© Ed Seykota, 2003 - 2007 ... Write for permission to reprint.

Ed Seykota's

Frequently Asked Questions

FAQ Index & Ground Rules  ...  Tribe Directory - How to Join

TTP - The Trading Tribe Process  ...  Rocks  ...  Glossary

  TTP Workshop  ...  Resources  ...  Site Search  ...  The Trading Tribe Book

TSP: Trading System Project  ...  Breathwork

Associates Program  ...  Chart Server  ...  Contact Us

 

 

December 1 - 10, 2006

 

<==  Previous  |  Next  ==>

 

 

Questions

(Quotes from Ed in Red)

Answers

Sat, 9 Dec 2006

 

Migraine

Dear Ed,

How are you? I have some questions regarding migraines: what are some of the positive intentions for the painful feeling that accompanies a migraine? Have you experienced them and do you enjoy them?

Migraine is a neurological condition involving intense episodic vascular headache and, typically, high sensitivity to light and sound.

 

Medical interventions include application of cloths with warm or cold water, drugs and avoidance of "triggers." The condition and the effect of remedies are typically both inconsistent and unpredictable.

 

We are having some success applying the Rocks process to annoying conditions that are seemingly inconsistent and unpredictable.

 

 

 

Migraine

 

might be a medical condition

 

or Fred

 

trying to get your attention

 

 

Clip: http://www.migrainerelief.co.uk/

Thu, 7 Dec 2006

 

Calculus Rocks - From Failure to First


Thank you so much!

 

Before I went to see you, I was failing in Calculus and continually falling farther and farther behind.

 

After a few hours with you, even studying the wrong pages, I managed to get the highest grade in the class on the next test.

 

Thanks!

Thank you for sharing your process.

 

Sometimes the best way to get good at math is to get some new Rocks in your head.

 

 

 

I have a tough integral calculus problem.

Why don't we meet at your place

when the little hand is on the five

and the big hand is on the twelve.

 

Clip: http://mersworld.blogspot.com/

Thu, 7 Dec 2006

 

Feedback from Rocks Process


Here is some more feedback you might be interested in. Like I mention before, my family seems to be less interest in me and I feel less interested in their bitching and complaining.

 

Today I actually have a conversation with my mom in which not once she complained. She told me she signed up for therapy, she says she realized that there seems to be an underlying issue that motivates her to make her happiness depended on other people and that she clings to me (this is a recurring theme in her male relationships and I am not the only one she pushes away with that).

 

I am still surprised, I don't remember her ever not complaining and admitting that something might be wrong. It seems like the shift in our relationship following the process we did, created a shift in her. Pretty amazing.

Hope this helps pushing this work forward. Your work makes a BIG difference.

Thank you for sharing your process.

 

Yes, one good way to change others is to work on yourself.

Thu, 07 Dec 2006


Christmas Lights

 

Phenomenal light and music show.

 

Click Here

Thank you for the link.

Thu, 7 Dec 2006

 

Hall of Fame


Ed,


Congratulations on be inducted into the Trader Magazine Hall of Fame!  Nice photos, too. I can't imagine you spend a lot of time on your deck wearing a business suit ...

If you are planning a visit to [City] again, please let me know. The surf is up, and all is well.

Thank you for the heads-up.

Thu, 7 Dec 2006

 

An Old Friend from the Last Millennium


Dear Ed,

You may not remember me, but I remember you. I got your number, [years ago], by calling information. You were intrigued by the call not because of what I was selling, but because I had helped to discover element 110 and confirm element 106 within the periodic table of elements. I was impressed how you launched right into sophisticated questions on nuclear physics. I was working for William O’Neil at the time you invited me in the spring of 1997 to visit you at your Incline Village home ... The day we spent had a dramatic impact on me. We discussed everything from nuclear physics (my PhD degree) to the problematic US educational system to politics to rational (and irrational) governments.

 

I remember you asking me for my permission to psychoanalyze me over the course of the day. I was honored. By nightfall, after dinner, I helped [your son] who was about 10 years old at the time with his math homework then you played guitar. Toward the end of the evening, you told me you couldn’t see any real problems within me and that I should continue to be successful as a trader / investor. Some time later, I made a brief introduction so [Name] ... could get to know you.

A few months after our day together, William O’Neil offered me the coveted position to help manage his personal wealth. I accepted and did this until I left the company in 2001. Every year I traded for O’Neil, I came out ahead of the pack of his all-star traders. By 2000, I had my sixth year of triple digit returns in my personal account with over a 70,000% total return.

 

[Name] interviewed me for his book Conversations With Top Traders. O’Neil also made me head of stock market research and had me travel with him around the country to give talks to non-professionals and professional fund managers.

