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

 

March 28 - 31

 

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Questions

(Quotes from Ed in Red)

Answers

Thu, 31 Mar 2005

 

I Would Like to Join


What do I need to do?

See Tribe Directory, above.

Thu, 31 Mar 2005

 

Truth

See: Uncomfortable


Ed,


hope all is well. I have a question regarding the posting "Uncomfortable" on March 24th 2005. You say: In TTP, telling the truth sets you free.

The way I understand this, not telling the truth is a way to ignore feelings. Once I state the truth, I can see what feelings arise and take these feelings into my tribe meeting and therefore resolve this issue. Do I understand this concept correctly?

Thank you

The truth we seek is the knowledge of how to apply ourselves toward right livelihood.

 

K-nots, protect us from truth and keep our lives in drama.

 

To untie k-nots, fully experience whatever appears in the moment.

 

A Tribe provides an environment in which to experience forms and untie k-nots.

 

Accessing truth is difficult by yourself, since k-nots self-protect. 

 

 

 

You Can Twist and Turn

your k-nots

 

by acting them out

as dramas.

 

You can untie them altogether

by experiencing them.

 

Clip: http://www.mit.edu/~kardar/

research/seminars/knots/Introduction.html

 

Wed, 30 Mar 2005

 

Book



Ed:

A wise man stated that his book would be out "the end of March." Tomorrow is that day. Please let hungry minds know how to order ... the book, that is.

 

Do not let them treat you like Socrates. Remember that quote from Jonathan Swift's Thoughts on Various Subjects, Moral and Diverting:

When true genius appears in the world, you may know him by this sign, that the dunces are all in confederacy against him.

Thanks for your work.

You may order the book on March 31.

 

 

 

Wed, 30 Mar 2005

 

Wants Trading Resources

I am not a trader. I was recently introduced to the idea by a friend whom attended a class of some ...

 

He was charging $ 6,000 to teach 3 - one day courses in trading. I almost believed that he was legitimate except he told so many white lies as to who he trained under and the extent of his experience.

 

I was able to dissect to some degree that they were untruths. So, I did a Google search, found ... the Michael Covel book, learned about Ed Seykota ... hence your email addresses. I would like to to learn how to trade.

 

I need a resource. Perhaps you can recommend a school, books, or other resources.


Sincerely,

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

 

You can find a wealth of information about trading, all for free at www.turtletrader.com

 

You seem to be asking what to do.

 

A substantial part of trading is knowing what to do.

 

You might consider taking the feeling of wanting to know what to do to a Tribe meeting as an entry point.

 

 

 

A Wise Man Knows His Teacher

 

may be a fraction

of his own age.

 

Clip: http://www.math.uiowa.edu/

~ilcho/advisor.jpg

 

 

 

 

Wed, 30 Mar 2005

 

Secret Issue

Dear Ed,

 

[ .....

 

..... ..... .....

 

..... ]

 

Have you ever been in this situation? Probably not. Ed, I just don't know what to do.

Thanks for listening.

I understand all emails sent to you are yours to publish, but I would appreciate it if you didn't include this on your site.

You might consider intentionally going for a whole day without communicating anything to anyone.

 

 

 

You Have The Right

To Remain Silent

 

http://www.10-7.com/humor/

photopages/you%20have%20

right%20to%20remain%20silent.jpg

 

Wed, 30 Mar 2005

 

New Tribe

Hi Ed,

I want to let you know that we have a tribe in [Place]. 


I have a request as far how to post this contact. I do not want to put my name on the Internet, so please post the email address only.


I also want to invite you here. We may benefit greatly from your presence and guidance.


And also thanks for doing all this. Those meeting are the most meaningful thing I have ever done. They give me hope. I figured state of hope is thinking about the future and seeing it the way I want.

 

In other words it is aligning the intentions with ... hmm.... with what ? I had a thought, but it escaped.

 

Hope is the state of liking my intentions. I like it.


Thanks again.

To appear in the Tribe Directory, follow the instructions at the link above.

Wed, 30 Mar 2005

 

Functions

Hello,

I was wondering if you will be having any trading tribe functions this year?


Sincerely,

See FAQ Index page for information on the May 6-7-8 Workshop. 

 

I occasionally host special events for Workshop graduates.

Wed, 30 Mar 2005

 

Typoglycemia

 

Hi Ed

Given (a) your interest in the correct use of English and (b) your comments on spelling in March 17 - 27, I thought you would like to see this piece on Typoglycemia.



