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May 21-31, 2004


Questions

(Quotes from Ed in Red)

Answers

Mon, 31 May 2004

 

Shorts

Hi Ed,

I don't see any shorts in the trading system definition. Without trading the downside haven't you lost half of the opportunity for profit?

 

I believe that stocks behave differently on the down side vs. the upside and so symmetrical systems don't work really well.

 

However, that doesn't mean that you should ignore the downside all together.

Your collaborator mentions that the system is for stocks and then in his money
management portion he is talking about contracts. Is this system meant for
stock futures?

Thanks for your FAQ,

Yes, the trader has no provision for shorts in his system.  It also has no provision for selling pretzels at baseball games, another profit opportunity.

 

You might clarify your meaning by re-writing without using the word, "should."

 

I do not know to what "collaborator mention" you refer - please specify your reference by page, date and title.

 

 

What You Should Do

 

can twist your thinking

into pretzels.

 

Clip: http://filebox.vt.edu/i/ibertmar/

pages/backgrounds/backrandom/

pretzels.jpg

Mon, 31 May 2004

 

Cool Hand Luke

 

I only sent part of my previous message ... here's the rest.

 

[My Son] was observing that if he holds his hand up in front of his mouth --- about an inch away--and then exhales with his mouth open onto his palm, that the breath he feels on his palm feels warm. However, when he puts his lips together -- like he is going to whistle--then blows out onto his palm again, that it does not feel warm, but much cooler on his palm. He wonders why this is so. I thought for a bit and speculated with him that when his mouth was in the whistling position that perhaps the air was coming out of his mouth faster than when he was breathing out on his hand with his mouth open. I suggested that maybe the air being blown on his hand was taking the heat away from his skin and making it feel cooler. Or that maybe the air was being cooled as it traveled at a faster speed. Do you have any thoughts or an explanation for this? Thanks much.

On another note, we recently went to 'orientation' for the school [My Son] will be attending in the fall. It appears to be a satisfactory environment, but it would be nice if schools included more 'emotional intelligence' teaching into the curriculum. I believe developing a school's curriculum around ... feelings and personal responsibility has great potential for developing kids (and adults as well!).

1. Air circulation promotes evaporation and tends to cool things off (wind chill effect).

 

2. Air flowing from high pressure (cheeks) to low pressure (whistle stream) cools off, by Pv=nrT. 

 

You and your son might like to devise some experiments to determine if either is responsible for the cool hand effect.

 

In running this experiment, and in waiting for schools to stimulate emotional intelligence, don't hold your breath.

 

 

 

If Fire Needs Air

 

I wonder how come

we can blow out candles.

 

Clip: http://www.mtwthailand.org/Team

/Missionaries/Veldhorst/Veld%20Photos/

2001/James%20B-day%20

blowing%20out%20candles.jpg

Sun, 30 May 2004

 

The Monte Carlo, Rather Than Pair Wise

Calibrations Results

Showed a Positive Expectation


Hi Ed,

I was annoyed at a stock in my portfolio. It was down 55%. The system am using issued a sell stop on another stock that was down only 15% and held the 55% looser. ďYet another interpretation on selling losers and letting winners run,Ē I said to myself.

To pacify Fred, I took your advise and reduced my position size according to a stocks volatility and proceeded to recalibrate the system and to see how sensitive it was to this new advice. I rather than using a pair wise optimization, I use a Monte Carlo technique.

What struck me was that in comparing the calibration results with the baseline not much changed. The Monte Carlo technique varies the parameters (breakout, exit Ö) over a larger range of values. The calibrations results showed a positive expectation ó not the best but not bad.

 

The lesson I learned was the following a system even if it not that great is better than not following a system.

 

Parameters are incidental, sticking to a system is compulsory. The calibration results, also explained, to me, that even systematic random trading is better than no system.

I would appreciate your comments.

Thanks for the great FAQ.

You might try re-writing your post so that a 4-th grader can understand it.

 

 

 

Some People Have to Work Hard

to create confusion.

 

Others just seem to have

a knack for it.

