© Ed Seykota, 2003 - 2005 ... Write for permission to reprint.

Ed Seykota's

Frequently Asked Questions

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TTP - The Trading Tribe Process  ...  Glossary

  TTP Workshop  ...  Resources

 

February 11 - 20

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Questions

(Quotes from Ed in Red)

Answers

Sun, 20 Feb 2005

 

No respect

Thanks Ed!

Good to read your response to my request for help, on your website, despite me asking you not to publish it.

 

You obviously have no respect for me and what I am trying to achieve (based on merit), so why don’t you go the whole hog and publish the screen dump? After all, you are the guy who encouraged me to travel to Incline Village, only to tell me that you wanted $1000k per hour to talk to me, so you obviously believe I am some kind of idiot.

It’s funny, I was listening to Oscar nominations the other day and one actor (I don’t know his name), nominated for the best supporting actor award, was saying that his performance was all down to the lead actor Tom Cruise. He said that Cruise had been instrumental in allowing him to take his part to the next level. He said that Cruise had helped him, in the same way that Hoffman had done for him (Cruise) and that Brando had done for Hoffman. These great and accomplished actors were involved in creating a virtuous circle of greatness and talent. And I suppose the moral of the story, is that great people make you feel great and the rest are not worth bothering about.

Bye, bye Ed. I will never again denigrate myself by emailing you or reading your website.

Best,

FAQ Questions and Answers

become the sole property of Ed Seykota. See Ground Rules.

 

You might take your issues about wanting respect and feeling denigration to your Tribe as entry points.

 

Until you resolve these k-nots you are likely to continue entraining drama that delivers these feelings as your payoff.

 

 

 

People who are Unwilling

to experience shame

 

sometimes set up dramas

in which they get

no respect.

 

 

Clip: http://photos1.blogger.com/img/

217/1450/640/respect.jpg

Sat, 19 Feb 2005

 

Latest System Results

Dear Ed,


Please find enclosed the results of my latest system. So far, this system has proved to be unbreakable. From the results, you will see that the system does not try to predict trend direction.

I continue to email you and others because I am looking for opportunity. I have spent 4 years of self-funded research, into the design and development, of a trend following trading system that is without reproach.

 

I now believe that I have such a system. I am keen to stabilize my life, primarily by settling down in one place. For that I need to sell the only thing I have … this system. If you can point me in the right direction, then I would be very grateful.

 

I have no funds of my own and no access to funds. My background is not one, where I have easy access to funds. My parents are blue collar and I left school at 16 with no qualifications.

 

Everything I have done to date ... has been achieved through massive effort and merit. I just need a little bit of help to get up to the next level.

None of the properties you cite as "reasons" indicate a profitable system or an ability to stick to it.

 

does not try to predict a trend

self-funding

I now believe

stabilize my life,

selling the only thing I have

leaving school

 

You might consider taking your feelings about "needing a little help" to a Tribe meeting as an entry point.

 

Perhaps you can shift your focus from creating drama to creating right livelihood.

 

 

If you want help

press [F1]

 

If you want to manage money,

show you have a profitable system

and the ability to stick to it.

 

 

Clip: http://www.cs.niu.edu/~mcintire/

amusements/help.jpg

 

 

 

Fri, 18 Feb 2005

 

Is Position Size relationship

to Risk & Reward fixed?

Hello,


I strongly believe in risk management and I am always crunching charts trying to come up with a suitable stop loss but in nearly total failure.

 

I have come across your calculation to determine the optimum risk & reward via your resources page.

Could you please answer my question? because i couldn’t find anyone else to translate them into risk management in trading.

Q: If for example I buy/sell 1 contract of EUR/USD which is worth $1000; would the optimum stop-loss be -250 USD which is (25%)?

I know I am missing the point and this is not be true because I wouldn’t be able to escape 25pip drop and I will end up losing, so what is the point in real trading?

The following is an example of how I use risk management (See chart explanation below):

 



Buying-point 1 (Pivot) (GBP/USD 300pip > Low)
- Buy 1 lot
- Stop loss 150pip below

Buying-point 2 (GBP/USD 300pip > Buying-point1)
- Buy 1 lot
- Stop loss 150pip below

Buying-point 3 (GBP/USD 300pip > Buying-point2)
- Buy 1 lot
- Stop loss 150pip below

Buying-point 4 (GBP/USD 300pip > Buying-point3)
- Buy 1 lot
- Stop loss 150pip below

Rules:

- I will always buy at 300pip fixed intervals from the first Low pivot.

- I adjust my intervals if the price drops below Pivot so I can buy at the next better price.

- If a Buying-point makes 150pip profit I will change my stop-loss to the starting point which will save the position with 0 loss but then I will buy 150pip above my original Buy-point.

- I treat every position as a separate case.

- I always buy within fixed intervals and minimize the losses within the space of the interval.

If: Total profits (1200pip trend) = $3000

Then: Total risk available until I capture 1200pip trend = 3000/150 = 20 stop-losses

Note: I sell as often as I buy which divides the losses into 10 each between the buyers and sellers for me to break-even.


Am I right? I think this leads to total loss. I find fewer resources on how to apply risk management for small time turtle trader like my self.