I cdnuolt blveiee taht I cluod aulaclty uesdnatnrd waht I was rdanieg The phaonmneal pweor of the hmuan mnid Aoccdrnig to rscheearch taem at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoatnt tihng is taht the frist and lsat ltteer be in the rghit pclae.

 

The rset can be a taotl mses and you can sitll raed it wouthit a porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe.


Such a cdonition is arppoiately cllaed Typoglycemia -

Amzanig huh? Yaeh and yuo awlyas thought slpeling was ipmorantt."

I wonder which of the various permutations of

 

 rdanieg

 

you might recognize, out of context of the rest of the sentence.

Wed, 30 Mar 2005

 

Phillip Larkin


Hi Ed,

I am really interested in this line from the great English poet Phillip Larkin.



An only life can take so long

to climb clear of its wrong beginnings,

and may never.


-- Phillip Larkin, Aubade (1977)



Do you agree with the climbing analogy?
Should we take an "ah well" approach to the "may never"?

I would appreciate your thoughts.

The climate clear of FAQ

ne'er declares what's best for you.

 

We judge thee k-not, sir, nor do we

should upon thy poet-tree.

 

 

 

 To To Climb a Poet-Tree

 

it helps if your own limbs

are Longfellows

 

 

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

PP023.html

Tue, 29 Mar 2005

 

S&P Exponential MA
see Stock Market Programming

March 25, 2005

Dear Ed,

For some unknown reason, this morning as I was on the train to work, I had a sudden urge to do the EMA exercise you posted on 3/24.

 

And so I just did it. I am amazed at how efficient I am, and before I know it, I get it done. I haven't had this sense of motivation for a long time. I mean it isn't a complicated exercise, but it means a lot to me.

 

I feel like a basketball player who has somewhat lost interest in the game, and then somehow from playing a game of HORSE he regains some of the enthusiasm he used to have with the sport.

 

It just shows me how much I can accomplish when I have a definitive goal in mind, and when I am fully committed without a bit of doubt!!!

So here I am to ask if you have another project? Thanks!


-----



Regarding the SP-EA backtest, I have made three subjective interpretations:

1. The S&P cash index has open always equal to previous close. Therefore, I use SPY (the ETF) instead.


2. Because the value of 1 share of SPY changes over the last 11 years, I
use an $1000 investment every time I have a signal. (I have it in the code where I can easily change to 1 share per entry)


3. I am not clear on your definition of compounding return.

 

Is the former log(P1/P0)/n-1 where P1 is the Portfolio Value at the end of the run, P0 is the initial value and n the number of years? And with the drawdown percent, what will be the denominator (since it is a percent)?

So what I have done instead is use the final P&L (how much money made) divided by the largest drawdown. Since the trade size remains constant throughout the period, I hope the result is similar enough.

I go from 3/28/94 -> 3/25/05, and a dual MA from 5 to 300 (increment of 5).

 

The top three combinations are 150-210, 105-275 and 110-265. (Please see the enclosed spreadsheet) I've plotted it on a 3D-chart. It seems there's a region (bold area in the Excel sheet) of relatively high bliss.

Ooooops, I just re-read the project requirement and I notice you are actually asking for single moving average. OK, let me redo it here:

For single MA, the top three combinations are 260, 265 and 250. (Also in the enclosed worksheet)

 

 

Consider an annual return of 25%.  We have:

 

 

Year

Equity ($)

0

1000.00

1

1250.00

2

1562.50

3

1953.13

4

2441.41

5

3051.76

 

 

Total return:

$2,051.76 over five years

 

Total Percent Return:

205.18% per five years

 

Average Annual Return:

41.04% per year

 

Compounding Annual Return:

25% per year

 

If your largest percent drawdown is 50%, then your frequency is 25% per year over 50% = .5 per year.

 

That is, you earn back your largest drawdown .5 times per year.

 

-----

 

See the Resources link, above, for more exercises.

 

 

 

 

 

 

Tue, 29 Mar 2005

 

Richard Dennis Interview

 

Hello Ed,

The reader who reported on the recent Richard Dennis interview and his apparent conversion to a fundamentalist approach left out a revealing statement Mr. Dennis made in the same interview:

I've done my share of talking myself out of systems that would have worked for years.

Seems he's up to it again, and half knows that he is.

I suppose Richard could join a tribe and work on his k-nots, with the rest of us.

 

 

K-nots, There's Lots.

 

The Trading Tribe:

another system that works.

 

 

Clip: http://www.mspong.org/

cyclopedia/images/knots.jpg

Mon, 28 Mar 2005

 

Penny Stock


Hello Ed,

 

#1 Have you any experience in trading stock below $1.00, or know of anyone who trades it consistently ?