 

Clip: http://www.uvm.edu/~mstorer/

escher/stuyck/woodtriangle.jpg

 

Sun, 30 May 2004

 

Deep Fears


Dear Ed,

Last week I ... want to go scuba diving with my friends. I recall having this desire for about 10 years. I am claustrophobic and fear suffocating -- so I am afraid to scuba. On Wednesday, I realize that I want to test whether I can use TTP to overcome these deep fears and achieve my desire to scuba.

 

I sign up. The first lesson in the pool is difficult. My mind is busy setting up the drama big-time. I am breathing fast and shaking during most of the lesson and sure enough, the first time I go under water, I panic.

 

I immediately stand up and thrash about until I get my face out of the water-- mask and respirator off.

 

I relax. I ask myself if I'm willing to feel and accept the feelings that will come with the panic. I say yes and I go back under the water. This time, in about 8 feet of water, I accept the panic attack as it happens ---- heart rate zooms, throat tightens, can't swallow, muscles tighten, etc I experience all that I'm feeling. I do not push away or judge the sensations ... I actually believe I hear myself saying "hmmm--that's interesting", and"ok".

 

I do not have a sense of time for this but the panic passes. I swim around. At some point I laugh and choke so I surface again -- but this time with a feeling of joy. Next, I swim underwater in the pool for about 20 minutes. I feel ready for the ocean dive to 30 feet.


The boat trip to the dive site is exciting but I start to think -- can I do at 30 feet what is possible in the pool. I start to think that I will panic -- perhaps 8 feet is okay because subconsciously I know I can easily get to the top. I just sit there in the boat and enjoy all the feelings that come up with these thoughts.


We arrive at the reef. I get into the water and start down. I remember I am excited. As I reach 20 feet , I feel a sense of unease. I stop and accept that the feelings are ok, the unease dissolves and I go on. I go to 30 feet and swim around the reef for 35 minutes. To me, this is a miracle.. I look at everything -- I point things out to my friends. My life is better because of TTP. This is just one example. Thank you for sharing your process.

Congratulations on going deep with the process.

 

 

 

The depths contain

many interesting critters.

like a Galatheid Crab on lophelia

 

 

 

Sharks May remind Us

 

that one of the positive intentions of fear

is risk control.

 

Clips:

http://www.naturalsciences.org/

education/deepsea/gallery.html

http://www26.brinkster.com/

larine/shark.jpg

 

 

Sun, 30 May 2004


Interesting Article on Self-Control

This article (link below) implies conscious (non-natural) self-control is a negative, as it drains energy. Seems accurate with my experience.

http://www.apa.org/monitor/

jun03/selfcontrol.html



That you have "accurate" experiences - is consistent with liking to logically control your feelings, and consistent with fear of letting your feelings free to inform your decisions.

 

 

Yes, Dear, Of Course I Love You

 

Just look at this proof, a readout

on my respiration rate, blood pressure,

glucose, and pupil dilation.

 

These readings are 99% accurate

as to my experience,

so that proves it once and for all.

 

So I hope you do not find it necessary

to bring this matter up again.

 

Clip: http://home.att.net/

~jeff1_satobserve/cp09.jpg

Sun, 30 May 2004

 

Decision Making

Hi Ed

Could you please tell me what process you use to make very 'large' life decisions.

 

I have been using a variety of methods for a while, such as PrOACT (problem definition, objectives, alternatives, consequences, trade-offs) and pros/cons, but I have a very large life decision coming up, that involves changing career, changing country potentially, staying in the US but in another city, and potentially changing firms (multiples alternatives are appearing at once).

You have been very successful, so I would be honored to have some insight as
to the processe(s) / system(s) you use for making such large decisions.

Thank you very much,

You do not provide specifics about your very large problem - only a generalization.   My guess is that your real pickle has to do with withholding information from others.

 

 

The Choice gets Clear

 

when you can feel

what's really important.

 

Clip: http://www.getfunnypictures.com/

crt242.html

Sun, 30 May 2004


Absence

Ed,

I just spoke with [Name] and he queried my absence last week from the Tahoe Tribe. I stated that I had not heard a reply from you concerning my status for re-admission. If I am still welcome than I will definitely be there in two weeks. Please advise.