Thanks for your time, I admire your factual numeric approach to risk management.


Thank you,

Per the example in the Risk Management article (see Resources, above), the mathematical optimal for a trade with a 2:1 payoff and 50:50 chance is 25%.

 

The drawdown profile of such a system might exceed most trader's personal risk tolerance by a wide margin.

 

In such case, the trader might abandon the system during drawdowns and not be around for subsequent winning streaks.

 

---

 

FAQ does not recommend specific trading parameters.  See Ground Rules.

 

You might try coding your system and back-testing it to determine an "optimal" stop placement

method.

 

The chart you provide reminds me of a subway line, on which the cars move relatively smoothly, always in the same direction. 

 

As such, subway rides might make excellent trades - if only you could find someone to take the other side.

 

Trading during limit down markets and riding subways have something else in common. You might not be able to get out when you get to your stop - at least for a while.

 

 

 

Greater Boston Subway System

 

Charlie and the MTA

 

Charlie Handed in His Dime

at the Kendall Square Station

 

and he changed for Jamaica Plain.

 

When he got there

the conductor told him,

"one more nickel"

 

Charlie Couldn't get off of that train.

 

 

Notes:

 

1. The Forest Hills stop gets you close to Jamaica Plain.

 

2. Charlie does eventually get off the train.  In the mid 1980's, the fare for senior citizens drops to 10 cents. Charlie has a wife and family, so we can assume that he is at least 21 when he first gets on the train in 1939. By 1983, he is 65 years old, and qualifies for a senior citizen fare of ten cents, for which he has a 44-year old receipt from Kendall.

 

Clip: http://osamuabe.ld.infoseek.co.jp/

subway/mappage/boston.gif

 

Fri, 18 Feb 2005

 

Trend Identification


Dear Ed:

Besides the obvious of price determining trend formations. What key factors would one look for in order to reinforce the belief that a trend is in fact developing?

Thank you in advance

Your focus on "trend formation" and "trend developing" indicates a desire to anticipate trends

 

Such attempts to "pick the bottom" are things fundamentalists attempt.

 

Trend Followers simply wait for trends to appear.

 

 

 

Bottoms

 

may be easier to spot at the beach

than at the market.

 

Clip: http://www.newmovement.cc/

images/Fun%20photos/bottoms.jpg

Fri, 18 Feb 2005

 

Trading Tribe


I have recently re-read much of the materials of the Trading Tribe site and have become fascinated and moved.

 

My original interest was simply Ed's reputation and a search for trading answers. The site did not seem to provide them. I have been trading for my own account since 1992 but have only traded futures for about 20 months - a long term trend following system via a systems assist broker. I continue to pursue research both into trading systems and into hedge funds in general.

My quest is not just for "right livelihood" but for "right living". I have been deeply attracted by studies of Buddhist philosophy over the past couple of years and have for many years derived a profound sense of the transcendent from meditation and religious ritual.

 

My recent studies of comparative religion have included brief forays into Judaism, Sufism (and of course Islam). I am not a believer in doctrine or dogma. I am not conventionally "religious". I am a believer in the simple practice of right livelihood and right living.

Which takes me in a full circle. Ed's work with the Trading Tribe would appear to me to be a rather nobler and wider pursuit than success in trading.

 

I am moved by the end of year testimonials where I find that contributing members have learned to value their families, to honor life, to live in the now. I would be fascinated to know more of the man (never mind the trader).

FAQ does not reveal personal information - see Ground Rules.

Thu, 17 Feb 2005

 

Seykota Workshops

re: Sat, 29 Jan 2005


Ed says :


"I am planning to announce a Workshop schedule, a Workshop Trainer Certification Program, a Trader Certification Program and a Book, all in March."

I have two questions:


1. Is "I am planning" the same as "I now commit to"?

 

2. Is "March" in the irretrievable (2004) past, or is it in the unforeseeable (2005/6/7/?) future?

I read a great insight on the use of "SVO-p" writing someplace [on your site] ...


Anyways, it was Really, Really excellent. Helped put _me_ in perspective. You might stumble across it someday. It _is_ worth reading.

LOL :) You have an Excellent site, sir.

All humor aside, Thank You for being there.

The acts of planning, committing and announcing all occur in the moment of now.

 

I am continuing to hold March as the completion date while this unending moment of now continues to evolve.

 

 

 

Thoughts about the past, future

 and yes, even the now

 

all occur in the now.

 

 

Clip: http://www.toothpastefordinner.com/

012404/home-by-now.gif

Thu, 17 Feb 2005

 

Testimonial for Book

My edge: TTP

Since running into TTP, my life is where I want it now. I am a TTP practitioner for almost two years and I am saying that it is the best technology I ever came upon in my life (business, trading, and personal relationships).

It comes to a point that when others ask me what our edge is in our systematic trading: I claim that it is holistically TTP along with the cheerleaders in my Intentional Community and the whole Under-Fred-Network, the Trading Tribe.

What TTP does for me is clarify my intentions by dissolving my knots and then my supporting casts (a.k.a cheerleaders) encourages me in committing to my intentions all the way.