 

#2 How is one to get hold of your book ?

 

#3 Will your trusty word processor be leaving now that the book's done?

 

#4 Are you a very emotional person compared to others you know?

 

#5 Systems do not take the emotions out of trading?

1 - Penny stocks can be expensive

2 - Watch for information on Mar 31.

3 - TWP can help with research.

4 - Everyone I know is emotional.

5 - Trading has no emotions. Systems have no emotions. Traders have emotions.

Mon, 28 Mar 2005

 

Update on [City] Tribe



Hi Ed,


I notice that our intentional community is "Gray" in your directory indicating Verification before December 2004.

We now have 3 members. Please update the directory at your convenience.

 

Membership:
2, 4, 5, 6, 4, 3, 2, 3

Up, Up, Up, Up, Down, Down, Down, Up ...t he shakeouts in our membership is volatile, but our Intentional Community is willing to have it go up and down.

 

-----




Ed says: I am planning to bring up a chart service about mid-year.

If you do not mind, can you please elaborate on this plan. As this seems to contradict the Ground Rules.

 

FAQ does not ... offer instrument-specific trading advice, or recommend specific trading system parameters

 

Is this charting service in a separate website exclusive of FAQ?

Thanks!

You are back in the black.

 

The chart service intends to be educational, not recommend-ational.

 

 

If You Want My Advice

 

get rid of all your advisors

 

including me.

 

Clip: http://www.aperfectworld.org/

4003.htm

 

 

Mon, 28 Mar 2005

 

Trend Following Course

Is there a course that is available that teaches your method of trading?

 

 

Mon, 28 Mar 2005

 

Tip for Authors: Get a Platform


Hi Ed,

from today's WSJ. This might apply to your forthcoming book.

 

-----




Get a Platform

By JEFFREY TRACHTENBERG
Staff Reporter of

THE WALL STREET JOURNAL
March 28, 2005; Page B1



Every writer wants his or her name on the bestseller list, but these days it helps to have a proven following. T. Harv Eker, who hosts "success" seminars, recently pushed his first book -- "Secrets of the Millionaire Mind" -- to the No. 1 spot on this paper's business-book list just two weeks after it was published.

"Secrets" shot to the top without the help of Oprah or a major marketing campaign. Instead, Mr. Eker has succeeded thanks largely to a "platform" -- industry lingo for a regular column, frequent TV appearances or recurring speaking gigs that allow an author to pitch to a ready-made audience.

In an industry that rarely spends big money to promote the titles it publishes, authors who have their own following are in huge demand. And indeed, an increasing percentage of nonfiction books sold these days has a platform attached, says Lorraine Shanley, a principal at the consulting firm Market Partners International Inc. Such writers are more attractive to publishers because they can generate media exposure and free publicity. "It helps if you have a built-in audience," she says.

Mr. Eker, for example, has made good use of the 100,000 e-mail addresses that he has collected since 2001 from his various seminars. Prior to the publication of "Secrets," he sent out an e-mail blast explaining that the book was on the way. He then followed with a second e-mail announcing that "Secrets" was available for sale online and in bookstores.

 

He also promoted the book to those attending his seminars, and then parlayed interest in his talks by printing an offer of two free tickets to an intensive weekend "Millionaire Mind" seminar on the front of the book's dust jacket. Those who want to take advantage of the offer have to show proof of purchase of the book.

The authors of these popular books promote the titles at regular public appearances.

"I have a following of supportive and loyal people who are looking to succeed in their life, and they tend to resonate with the message that I provide," says Mr. Eker, who estimates his seminars have attracted about 250,000 people. Barnes & Noble Inc., the nation's largest book retailer, recently set up shop at one of Mr. Eker's seminars in Seattle. The retailer sold 900 copies that night alone. The book now ranks seventh on The Wall Street Journal's business list1.

Mr. Eker's agent, Bonnie Solow, president of Solow Literary Enterprises Inc. in Santa Monica, Calif., says such results underline how the nonfiction publishing business has changed. "Today I need to know your credentials, your speaking calendar, your media contacts, and whether you have an active Web site," she says. "If you want a serious book deal, those matters have to be answered in the affirmative."

At a time when U.S. book sales are basically flat, the focus on platforms is a byproduct of strained publicity budgets. Unlike the Hollywood studios, which put trailers in theaters months in advance for upcoming releases, publishers don't do much to tout their own titles in advance. Readers rarely know about a new book until they read a review or see an author on TV.