Regards,

See Missing a Tee Time May 15, a response to your earlier excuse.

 

Also, you might like to re-view the admission requirements on the Tribe Directory page.

Sun, 30 May 2004


Risk the Analysis vs. Risk the Process

Before I jump into risk, allow me to compare analysis and process. When one analyzes, things stop and are constructed piece by piece. The mind takes the object of what is being scrutinized out of the process and records itsí state. A film editing is a good example. Movies provoke drama. One can take a series of frames and order them to produce an emotional effect Ė romantic mood. Order the frames again and one can produce and intellectual effect Ė the reasons why a character fell in love.

The process of experiencing risk is far more lethal than the analysis of risk.

 

Analytically, I set my risk at 7% and feel warm and fuzzy all over. However, when I experience risk, it tends to make my hair stand on end.

Risk as a process is scary.

You might consider taking your feeling of fear into the process.

 

You might also consider running some computer simulations to find your optimal risk amounts.

 

 

 

Warm and Fuzzy

 

for many professional traders

might be in the area

of about 1/2 % risk.

 

7% might be a bit hot and frizzy.

 

Clip: http://www.candidgraphics.net/

Pages/GraphicDesign/Images/

Warm-Fuzzy-Bunnies.jpg

Sat, 29 May 2004


Checking in --- and a Question


Hi Ed --

How are things, my friend? Hope all is well with your family.


Things here are going our kids are keeping us on our toes and are a lot of fun. They seem to be so different from one another -- [Name] is very intense and aggressive ... [name 2] is more laid back and passive. It's interesting to observe.


Anyway, I have a question for you. [Name] was observing that if he holds his hand up in front of his mouth --- about an inch away --- and then exhales with his mouth open onto his palm, that the breath he feels on his palm is warm. However, when he puts his lips together -- like he is going to whistle -- then blows out onto his palm again, that it does not feel warm, but much cooler on his palm.

 

He wonders why this is so.

Congratulations for raising a child full of wonder - a wonderful child.

 

 

The wonder of being full

with a wonderful child

 

Clip: http://katzphotos.com/pregnant.jpg

Fri, 28 May 2004


Under-Fred Question


Chief,

Can you describe the relationship, and specific differences if any, between
Jung's collective unconscious and the Under-Fred network? I understand such
questions may be outside the purpose and scope of the (trading-skewed) TT
writings but I have to ask anyway because I'm really curious about this!!

Ed Says: "Everyone has a Fred, and all the Freds connect together. Under Fred is the
primary communication network that connects all the Freds."


"Jung taught that the psyche consists of various systems including the personal unconscious with its complexes and a collective unconscious with its archetypes."

http://religions.myztek.com/

holbrook/colluncon.htm




Jung's Collective Unconscious contains cultural archetypes, myths and customs - language and imagery that we use to define our roles, our personalities, ourselves.

 

The Under-Fred Network connects our individual sub-consciousnesses.

 

If the Collective Unconscious is a catalog of dramatic roles we might play, Under Fred is the network we use to entrain each other to play them out.

 

 

 

Carl Gustav Jung 1875-1961

 

formulates archetypes

and then becomes one.

 

Clip: http://www.newgenevacenter.org/

reference/20th-1st2.htm#jung

Fri, 28 May 2004


Fred Alignment and Dreams,

per Carl Jung


Chief,

I have these questions about dreams and CM and Fred and TT.

I'm reading Carl Jung, his last book, MAN AND HIS SYMBOLS, written in 1961.

He writes about dreams and how dreams are a vital CM:Fred link. My experience reading the book is that the book is understandable in part from your writings on TT and my readings of it.

It seems the progression of thought on the CM:Fred connection is Jung, Erikson, Seykota ... I have checked the TT site for 'dreams' and have not found much.