 

Clarity fosters creativity and commitment fosters results. While I am exploring TTP I had reservations about the power of TTP but then I took that issue into the hot seat as an entry point. I recall the hot seat experience and I remember that there is lots of analysis in the early stages of the session, all of which my cheerleaders are encouraging me to do more of it.

 

So I analyze some more that TTP is this and that, its pros and cons, how it is like this approach, et al. After a few round robins of this analysis, that’s when the whole thing fell apart.

 

Silence followed with nothingness. Nothing feels good, no story telling feels good, no excuses feels good, no analysis feels good. That’s when I had an AHA about TTP which is when I realize that Intentions=Results. TTP becomes another passing aha.

Ed, I never tire of thanking you, and if you like you may include my 2004 review(#16) as part of my testimonial or whatever else you may need.

 

Yes.

Thu, 17 Feb 2005

 

Pollination



Hi Ed,

Currently, my tribe consists of only two members, and our meetings are irregular since neither of us have experienced the process / been on a hot seat. I am in touch with another tribe [that has] a workshop attendee.

 

I am going to visit in the next few weeks to attend one of their sessions, in order to experience TTP. This will help me get things on a firmer footing here.

Best regards,

Yes.

 

TTP seem to pass best by direct contact with a good practitioner.

 

TTP is like riding a bicycle; even Einstein might have trouble getting the hang of it without someone showing him how to do it.

 

Visiting an existing Tribe is an excellent way to learn TTP.

 

I plan to have some additional training materials in place by the end of March.

 

 

 

Einstein

 

 

Clip: http://www.th.physik.uni-frankfurt.de/

~jr/gif/phys/einst_b.jpg

Wed, 16 Feb 2005

 

Next Workshop

Hi Ed,

The November 2004 Workshop at Reno was a fabulous experience for me. Back in
India, I have tried to "apply" some of what I learned during the Workshop to my day-to-day life (personal and professional).

The Mumbai Tribe is now operational, and has met 3 times since inception. I am very encouraged by our progress thus far.

Since returning, I have also fine-tuned my trading system to plug 2 loopholes that I had knowingly permitted to remain in the system. I had justified allowing those loopholes to remain, because "it would take too much effort to plug them, and the kind of setup they handle doesn't show up in the market too often, anyway". (I often remind myself of one of your lines: Ambiguity in a trading system is Fred's playground. So true!)

As it happened, one of those setups showed up immediately upon my return to India. If my system was geared to handle it, that trade would have added more than 20% to my trading capital. I have now plugged both those loopholes, and am very satisfied with the system as it stands presently. I now intend to follow it in its present form, and benchmark my performance against my system.

More important - since returning from Reno, I have taken every Buy / Sell / Stay Away signal thrown up by the system, without any hesitation. (You may recall, at the Workshop, that I had listed "Not following my system" as the most important issue I wished to overcome.)

 

In this context, I also want to let you know that I am very inspired by your reply in one of your early FAQ's: "Note that if you maintain the vision, the vision maintains you, especially during key events like run-ups and draw-downs." I don't think I understood the meaning of that statement earlier. Now I do.

Ed, I am eager to follow up on the Reno Workshop, and am inclined to attend
your next Workshop (if there is a next Workshop). Do you plan to announce
another Workshop sometime soon? If yes, I will very likely attend.

Thanks, again, for your generosity.

See Workshop Page for details.

Wed, 16 Feb 2005

 

Getting to the Heart of the Matter

Tribe Meeting - Feb 2, 2005.


Hi Ed,

I trust you are well.

I write to report on the proceedings of [our] Tribe's 3rd meeting - held on Wednesday, February 2 2005.

All 3 members are present. We start with the customary check-in. During check-in, a member (who was in the Hot Seat at the previous meeting) describes his experiences during the 2 weeks following his Hot Seat experience.

He reports that in the days following his January 19 Hot Seat experience he is much more sensitive to his own and other people's feelings than he normally is. He feels far more "emotional" than is normal for him. During those 2 weeks, he is also very comfortable "going with the trend", and is disciplined in following his system. No overriding his system, no "rogue" trades. He feels he has been much more "in the zone" - in his trading and otherwise.

After check-in, I report to the Tribe that I forgot to take the Tribe through the check-out process after the last meeting. I acknowledge that, having been caught up in the excitement of how well the previous meeting went, I forgot about the check-out. I apologize for having forgotten. We spend the next 20-odd minutes discussing the markets, and our recent trading
experiences.

This is our 3rd meeting, and I believe we all now "understand" TTP sufficiently at a cognitive level to get on with "experiencing" it. So - unlike in the previous 2 meetings - there are no prepared summaries or discussions of "TTP theory" this time. I have decided that we shall get straight down to a Hot Seat session.

[Name] wishes to be on the Hot Seat this time. He has 2 issues he wants to take to the Hot Seat. He describes them to us, and then suggests he would like to go with the second one.

His issue: He has experienced 2 significant life-threatening episodes concerning his heart. One is a heart attack some years ago, and the second is an angioplasty to implant a stint in one of his blocked blood vessels. (He is still in his 40s, and looks and feels physically very fit.) A consequence of these episodes is that he lives in a constant state of fear regarding his health. At social gatherings, for example, he often catches himself checking his pulse at regular intervals, out of fear that he may be stretching his body beyond its limits.

