I write it down here so that I don't miss any details. I look forward to hearing your insights. Thanks!

-----

I have been working on the issue of commitment (System 3 Rule #1).

 

I know what's important to me in the pursuit of my goal in managing risk (System 3 Rule #2). I need a risk management plan, and I am approaching it by creating my own framework to run large scale back tests, and check the P&L curves with my feelings (System 3 Rule #3) to see if I can handle the drawdowns. What's between me and risk management is having this framework
built.


What's between me and having this framework built then? It is my putting off working on it. I know it is important to me, and yet I usually leave it as the last job to do on my daily "Must-do" list, and in certain cases almost missing it.


So I take it into TTP, and the feeling is pushing it away and ignoring it. Then I feel bad for ignoring it.


I don't feel like hearing the cheering from the receivers, and so I block my ears. And then somehow I don't know how it starts but I block my breathing. I am holding my breath. And then somehow I find myself sucking any remaining air inside, and thus feeling a lot of pressure and even dizziness. I keep holding my breath until to a point where I cannot stand it any more, and I cough up and grasp for breath. I am torturing myself here. But somehow I get right back to it and increase the intensity. I go deeper and hold my breath longer.


I don't like this feeling but I get back to it anyway. Whatever I am doing is the right thing. So despite the suffering I get back to this holding breath until I choke. As the pain increases it helps with the receivers' encouragements. I feel like I am being tortured by some authority (like prisoners of war being questioned), and I am suffocated almost to death (yet unaware at the time it is me who is suffocating myself).


I get back over and over, and the reaction is more violent, catching my breath even harder, cry out ever louder. Tears of pain keep rolling.


Mucus build up to the point where I can't breath through my nose even if I want to. I just need to close my mouth, suck the air out until it feels like a vacuum inside and at that point I'll choke really hard. With the encouragement of the receivers I get it going, as if I am in a race running and they are cheering me up to hang on. One more step. One more step. One more step.


When the receiver asks what stands between me and my goal, I feel like what's blocking is this feeling. If I can hold my breath long enough, then I can just let it explode and "cleanse" me. So I need to get back to it.


The suffocating pain intensifies, and more and more I don't feel like getting back to this feeling. The receivers keep encouraging me, so I get even deeper. It gets so painful to a point that I actually jump off the hot seat as it explodes. I get back slowly, and I hit the ground again. With my hands on the ground I am trying to regain some strength. I feel exhausted. But deep inside I feel very good. I feel like a warrior. I feel like a football running back who refuses to go down, and is ready to get back up every time he gets down, and ready to face running into a wall of tackles again. I really feel good about that.


As I get back to the hot seat the pain lessens a bit. More and more I see how pointless it is for me to be doing this. I have proved that I have a commitment. That's what I am craving for, the commitment like a running back getting back up every time he falls. I am punishing myself. I can actually breathe as long as I choose to. I can choose to breathe.


So that's what I do. As I retest that feeling of holding my breath and my receiver telling me "Do it the way I like it," I just let go and actually breathe. I can breathe. I blow my nose, all clear, and I breathe with ease. Breathing very well, comfortably and peacefully. I think I can stop self-sabotaging or self-punishing.


It is a very intensified session and the receivers were in awe. I thank them for their continuous support and cheering. Looking back I cannot believe the pain I've gone through, and the torturing path that I have
chosen to take.

Good work - you sound as if you are moving toward freedom. 

 

You might check with your family about your own childbirth.

 

Complications can assume the form of oppressive restraint, even drowning.

 

 

 

Complications During

Formative Struggles

 

may leave a complex of feelings

to experience later

 

Clip: http://www-sop.inria.fr/prisme/

fiches/Medical/childbirth_small.gif

 

Fri, 11 Jun 2004

 

Dear Ed,

Thank you for your prompt response. In few words and one pics I learn more about myself then in few years trading.

Can you develop a little bit fractals in data please ?

Do you mean (when you speak about fractals) that its possible to take advantage (developing good trend following systems ) on smaller time (5 minutes) frame as well as on larger time frame (weekly) or were you just pointing out the behavior of price ?