 

This promotion void makes authors with their own drumbeat, especially in such nonfiction arenas as spirituality, how-to, and finance, more desirable.

"Only a small percentage of books published get any advertising," says Carol Fitzgerald, president of the Book Report Inc., a closely held company that operates book-publishing-related Web sites. "The sales expectations of many books don't warrant any, given the costs involved." Ditto for author tours. This explains, she adds, why so many TV personalities have book deals: Publishers want to know where an author is going to promote his book and to whom.

One of publishing's hottest stars today is evangelical minister Rick Warren, who has used his network of admiring pastors and like-minded churches to sell more than 21 million copies of the spiritual guide "The Purpose-Driven Life" since it was published in October 2002.

Joel Osteen, senior pastor of the Lakewood Church in Houston, has used his pulpit and TV exposure to turn "Your Best Life Now," published in October, into a national bestseller with 2.5 million copies in print. The book is listed prominently on his Web site, joelosteen.com2, as well as a schedule of upcoming book signings and speaking events. The television evangelist says he has 28,000 people in the pews each week, as well as a TV audience in more than 100 countries.

Others generating significant book sales include Jeffrey Gitomer, author of "The Little Red Book of Selling: 12.5 Principles of Sales Greatness," which now boasts an estimated 235,000 copies in print after being published Sept. 6. The book has so far hit the business list at the Journal 20 times and owes much of its rise to the author's platform, which includes marketing seminars, a syndicated business column and a free weekly e-newsletter that reaches an estimated 82,000 people.

Ray Bard, publisher of Austin-based Bard Press, which published the title, says that one of the things he looks for is the ability of a new author to generate public interest. "If you have an e-zine or a seminar business it helps get the book kicked off right," he says.

Some experienced authors say they're filling a vacuum created by mainstream publishers who refuse to invest time or effort in ensuring that the books they publish gain traction with readers. "They print your book, they get it into a bookstore and they sit back and wait and look at their computers and ask, did he sell any books today?" says Mr. Gitomer, who has written three other titles. Bard Press, he adds, has been an exception because it succeeded in getting books into the stores in a timely manner. "I learned a lot of lessons thinking other publishers would help me," says Mr. Gitomer. "The only thing funnier than that was Woody Allen live in the 1970s."

Write to Jeffrey Trachtenberg at jeffrey.trachtenberg@wsj.com

Also important, in the long-term, is to say something worthwhile between the pages.

 

 

 

Relying Solely on a Platform

to advertise your wears

 

can lead to sore toes

and a backache.

 

 

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

652-BAMBI.JPG

 

Mon, 28 Mar 2005

 

Testimonial

I like to pass psychological kidney stones. Thank you p-k-s for the AHA!

Sincerely,

The formation mechanisms for Calcium phosphate and calcium oxalate in the kidneys may be, at least partially, under Fred's control.

 

Along with other conventional remedies, you might try taking your feelings about the stones to your Tribe as an entry point.

 

 

 

Well Mr. Osborne,

it may not be kidney stones

after all.

 

Clip: avconline.avc.edu/faculty/ slangjahr/tidbits.html

Mon, 28 Mar 2005

 

Re: Uncomfortable (FAQ 3/24)


Dear Ed,

I take your suggestion and start trying to say the new sign, "I do not like feeling uncomfortable. When I feel uncomfortable I like to blame it on others."

I say it and I notice my feeling. I feel funny. It sounds hilarious. I smile. I laugh.

I don't know why (well, knowing is optional) - I thought I'd feel "uncomfortable" about those words about myself. After all, my 2005 proclamation is to take responsibility, and that's like a slap in the face. But I actually feel OK saying those words. The way you phrase it, it just feels so funny to me, and I notice that's actually what I've been doing.

At first I wonder if it means I am born to blame others, and that it will go on forever. As I keep saying it, an aha pops up - the corollary seems to be if I feel comfortable, I don't need to blame others. And so just like the statement itself, when I feel comfortable about saying it (actually laugh with it), I don't blame anyone but just appreciate learning about my true self.

Thank you Ed!!!! I am here to make a commitment to keep saying it daily for two more weeks, and notice what else comes up. This is great stuff!!


I still have a grin on my face. Thanks.

Whatever you experience disappears.

 

 

 

Disappearance

 

Count the men and watch

as one disappears

and then reappears.

 

When you fully experience

this puzzle,

it, too, disappears

as a puzzle.

 

Clip: www.crazy-jokes.com/ Tricks/disappearing.shtml