He wishes to take this issue of constant fear regarding his health to the Hot Seat.

We start, by asking [him] to describe his feeling to us. He takes us through a lot of narrative about what he is afraid of, how his fear manifests itself, that he exercises regularly, that he believes sometimes he maybe overdoing the exercise, etc, etc.

Every time we ask him to describe one of his "feelings", he goes into another round of narrative. So we encourage the narrative - the analytical, logical description of his feelings.

 

This goes on for over 10 minutes. He knows what we are getting at, so he continues with the analytical narrative. This goes on for many more minutes.

 

At some point during his narrative, he says he is finding it difficult to feel the feeling of fear he has been describing. So we ask him to describe the feeling of "finding it difficult" to feel the feeling of fear. That is the opening we are looking for - he begins to describe a feeling of "tightness in my jaw". We ask him to feel that feeling of tightness, and to describe it to us. He does so, and then slowly moves to a feeling of pain in his neck, chest and back. He describes all those physical feelings, and says that the pain in his neck is getting more and more intense.

He has now thrown his head back in his chair, and is feeling the pain in his neck and shoulders. There is an intense pain at the base of his neck. Soon, tears are forming in his eyes, and before long, streaming down his cheeks. He is very much into the feeling, and feeling it intensely.

We push him to intensify the feeling of pain at the base of his neck. He does so. It gets more painful. He tells us he can feel something very hard at the base of his neck. He occasionally rubs his face in his hands. We encourage him to do more of that, too. He twists his head from side to side. We encourage that, too.

This goes on for at least 20 more minutes. Then slowly, the pain eases, the tears stop, and he slips into a state of calm. He appears relaxed in his chair. We ask him how he feels. He says the pain is gone. There is silence in the room for a while. Then a few minutes later, we ask him again how he feels, and he says the pain in the neck and shoulders is coming back. Again, we encourage him to feel the pain. And then the whole process begins again ...

We ask him to describe the pain at the base of his neck. He says it feels like something really hard, like a rock at the base of his neck. He feels it, rubs it, and then says it feels like a hard ball. Like a f-ing cricket ball, he says. We encourage him to feel the ball. And to feel the pain. He is feeling it ... very intensely. Soon, the tears start again, and he is feeling the pain worse than before. He rocks his neck gently ... left of the ball ... right of the ball ... over the ball ... left of the ball ....... (his own words during the experience). We encourage that, too.

After some more time of this, he gets up from the chair, stands up, and lies down full stretch on the floor of the room. All this while he continues to feel the painful hard ball at the base of his neck.

After a while, he gets up from the floor, sits on the chair again, and continues to feel the pain in his neck and shoulders. We take him through his various forms repeatedly. This goes on for many minutes more, till the ball no longer feels like a ball - it is now a bone in the base of his neck. And the pain has subsided.

In the next few minutes, he has reached a state of calm, and is looking very relaxed. He tells us the pain has gone, and he is feeling relaxed and light. The entire Process has lasted more than one and a half hours.

We don't question him, or ask him to describe the way he is feeling any more. We give him some time to sit by himself. A few minutes later, we ask him again how he feels. He is still calm. Still relaxed. No more pain in the neck, or shoulders, or back. No more tightness in the jaw.

The Hot Seat Session has come to an end. For us, it has been a very intense, engrossing session too - as Receivers.



---



During the previous meeting, I had proposed that we also spend some time at our Tribe meetings discussing our respective trading systems (entirely voluntary - no compulsion if any member did not want to discuss his own system). Everyone had liked the idea. So we spend the rest of the evening - about an hour and a half more - sipping tea and coffee, and discussing and analyzing my trading system. [My colleagues] offer valuable suggestions.

The meeting comes to an end at around 10pm. I am really excited about how well this meeting too has gone. Once again I forget the check-out.! This is becoming a habit!

Thanks again, Ed, for giving me so much.
My best regards to you and your family.

You demonstrate considerable mastery of tracking the sender and formalizing resistance.

 

If the sender's forms reappear in subsequent sessions, you might try the integration process, in which you encourage the sender to integrate all his forms into one form, while he feels (and enjoys) all his feelings, simultaneously in the moment of now.

 

At the Incline Village Tribe, we have TT University from 1:00 PM to 6:00 PM.  We then break for dinner and have a TTP session from 7:00 PM to whenever.

 

 

Hearts Grow Strong

 

when conditions are right.

 

Clip: http://gnuhaus.com/iblog/

photofriday/cactus.html

 

 

 

 

Tue, 15 Feb 2005

 

Testimonial for Book

The benefits I am receiving from the Trading Tribe are astounding.

I have been trading for 19 years and was heading down a dangerous road. My life was about to be wasted sitting in front of a computer screen or in some office cubicle for 8 to 10 hours a day! Now, I spend time with my six month old boy, with my wife or doing something else I enjoy. I am not a zombie or a robot, I am living! My portfolio does not control me anymore. I just keep my risk in check.

The Tribe is teaching me a new trading lesson in "Risk Management". The big change is not in the simple trading principles that I already know however. Major change is occurring in the way I think. My brain is clear again and my body feels healthier and I have less stress.