Here's the thought from Jung that prompts my interest:

"For the sake of mental stability and even physiological health, the unconscious and the conscious must be integrally connected and move along parallel lines ... dream symbols are the essential message carriers from the instinctive to the rational parts of the human mind, and their interpretation enriches the poverty of consciousness so that it learns to understand the forgotten language of the instincts."

-Carl Jung, page 37, MAN AND HIS SYMBOLS, paperback edition

Can you consider a fairly detailed response on role of dreams in clear CM/Fred communication within the overall context of TT and TT processes?

Do TT processes prompt significant dreams [before, in-process, after] TT-process-generated insights/ahas?

Are feelings about dreams [invalid, valid, supervalid] inputs (or even entry points) into the TT process?

Does individual dreaming change in terms of significance (in any way) after TT aha/insights?

I hope I've articulated my questions regarding dreams and TT with enough clarity. Your writings are extremely interesting and I thank you for them.

Fred sends forms to CM in many ways, including dreams

 

A form may contain imagery, ideas emotions, feelings, thoughts, and somatic properties.

 

TTP is a process in which people  assist each other in experiencing forms, particularly ones that carry judgment and lie buried in k-nots.  

 

As a k-not loosens you may notice an increase in dreaming.

 

 

 

Dreams may Contain

symbols and images.

 

If you don't experience a form,

Fred may send you the real thing.

 

Clip: http://www.crab.rutgers.edu/

~pbutler/dream.jpg

Thu, 27 May 2004


Position Sizing Formula - Final

 

- FINAL VERSION -

Hi Ed,

Here is the final version of the position sizing formula for futures contracts, taking into account commissions. If you find it is accurate, please feel free to share it with other tribe members. Suggestions are welcome as well on improvement.

Graciously,


INPUTS
---------------------------
A= ACCOUNT SIZE
R= Risk % (i.e. entering 2 means .02 or 2%)
C= Commission per Round Turn per Contract
E= Entry Price
S= Stop Price
P= LONG/SHORT
U= Unit Cost (i.e live cattle =400, since a $1 move in cattle = $400)


OUTPUT
--------------------------
IF P=LONG, then

((A*R)/(E-S))/U=X

Y=X(round up to nearest whole number)*C

X-((Y/(E-S))/U) = POSITION SIZING OUTPUT (number of contracts to buy)

---------------------------
IF P=SHORT, then
((A*R)/(S-E))/U=X

Y=X(round up to nearest whole number)*C

X-((Y/(S-E))/U) = POSITION SIZING OUTPUT (number of contracts to buy)

In the moment of now, each event is the final one.

Thu, 27 May 2004

 

Position Sizing Formula - Disregard



Hi Ed,

Sorry to bother you. The commissions part is still not right. Please disregard my previous messages, and I will work on the formula some more. Feel free to offer suggestions if you like, which would be very gracious of you. Somehow I have to take the commissions times the number of contracts to be traded..

This formula is complicated to me, since the commissions part of the formula (second part) is dependent on the position sizing..

Thanks,

... hmmm ...

Thu, 27 May 2004

 

Position Sizing Formula - Correction


Hi Ed,

Sorry here is the correct formula I meant to post fro my last email. I had B in the equation which is really R.

INPUTS
------------------------------
A= ACCOUNT SIZE
R= Risk % (i.e. entering 2 means .02 or 2%)
C= Commission per Round Turn per Contract
E= Entry Price
S= Stop Price
P= LONG/SHORT
U= Unit Cost (i.e. live cattle is 400, or $400 for each $1 move)


OUTPUT
--------------------------
OUTPUT
--------------------------
IF P=LONG, then POSITION SIZE=

((A*R)/(E-S))/U=Y

Y-((C/U)/(E-S)) = OUTPUT
---------------------------
IF P=SHORT, then POSITION SIZE=

((A*R)/(S-E))/U=Y

Y-((C/U)/(S-E)) = OUTPUT

... hmmm ...

Thu, 27 May 2004


Position Sizing Formula

Hi Ed,

I am working on a position sizing formula for my clients, that takes into account commissions for commodities (but will work with stocks if Unit Size is set to 1 and you add up total commissions for two tickets).