Please can you develop fractals in relation to risk management? risk reward ratio on smaller time frame (ex:15 minutes) compare to risk reward ratio on larger time frame (ex:weekly bar)?


Please can you give us your opinion about developing trend following system based on smaller time frame compare to larger time frame?


I find this an important question for smaller equity speculator in their research.


Thank you again for the faq (big mine of knowledge and wisdom)


Thank you for sharing that with us.

I have 16000 of flying hours , I like the research and development you make on the mechanic of fluid with the radial momentum approach. This is really a revolutionary approach and you will probably need a lot of courage facing the old theoretical community ;<).


Big fundamental problem !.

Best regards


PS: Sorry about clarity my home language is French.

High frequency trading is about as efficient as high frequency flying (going cross country by taking airplane trips of about 10 minutes at a time).  Yes, you can do it, and yes, the "frequent flyer" costs are high.

 

One problem with devoting your life to confronting the "theocritical" community - is that eventually you develop a following and become a theocrite yourself.

 

 

HFA

High Frequency Airlines

 

Six flights every hour.

 

Clip: http://www.hcbffa.com/airliner.jpg

 

Fri, 11 Jun 2004

 

Checking Out

Hi Ed,

Just want to say to everyone in the IV-Tribe that you are all Winners and I am thankful to you for your contribution to my evolution. Thank you Ed for being you.

Love, Peace and Happiness to you and yours

PS. see you at "the breathing experience"

Yes.  I am planning a weekend of TTP and Focused Breathwork, for members of the Incline Village Tribe and graduates of either the May or November TTP workshops.

 

Applicants must also demonstrate conceptual mastery of the material at: http://primal-page.com/sgrof.htm

 

 

 

Focused Breathwork

can be uplifting

 

Special invisible hot seat optional.

 

Clip: http://suramm.hihome.com/

image/breathing.jpg

Fri, 11 Jun 2004

 

Essay on TTP

 

I always though that trading was a way of being more then a way of  doing.

 

Truly traders are notoriously self-reliant and fiercely independent. I realized after few years of trading that the interplay of the ego and the subconscious, is, essentially impossible on my own, but rather natural in a group or tribe.

I understand that Fred  Controls our Actions, Instinctively.

Information enters the mind through the senses and flows to Fred. Fred is the part of the mind some call the subconscious.

The Conscious Mind gets information from Fred and applies logic and judgment and figures things out.

Wisdom is  the Result of Fred and CM Working Together.

Fred and CM naturally and continually carry on these cooperative dialogues.

In a healthy individual, Fred sends protective warnings (PW's) and CM responds wisely.

Interruptions in the Flow of Experience ceates  repeating dramas.

Modern society teaches us to suppress our All this suppression interrupts the vital link through which Fred communicates Experience to CM.

When this interruption of the transfer of experience occurs, Fred continues to replay the experience, at higher and higher levels, to try to inform CM.

Fred always has a positive intention, and everyone always gets what they want (reminds me of Ed Seykota interview with Jack Swagger), or at least what Fred wants. Protestations and denials from CM only confirm the syndrome.

 

TTP intentionally leaves out a lot of the methods that people normally try to implement, like providing information, promoting action, offering guidance and enrolling in drama.

 

I understand the importance of attending meetings because:

 

Tribe meetings are often as much an exercise in not doing things as in learning new methods. The primary tools of the Trading Tribe are sharing feelings, mirroring, pacing and encouraging each other to be exactly the way we are.

 

TTP goes with the flow, validating feelings at every step, encouraging people to act and feel exactly as they do.

Proselytizing is converting someone to your faith or doctrine.  Proselytizing is a form of telling people what they "should" believe.  TTP is not a belief system; it is a process to assist people to develop their own beliefs. To the extent TTP, itself, becomes a belief system, and people try to convert people to it, it is no longer TTP. 

TTP spreads by receiving others, supporting them to be themselves, as they see it.  

 

I apologize for my little knowledge of psychology and hope you will accept me as a member.  

Yes.