Being in the Tribe is not all smooth sailing. I have very hard days still. For some reason these hard days are easier to handle now. Many challenges have also come before me and I am meeting them with my new TTP tools.

With all of these benefits I feel I have only scratched the surface of learning from Ed Seykota. Maybe he has taught me 2 or 3% of what I need to know. He is patient and forgiving and that is the kind of teacher I need. The first step is to just receive some help from The Trading Tribe and your new journey is beginning.

Ed Seykota is the living Dale Carnegie of our day but few know it yet. His ideas are way ahead of our time but are destined to be accepted by those who wish to experience life to its fullest. He and his top Tribesmen are going to make a lasting change in this World with TTP.

Oh, one more thing. My [baby] boy wanted to say (Type something):

" m hn ujju9opv hcd6vf 6p; .-0; mnjk l lnb 7"

Sincerely,

" m hn ujju9opv

hcd6vf 6p; .-0;

mnjk l lnb 7"

 

is a new one on me.  Please thank your son for the suggestion.

 

 

 

Kids Grow Up Fast

 

enjoy them now.

 

Clip: http://www.jurawelt.com/images/

picsbig/child_business_person_gross.gif

 

Tue, 15 Feb 2005

 

Testimonial for Book

Ed,

Thank you for introducing me to the Trading Tribe and the process. I now have a framework through which I can clearly reconcile my feelings, my priorities, my successes and my failures. I follow the trend.

All the Best,

OK.

Tue, 15 Feb 2005

 

Testimonial for Book

Dear Ed,

I have been attending TT meetings for just over a year and would like to share my experience.


Before TTP my trading had been very volatile with big swings. My decision making for taking a trade was based on looking at charts extensively and then just doing whatever I felt like. I was a typical day trader in and out the market for many small profits and a frequent big losses.

 

My results were consistent, i.e. a good trading period followed by a massive blowout where I would trade/gamble like a madman. It actually felt like someone else was doing the trading and I was just watching unable to stop this behaviour. I tried many techniques and methods to "fix" this behaviour with little success.


I am happy to report that the last time this happened was a year ago, during a TT meeting I was fortunate enough to have a very skilled receiver and tribe who helped me immensely.

 

At present my trading is 100% mechanical, I have spent the last year developing my own indicators which I can follow and have back-tested this system. I now know what my systems expectancy is, how frequently it trades and the ratio of winners to losers.


Looking back at my real time trades I get a lot of pleasure seeing how disciplined I have been with taking all the signals and at the correlation with my back-testing. This massive shift in trading methodology is the result of TTP, for me it really has worked wonders.

 

TTP is not easy to do I regularly dread going to meetings knowing that I must be fully committed in "bearing my soul" to the tribe, it would be much easier to stay at home and keep the feelings well hidden. However I have made a conscious choice to fully experience my feelings within the tribe rather than the market, its much more fun, leads to insights and much much cheaper!


I know that I must always carry on this path if I am to achieve my goals. My sincerest thanks to my tribe and to the person who has made all of this possible with his genius and generosity, Ed Seykota.

OK.

 

 

 

Day Trading

 

an exercise in limiting profits

while continuing to pay

normal transaction costs.

 

Day trading may provide a way to cover up deep feelings that the trader does not wish to face.  TTP, by helping the trader convert his feelings from adversaries to allies, removes the motivation to day trade.

 

Clip: http://money.cnn.com/1999/09/01/

investing/daytrade_dayinlife/sierra2.jpg

 

Wed, 16 Feb 2005

 

Congratulations /

plus my testimonial for your book.


Hi Easy Ed,

Congratulations on getting your new book on TTP ready. I am sure this must have been an enormous amount of work and is probably the _ _ _ th draft.

You have taught me; that we can learn to do things, which we never thought ourselves capable of before by focusing clearly and staying on our task in the present moment. Thank you very much.

My involvement in your state-of-the-art “TTP” process, has also helped me deal with (dissolve) many problems in both life itself and trading, during my slow but steady progression to each higher level of consciousness.

Thanks again for enhancing my trading, and me to ...

Cheers,

OK.

Tue, 15 Feb 2005

 

Certification

Hello Ed,

I read on your site that you were considering certifying trading systems. I have a system that I would like to sell on Ebay, in an attempt to let the market, tell me, what a market trading system is worth. I would like to have the system certified by a trader of note, such as your good self.

 

I have no money to pay for certification. Therefore, the most obvious form of payment would be commission based, linked to the nett realised, sale price of the system. Would this be of interest to you?

I enclose the theoretical trading results for the last version of the system. It is important to note, that the systems returns cannot be guaranteed. However, on balance, the system shows positive expectation and will prevent total loss of starting equity.

Certification involves demonstration of two critical factors: (1) a winning system and (2) the ability to follow it.

 

Selling a "black box" system to someone over the Net, without verifying his ability to withstand equity swings does not comply with certification requirements.

 

 

 

Selling Black Box Systems on eBay

 

might provide a basis to certify

both the buyer and the seller.