I have spent a lot of hours on it. If you feel it is correct and useful, feel free to share it with other tribe members who might find it of value.

INPUT variables
---------------------------
A= ACCOUNT SIZE
R= Risk % (i.e. entering 2 means .02 or 2%)
C= Commission per Round Turn per Contract
E= Entry Price
S= Stop Price
P= LONG/SHORT (customer selects in a box)
U= Unit Size


OUTPUT
--------------------------
IF P=LONG, then POSITION SIZE=

((A*B)/(E-S))/U=Y (round up to nearest whole number)

Y-((C*(Y/U))/(E-S)) = OUTPUT
---------------------------
IF P=LONG, then POSITION SIZE=

((A*B)/(S-E))/U=Y (round up to nearest whole number)

Y-((C*(Y/U))/(S-E)) = OUTPUT

Cheers,

... hmmm ...

Wed, 26 May 2004

 

For Bears

 

http://www.nobodyhere.com/toren.hier

Some pyramiders just don't know how to give up.

Wed, 26 May 2004

 

Future TTP Workshops

Dear Trading Tribe,

I would like to ask Mr. Seykota if he would be interested in hosting a TTP workshop in the Boise, Idaho area. I am curious to know what Mr. Seykota requires - such as # of participants, cost of lodging, etc. - before agreeing to participate.

Thank you for your time.

Regards,

Your indefinite proposal induces indefinite interest.

Wed, 26 May 2004

 

They say they do

but when it happens

they act like they don't


Hello Ed,

Long time since my last e-mail. I have set up a little investment fund based on trend following, risk management and money management. All of my associates and clients (investors) are very familiar with the way the accounts will behave.

 

I have stressed that losing streaks will happen often and that they should be prepared for them. All of them repeated at least 3 times to me that they were absolutely comfortable with that and you know something: this is what is attracting a lot of money now (for my surprise). Also, I established the uncle point to the portfolio and stressed that the uncle point is an issue that must be very clear to all of them. Until they see the performance reach the uncle point level, they have no reasons to worry. I like to say: "If you see this happening (uncle point), then you can start imagining things and considering taking your money out. Please remember that."

To begin any sales conversation, I like to show last October performance (the worst in 12 months) with 7 consecutive small losses and a -6.02% drawdown to show everyone that this is something very likable to happen and I know things will get back on their feet again eventually. And then I show them November performance, which was boosted by the uptrend in EUR/USD and the model account had a gain of 25.68% only in November. The following months were also very profitable, since the trend continued in its way for 3 more months.

No matter how I point October's performance, people will look at November's. After that, one of my associates always likes to stress that they should look back again to October and make sure they understand that. You know what happens: people laugh and say "I know I know ... I already understood that!" It is like they only look to the long run performance - which is very good performance - and neglect the poor performance months.

Well, the fund was set up this month, which is developing into a bad month due to range bound currency markets. I'm very comfortable with that since I risk only a defined amount of cash and I follow a very clear trend following system which has shown consistent returns. Eventually I know 1 single trade can reverse a bad loosing streak.

The problem is: those who did not hear me are getting anxious specially because this is the first official month of the fund. I was very uncomfortable with the feeling of starting the fund with a poor performance - one that is already 0.3% worse than October's. I could hear enemy voices in my head questioning why this was happening exactly in the 1st month and how people would think (specially the ones who want immediate results) and how they could label me as a fraud because of this first month. This was very tough for me to handle since new thoughts about the end of the fund because of a poor first month arose. The consequence: a very disturbing hesitation towards trading the managed accounts.

Well, by accepting those strong feelings and accepting their good intentions I actually can feel now more congruence between those voices in my head (which now comes from my throat) and my own approach to trading - the approach I have with my own trading account which I now can apply to the managed accounts without hesitation. I don't worry anymore with the fact that the first month was a poor one because I was honest with my clients when I prepared them for something like this (and even worse, since the uncle point is very distant from the present drawdown) and I know they all remember that. I figured I have no motives to feel guilty and that everyone who is riding along is riding because they want profitability and if this is their real intentions, they should be prepared to accept losses from time to time - which they said they were. I actually started to receive support from my associates and they have been of great help standing up and supporting me through this loosing streak.