 

 

Clip: http://www.etecenter.com/

graphics/certifiable.gif

Date: Mon, 14 Feb 2005

 

Boise Tribe


Dear Ed,

I would like to start a Trading Tribe group in Boise ID. Just read about this in the book "Trend Following" and read about you several years ago in "Market Wizards". Thank you very much for doing this!

 

 

Welcome

 

Boise, Idaho !

 

 

 

Boise

 

Boise, the State Capital, lies on the Boise River in the southwestern part of the state.

French-Canadian trappers, grateful to reach a forest again, after trudging across the territory's treeless plain, name the area Boise, meaning "wooded."

 

Clip: http://www.ohwy.com/id/b/boise.htm

Mon, 14 Feb 2005

 

Book Review


Dear Ed,

I joined [our] TT over 18 months ago, today we host our tri weekly meetings at my place ... we all share a similar feeling that our tribe is a unique place where we enjoy giving (receiving) and taking (sending) from each other.


On a personal level, I always felt that my trading (over 5 years) lacks the psychological element to formulate a successful trading plan, so as I came across your site it was an immediate aha, this is what I am missing.

You, through TTP have helped me on two main levels:

My personal relationships with everyone around me have transformed to something more clear, open and sincere, spending time and thoughts about people I really want to.

On a professional level, I have mustered the guts to establish my own investment management company last year. My trading enjoys the clarity and awareness previously lacked.

Your personal commitment to TTP has resulted in a proliferation of people around the globe who dare to face their inner issues aiming to improve their lives in a similar way that I have experienced. I thank you for your kindness.

You are always welcome when visiting in [City]. Can’t wait to read your book!


I trust your discretion keeping my comments anonymous.

OK.

 

Sending and receiving both include giving and taking.

 

 

 

Communication is a Gift

 

for the sender

and for the receiver

 

 

Clip: http://www.ccfc.ca/English/

images/graphics/Gift.gif

 

 

Mon, 14 Feb 2005

 

Self-Control & Self-Discipline
Re: Self-Control & Self-Discipline


Ed says: "I wonder how the good professor intends to implement more self-control and self-discipline. Methods for controlling children flow in and out of fashion. Methods for empowering children pretty much stay the same."


My point exactly! While Professor Baumeister finds the current self-esteem strategies lacking, he doesn't say which of the available self-control and self-discipline approaches his reader might apply.

 

An application of "intentions=results" to this question brings this into sharp focus.

Thanks for thinking this work through to results and sharing with us.

Discipline can mean a course of study, a consistent approach or punishment.

 

It might be wise to agree on the meaning of discipline before signing up as a disciple.

 

 

Teaching Methods

 

vary widely

from culture to culture.

 

 

Clip: http://www.catb.org/~esr/writings/

taoup/html/graphics/disciple.png

Mon, 14 Feb 2005

 

Testimonial for Book

These are some of the benefits I've enjoyed from participating in TTP:

I feel happier and less anxious.

I interact more easily with people.

I "see it" when others try to engage me in their dramas, and I find that now I lose less time and energy playing other people's games. I also seem to be creating fewer dramas of my own.

The more issues I work through, the more I find myself acting in my best interests, automatically, without having to remember "what I should do".

 

It's like I just know what to do in various situations, and I do it. And when I don't know what to do, I feel like that's OK too. So I feel less held in place by fear and freer to move forward, and the upshot is that as I move forward, I feel even better about myself and what I'm doing with my life.


Thank you, Ed, for developing something so effective and for sharing it freely.

OK

Sun, 13 Feb 2005

 

Equity Curve II

Dear Mr. Seykota

Thank you for your reply to my question of 1/30 about the equity curve. I infer from your response that if I can formulate set rules for 'adding on the dips' - and if such rules work in rigorous testing - that it might have validity. Point taken.


One part of your answer puzzles me however. The three traders I quoted as favoring adding on equity dips ...
each has mentored traders and/or written about trend following, surely they have earned their stripes in the markets - I don't think you could brand them with the cliche that 'those who can do, do, while those who can't do, teach.'

Thank you for the catch - the item now stands without the cliché.

Mon, 7 Feb 2005

 

Commitment

Hi Ed !

I follow my risk management parameters which are 20% of total equity maximum on one idea, 40% maximum in the same group, and 2% of total equity maximum risk per trade. I feel comfortable with that.

You might back test your system parameters to find out if the theoretical drawdowns they produce also reside within your comfort level.

 

 

Comfort Follows Design

 

The test of comfort

is how it behaves

on a bumpy road.

 

Clip: http://www.mibo.cz/images/

m-comfort.jpg

Sat, 29 Jan 2005

 

Wanting a Bargain

I am very interested in the ideas put across on Ed's Website. I have a dual profession - working at [Brokerage House] and also I am a psychotherapist with a particular interest in the unconscious. Needless to say, the workshop seems like a great merge of two great interests of mine.

A few questions ...


Are there ever workshops that are more than just 1 1/2 days, and more affordable?


Once a workshop has been taken, is Ed available for any follow up guidance via email? If so, does he charge for this?

Are there workshops lined up for 2005? (I'm assuming the November one listed on the website was for 2004). 2006?

 

Are they always in the same place, or does the location vary?

I appreciate your responses, and would love to venture into this arena as my trading skills are greatly lacking.

 

I lost hundreds of thousands of dollars several years ago - which I had carefully built up over 20 years. Now I have a small base to work with, more determination to learn - but am still making costly mistakes. It would be wonderful to feel more able to use my intelligence and inner resources to manage money effectively.

Thanks much for your time.

You might take your feelings about "affordable" into TTP as an entry point. 

 

You might also take your feelings about "costly mistakes" as an entry point.

 

 

 

Trend Followers Know

 

Trying to buy at a low price

can be a costly mistake.

 

Clip: http://www.nimonsigns.com/

Daniels%20low%20price.JPG

 

 

Wed, 26 Jan 2005

 

Consultation

Ed, I am not sure you will remember our conversation in October 2004 concerning finding the better contract month and market to initiate a position.

 

We specifically discussed the May 05 Sugar in relation to its positive spread and chart pattern. Well it finally broke out for a new contract high. We had entered several months ago and held with it not reaching our initial stop loss price. We are also long Oats which also is inverted.

 

Thank you for your help. Cash wheat is over 58 cents higher than the nearby march futures contract and rising. This seems very unusual especially since the Mar. is in a sideways to down trend. What do you think about the relationship between cash and futures when they are divergent?

 

I also noticed that Coffee is in a bull market with its spread and cash prices being weak. I would greatly appreciate a short response.

 

I see the increased number of visitors to your website grow every month and I am sure E-mails also.

 

So if you can find a minute I would appreciate your response. I am still considering applying for entry in the IV Tribe. My only reservation is makings sure that I will be able to keep my commitment before applying.

 

Thanks again,

FAQ does not provide instrument - specific trading advice.  See Ground Rules.

 

In some bull markets the cash leads the nearby deliveries and the nearby deliveries lead the distant deliveries.

 

While such inversion may confirm a trend, it might not be a substitute  for systematic trend following with good risk management.

December 16, 2004


My Visit to Incline Village Trading Tribe

... After landing in Reno I rented a car for the drive to Ed’s. It took me about 40 minutes to get to his home. It was a treacherous drive much like the drive from (another place) to (another place). You drive up the mountain (9000 feet) and then down the mountain to the bottom of Lake Tahoe on a very winding road.

 

I arrive and knock on the door ... we shake hands and I thank Ed for the opportunity to cross pollinate. I see a lot of old friends and I shake hands with everyone. There are only 2 guys that I do not know. Everyone from the IV Tribe arrive early Thursday to do trading research.

 

Everybody is downstairs preparing to present their research topics to the group for discussion. The purpose of the research topic is to become educated in an area that one is passionate about. It is Ed’s hope that each member will complete a well tested, documented 6 – 8 page report that will be posted to his website for the purpose of educating individuals much like a university does.

 

The topics are presented and each individual asks for feedback from each member. It is a very dynamic environment that greatly appeals to me. The topics are quite diverse ranging from: ... use continuous contracts when back-testing, to different types of pyramiding techniques within different trading strategies.

 

Everybody is clearly motivated with the topic of their choice. I noticed half the IV Tribe are futures traders and half are stock traders. This appeals to me because of the diversity. In the middle of the presentations a good friend arrives.

 

I knew he was arriving early for the workshop like me and it was really great to see him again. All presentations take to dinner time before everybody has had their opportunity to present. As a neat treat, a personal chef arrives at Ed’s to cook the tribe and guest members dinner. This was very cool and the food was fantastic. The dinner is finished and the tribe meeting is about to start. There are a couple of guys sitting in tonight that are not regular IV Tribe members, (three other tribe members) and myself.

The drums start to beat and everybody grabs a drum and a chair. The drumming is so intense and rhythmic that I really get into it. It slowly ends and Ed asks everyone to check in.

 

He asks if anyone has “anything live”. A number of members say yes and Ed probes each one to see who is the hottest, the one where the issue is already at the surface. Ed decides on someone and the process begins. Ed does something different; he asks another member to be the Process manager.

 

The rest of us follow the Process Manager's lead at all times. Ed interrupts the process a couple of times to teach and highlight different points that he wants to make us aware of.

 

The process really works the situation and the sender has a successful hot seat. At the end the PM asks the sender to combine the forms and the sender just goes with it.

 

The PM does an excellent job and the sender has a positive experience. The next hot seat ... Ed says there will be no manager on this one.

 

The sender has a difficult time. There is no flow. The sender feels very stuck, very alone, isolated. Ed then selects another PM. The new PM does a great job. He picks up the signals very easily and just hammers at the sender.

 

The one thing [another Tribe] does differently is to call out the individuals’ name.

 

After the hot seat I mention this [and find out] we don’t use the persons name as it tends to cause the individual to get CM back involved instead of staying in the moment.

 

I cut in on the PM and Ed put a quick stop to that. He said there can be one manager only so that the sender does not get confused. I apologize, we continue and I don’t make that mistake again.

 

Ed clearly shows by demonstration the key to the process is the manager. I believe this is not lost on anyone. In the end the sender member has an excellent hot seat.

 

Between each hot eat we do a mini checkout, where we encourage the sender for a great job and we describe how we felt during the hot seat. We have implemented this within our own tribe and I believe it is really beneficial to everyone. It is more current than doing a much longer checkout at the end of the night.