I'm prepared to live the moment of now again with a very important lesson. I hope that this experience can be of help to other traders who read the FAQ.

It was a honor to write again to you.
Thank you very much and my very best regards,

Thank you for sharing your experience.

Tue, 25 May 2004

 

Sticking to the System


Hello Ed,

I am diligently working with TTP. I take the hot seat several times a month, experience many AHA's accompanied by great emotional release.

However my behavior of not 'sticking to the system' still shows up.

My trading is fully automated (the computer monitors and sends in orders  automatically/electronically to the broker etc). The only thing I need to do during the day is to ensure that connectivity (DSL) is up and trading platform is up. To do that I have to be around during the day. Thus this leads to the 'urge' to take a peak at how my system is doing intra day and this leave the door open to Fred, so I end up tinkering with system trades.

The system is fully back tested, I have been using it in real time for the past 12 months, the results it is producing are in line with the back tested expectations. However due to my interference I am under performing the system.

In the market Wizards interview you said that 'Watching the market during the day is like playing the slot machine, you end up feeding it all day'.

My friends have suggested that I just hire someone (student etc) to sit in my office and monitor the connectivity and trading platform.

However I know of people who are system traders, who sit in front of the market all day, watch it tick by tick, but have no 'urge' to tinker with their system.

Would you have any comments? After feeling the feelings are their also behavioral changes needed like not watching the market during the day etc.

All the best

You might notice the feelings you have at the tinker point and take them, as entries, into TTP.

 

 

 

Tinker Bell

 

for some, is the gong that sounds

to announce the start of trading.

 

Clip: http://www.theartofcomics.com/

renaud/images/Tinker%20Bell%20Web.jpg

 

Tue, 25 May 2004

 

Good News & Bad News


Hi Ed !

The good news is my account equity is almost full of stocks making new highs, 15 in number.

The bad news is my watch list for tomorrow has 56 more stocks all near new highs.

Crunch time. Which to hold, which to fold ?

Nice problem to have: too many stocks making money.

Yes, our problems tend to account for most of our income.

Tue, 25 May 2004

 

Emotional Diary

A popular market wizard recommends keeping an emotional diary. In this diary,
you would make note of when you feel anxious or emotional, detailing the
time, nature of the emotion, thoughts (self-talk), interpretation of the
self-talk, situation, and whether these feelings are new or recurring.

 

Later you would record your behavior at the time, whether you expressed your feelings or not, and how long the feelings lasted and what made them go away.

 

My question to you Ed is do you find this exercise consistent with the goals of the TT? If not, do you find any portions of this exercise useful? Would you modify this exercise in any way to make it more consistent with the TTP. The wizard hopes this exercise would become a life-long ritual for the reader as it would give great insight into themselves.

Thanks for your time,

Thinking about your feelings and writing them down might help you to identify them. 

 

 

Writing about Emotions

 

may be a step toward

experiencing them

 

Clip: http://www.couplandesque.net/

culture/photography/writing.gif

Tue, 25 May 2004

 

ALL-Time Highs

 

Ed,

I am keeping in mind the Chart page located on The Tribe website and bought
these stocks at or approaching all time highs:

CCJ
CUNO
FRO
HOC
LAYN
SJH
TSO

FAQ offers no instrument-specific trading advice. See Ground Rules.

Tue, 25 May 2004


A Perfect Symbiosis:


Trend following and living like Pooh, the bear.


Have you read the marvelous book by Benjamin Hoff, The Tao of Pooh?


Yours sincerely,

TTP seems compatible with many schools of thought.

Mon, 24 May 2004


Causality and Responsibility.

If causality is a convenient conceptual illusion, ... then how is do I accept responsibility?

Wouldn't accepting responsibility hold me as the causal factor? And if causality is a conceptual illusion wouldn't that say it was not all my fault?

I do not ask these questions with any personal issues in mind. I find great implications in addressing these deeply philosophical questions.