Ed then talks about ... hypnosis. He asks if there is anyone with anything hot and a few put up their hands. He again probes for the most ready candidate. Before the process begins he mentions that you can be hypnotized by association.

 

This process is very natural. This happened to me and 6 to 8 other members. I could really feel and experience what Ed was describing, the hallway, stairs, plush carpet, and the elevator.

 

Unfortunately for me the hypnotized individual picked #7 on the elevator which didn’t correspond to me so I snapped out of the trance.

 

From that moment I was able to witness the sender’s experience. It was very cool to see and experience. The evening went to about midnight and by this time with two regular hot seats, one hypnotized hot seat and the time change I was wiped.

 

We did our last check out and everybody then grabbed a piece of floor and went to sleep. I know better than to go right to bed after a meeting because I am always too wound up. This time was no different so it took me a while to fall asleep. Once asleep I had a good sleep but I was up at my usual 6:00 am time.

 

I remained at Ed’s for the Breathwork weekend which was another fantastic journey.

There are many points that I came away with but only a few follow:

There is no time constraints at Incline Village, things happen when they happen

Drumming is essential to set the tone and rhythm of the meeting

Everyone is willing to take the hot seat

The environment is 100% total encouragement

Everybody knows what happens at the meeting stays at the meeting

Thank you Ed for the opportunity to visit the IV Tribe, it really is a great bunch of individuals.

OK.

Sat, 12 Feb 2005

 

Chart Question

 

Dear Ed: I am new to trend following and wish to ask you what your favorite chart is for determining a given markets trend ? Daily, Weekly, Yearly, Hourly ?

Hmmm ... your list seems to lack scaling options for Minute, Second, and Millisecond.

 

If you want to go for the really high frequency stuff, you might try trading visible light, in the range of one cycle per 10-15 seconds.

 

Trading Gamma Rays, at around one cycle per 10-20 seconds, requires a lot of expensive instrumentation, whereas you can trade visible light "by eye."

 

I don't know of even one short-term trader, however, who claims to show a profit at these frequencies.

 

In general, higher frequency trading succumbs to declining profit potential against non-declining transaction costs.

 

You might consider trading a chart with a long enough time scale that transaction costs are a minor factor - something like a daily price chart, going back a year or two.

 

 

Visible Light

 

Has a wavelength

of between 400 and 700

nanometers.

 

That means,

if you get a position on,

by the time you get your stops in place,

you might miss a few billion cycles.

 

Trading at higher frequencies

 can make you feel blue

and send your account into the red.

 

Clip: http://web.haystack.mit.edu/

urei/pics/es.gif

Sat, 12 Feb 2005

 

Planning Article About Trading Tribe


Dear Mr. Seykota,

I'm 30 years old and working as some sort of freelance journalist. Since I'm extremely interested in the financial markets, my plan is, by the way, to become a money manager/advisor. Currently I'm working on realizing this intention.


...



Well, what I want to do now is recommending your site - for which I ask you, if you could give me some information about yourself (for example, when you were born, if you still work on your planned book etc.) resp. your site (when it was initiated etc.).

Thank you very much for your cooperation!

Regards,

For lots information about the Trading Tribe, and a little about me, you can order my book, due out March 31.

Fri, 11 Feb 2005

 

Testimonial


Hi Ed,

First, let me say that my business has made remarkable progress since your visit to [our Tribe] in early 2004. I am in new high territory and enjoying challenging myself with new levels of stimulation and new levels of production.

 

Of course, issues remain, and I enjoy taking them to tribe - now viewing issues as stepping stones rather than obstacles on the path of personal growth.

Physically, I also make tremendous progress and I am becoming an athlete of a new caliber. On this note, are you sticking to your commitment to your exercise system?


Testimonial follows:

What is significant about TTP is that it actually works. Despite how much we humans think we know about our minds and bodies, in the grand scheme of things, we have a great deal to learn. When it comes to applied psychology, there are things that work and things that do not – and things that work for some and not for others.

My own personal experience is that many western techniques lumped into the “psychotherapy” bundle are often ineffective. “Counseling” and “therapy”
typically translate to labeling and analysis – neither of which I find facilitates the accommodation of the issues (judgments, feelings and forms) at hand or stimulates personal growth.

 

In addition, I find that medication and self-medication often are merely a short term attempt to distract or destroy the conscious mind and try to pass a few feelings through the judgment filter – often part of processing a drama rather than processing the underlying form.

Methods like mediation, breath work, chanting, drum & dance, and a wide variety of other techniques, if practiced correctly, sometimes produce interesting results.

Nevertheless, TTP is special in that the approach is very innovative and direct in accommodating, re-solving and dis-solving judgments, feelings, and forms, and, as such, it often produces startling results.

 

In my own experience, TTP attends rapid personal growth, attainment of goals, betterment of personal relationships, and generally heightened experiences in all regards. I have an increased sense of awareness, greater depth of compassion, greater assertiveness, greater attentiveness, increased commitment to myself and my objectives, more “flow,” and a sense of deep and true confidence in myself.

Thank you, Ed, for sharing this wonderful technique with me.

All the best,

OK.