Causality and Responsibility are notions; they have no existence, other than to organize perception. 

 

You can't buy a causality or a responsibility at Wal-Mart.

 

The causal model has very narrow application.

 

You can use causality to analyze what happens when the cue ball strikes the ten - you can't use it to analyze how the pool table, the balls, and the player all come to appear at the same place and time. 

 

The responsibility model, in which you intend a result and assume responsibility seems to provide a better fit for real-life situations.

 

 

The cue ball

may cause the ten to move.

 

The player

is responsible for the result.

 

Clip: http://www.cronullabeachyha.com/

budget-accomodation/

images/yha-pool-table.jpg

Sun, 23 May 2004

 

Letter Requesting Re-Admission

To The Incline Village Tribe


To The Tribe,

This is a letter requesting re-admission to The Tribe. Writing this letter forces me to face some black holes in my trading arena. These weaknesses are not only sabotaging my trading, but are also wreaking havoc on my personal life.

In the last month my life has emotionally spun out of control, culminating with me missing a Tribe meeting. The same feelings I have been avoiding in the trading arena have begun to effect my entire life. The core feeling is fear. Fear of learning to do the things that successful trend followers do. It is not a fear of commitment. It is not a fear of sticking or not sticking to my system. It is a fear of admitting to myself that I have no system to stick to. I like to call myself a systems trader, but that is dishonest. I follow my entries and stop-loss orders (2%). The anxiety begins when Iím up money. I take profits arbitrarily. I take profits when the money is burning a hole in my pocket. My lack of a defined exit strategy is wreaking havoc on my trading. I feel deep anxiety because I know in my heart that I am powerless to control myself from ending winning trades too early.

This letter of requesting re-admission to The Tribe is forcing me to ask What is really going on? Am I lazy for not just doing the research, finding an exit strategy that I like, and testing it out? Maybe. ďIt never was my thinking that made the big money for me. It was always my sitting.Ē (Reminiscences Of A Stock Operator p. 68). This quote resonates deeply with me because I have never, ever ridden a trend. Iíve never held onto a winner for more than a month. I donít know what it even feels like. Even the thought holding onto a trade for months on end makes my stomach constrict. It requires patience. Itís a black hole of confusion; itís undefined, and Iím not comfortable with uncertainty. Entering a trade, making some money, adding to the position, making some more money, ending the trade, that is my modus operandi. Then, for the next week, month, year, I watch the trade that I prematurely ended, get the calculator out, figure out how much I would have made on that trade. The cycle repeats itself.

Perfection. I want perfection. I want definition. I donít have it now, the way I currently trade is not bringing me closer to perfection. When I was a child I colored in coloring books. I loved it; it was my passion. Yet, when I drew outside the lines, I immediately ripped that page out of the book and threw it in the trash. It was immediately imperfect. No discussion. When I end a winning trade I feel perfect at that second. Itís a feeling of purity, a feeling of bringing me closer to my dreams. Then, for the next week, month, year every time I pull up a chart of that trade I feel imperfect because, once again, I was powerless over my emotions. I now know that discipline in trading is a lot more than cutting losers. It is letting winners run. ďMen who can both be right and sit tight are uncommon.Ē (Reminiscences Of A Stock Operator p. 69).

I feel embarrassed to ask other traders about exit strategies because it highlights my incompleteness. I feel others have power over their weaknesses, and I do not. The fear of facing these questions (even just thinking about confronting myself with these questions) makes my stomach constrict. Is this Fred in my trading? Overcoming this weakness will transform my trading. After writing this, and re-reading it, it is painfully obvious that the fear of holding onto winners is preventing me from becoming a more profitable trader, and I am afraid to become that person. It makes my heart quiver. It makes me feel like I will become someone else. I will have to give up being me, and become a new person; I donít know if I am ready to give up being me, it makes me sad. Perhaps I secretly entertain this drama? Perhaps I secretly love to entertain this drama! Aha.

I have two choices: 1) embrace my dramas through the help of The Tribe and face my discipline issues head on. This requires learning and implementing a system that will prevent me from ending trades prematurely, or 2) remain an incomplete trader by inviting the same dramas to manifest themselves - thus not becoming the trader I want to become, not attend Tribe meetings, and continue to permit these dramas to wreak havoc on my life in general.

You might have some ripe entry points.  (Re-) Admission requirements include consistent attendance and full participation. 

 

 

 

 

In Coloring Outside the Lines, author Roger Schank asserts that raising smarter kids isn't about forcing information on them when they aren't ready or interested.

 

Maintaining that school is generally not the best place for active learning, Schank says parents can counteract any potential harm by emphasizing positive experiences.

 

Clip: www.amazon.com

Sun, 23 May 2004

 

Investment Psychology Explained

Ed,

BTW, I just took my CMT Level II exam yesterday. One of the required reading
assignment is Martin Pring's "Investment Psychology Explained." There is a chapter titled "What makes a great trader or investor?", and you are one of five people he mentions. At one point in the book he puts you and short-term trend follower in the same sentence, which I find odd. Also, the book says, "He (ie. Ed Seykota) uses the systems to filter out buy and sell signals, then uses his own judgment to decide how he should act on those signals. This in a nutshell is his philosophy." (Sounds very much like Fred's playground then if one keeps second-guessing and judging trade signals)

Anyway, I just find it interesting because he is describing you who is different from what I know from your FAQ or from meeting with you. While I can't say who is the "real" you, I just find it funny how everyone has a different view of you and what you said. And if you were ever to take a test where you yourself (and what you said) is part of the test, I find it funny to think that you may have a different answer than the model test answer, even though I can't imagine anyone knowing your own trading philosophy better than yourself.

You might have some feelings about wanting to know who people really are - perhaps even yourself.

 

 

Yesterday, upon the stair.

I saw a man who wasn't there.

He wasn't there again today.

Gee, I wish he'd go away.

 

Clip: http://kreative1.homestead.com/

friends.html

Sat, 22 May 2004

 

The Hard Ball Process and Shyness #2

See below


Pollinator comment: Oh, in the hardball process, when one couldnít verbalize it, they were encouraged to get into the physical feeling as their answer.


I hadn't read that when I sent you the message below. It's interesting how question and answer seem to happen at the same time of now.

See Below.

Fri, 21 May 2004

 

Primate Poker


Chief, you'll like this web site:


Apes from Des Moines are playing no-limit poker online.

www.PrimatePoker.com

"Most people bring their psychological baggage to the poker table. That
baggage plays out as drama. Apes don't have baggage. They live in the
moment. They just execute."

I see your coconut and raise you five bananas.

 

 

Only the Most Intelligent Species

(lower right)

 

have the desire and ability

to jump their systems

 

http://www.caterina.net/

archive/img/thumbs/apes.gif

Fri, 21 May 2004


Chinese Version of TTP


Dear Ed,

Per our discussions, this week my wife went through each character of the TTP document linked to the Taipei Tribe website ... I am very pleased to advise you, that this is translated absolutely flawlessly. (It will introduce the TTP process to both the local and overseas Chinese world in a quite clear and concise way in the future.)

The Tribe leader should be highly commended on this work and his excellent understanding of the process as well.

Best regards,

P.S. This helped my wife to better comprehend TTP also.

OK.

Fri, 21 May 2004


The Hard Ball Process and Shyness

Hi Ed!

I have a question about the Hardball Process. I have opposite feelings about it. On the one hand, I witness that some of the proclamations I made in my family tribe meeting on December 31st have come true. Nevertheless, on the other hand, I am the kind of person who likes to keep one's objectives and goals hidden or secret, and I fear that they are threatened if and when I make them public, such as proclaiming them aloud.

You can conduct the hardball process with a proxy name for your goal, like "The Goal."  Then your receiver can prompt, "What's standing between you and The Goal."

 

You can also eliminate story from your responses, and express mostly somatically. This tends to accelerate the process and also preserve your confidentiality.

 

 

You can maintain your confidentiality

 

by expressing somatically

 

Clip: http://journalscape.com/

doug/2003-09-30-13:18