I left O’Neil at the end of 2001 because I wanted to focus on composing music, then eventually start up my own hedge fund company. I have composed music for the piano that has made people weep, rejoice, or experience other intense emotions. I once had to stop playing because my friend on the couch just erupted in tears. He said my music made him think of his father.

 

My own father who is deeply entrenched in the music business, having played for Frank Zappa’s Mother’s of Invention, been in two of Elvis Presley’s movies, and composed much for television and film ... I will pursue producing a CD sometime in 2007, but in the meantime, I have been focusing primarily on my trading career.

 

I am at a crossroads. I, together with two partners, started a hedge fund in Geneva, Switzerland that launched in Jan-2005. For 2005, it performed in the top 3% of all HSBC tracked funds, despite the market being quite flat and full of false starts. I was able to make major trading research breakthroughs that helped me perform in a somewhat trend-less market, in addition to enhancing the way I trade in trending markets. 2006 has been bumpier because of non-trading issues affecting the company.

 

Volatility scares custodial banks and many investors. I am thinking of either running only managed accounts or making the current fund my own, where I would have full discretion over all trading decisions. Still, I would have the custodial bank problem, a problem I must figure out.

I could just trade my own account, but I can make more money by trading both my personal account and managing accounts or a fund. I have lofty monetary goals because, to effectively execute and spread ideas that I believe can improve the world, it would cost quite a sum over a prolonged period of time.

 

But this is a discussion for another time, if you are interested. It is dear to my heart because of experiences I have had in California and in other parts of the world. Libertarianism and Objectivism (the philosophy of Ayn Rand) have ideas that can reduce the size of government and return things to a local autonomy. Unfortunately, history shows that nations move toward total central control in little steps, with totalitarianism as the final stage. The idealist in me says I can make a positive, significant difference here.

I think your FAQ section is brilliant, and that your ideas are vastly helping to improve people’s lives.

 

When people ask me how they can become a better trader, I tell them about your website. My personal philosophy has always been to pursue excellence in Career, Relationships / Friendships, Humor / Fun, and Exercise / Diet.

Thank you for staying in touch.

 

You might consider making a list of people who you think are effective in spreading ideas - and also make a list of people (and agencies) who spend a lot of money specifically to spread their ideas.

 

Then see how many people appear on both lists.

 

 

Ayn Rand

(1905-1982)

 

Ayn Rand is effective in spreading ideas.

 

She doesn't wait around

to make money first

so she can spread ideas later.

 

Clip: http://www.libertystory.net/LSTHINKRAND.htm

Wed, 6 Dec 2006

 

Willingness Works Wonders


Well, it worked out even better than I hoped While I was talking to you, I finally overcame my resistance to standing up for myself. I felt something shift inside me.


The INSTANT I hung up from talking to you, The [local] police called. She had called them. She had reported that she had given the dog to me for two weeks and that the two weeks were up and I wouldn't give the dog back. I explained the situation to him, and he was very nice. He told me to save all my emails and documentation.

 

I told him she had been harassing me with phone calls and he said that he would tell her to stop calling me, or that I would file charges against her and given what I had told him, I would probably win.
So, once I became willing to do it, I didn't have to. Isn't that cool? Willingness is great, as you have so many times pointed out.

Thank you for sharing your process.

 

 

If You Carry a Shyness Rock

 

your efforts to break out

and become assertive

 

typically fail.

 

 

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

cartoons/assertive.png

Wed, 6 Dec 2006

 

Improvement

Hi Ed!

I have made a conscious choice to delay my answer. The reason is that I wanted to check my feelings of my personal development. I would like some "track record" of my personal behavior before reporting improvement. Now my life is good on a more constant basis than I have experienced before. I write this with my last mail in mind and know that I've overcome a lot of my problems. At the TTP-meeting one month ago I really held on to the feeling that "I will give up", and suddenly it actually helped me to face that feeling from that moment.

 

Yesterday I was at the new TTP-meeting and I could gladly report the improvement, and it feels stable now. My life used to be like a long position in the stock market, ups and downs.

I'm trying to get the grip of SVO-p tense as I write this but I'm afraid I haven't really understood it all. I got the message but might miss out in my grammar.

Thank you for sharing your process.

Wed, 6 Dec 2006


Magazine Cover

 


 

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

20061202/20061202issuecovUS400.jpg

Thank you for the heads-up.

 

 

IMM March Dollar Index

 

The circle marks the appearance

of the magazine.

 

 

Tue, 05 Dec 2006


Ed Seykota Interview

Hi Ed,

I read the November 12 FAQ, "Ed Seykota Interview," and wonder why the author asks what you meant by your now famous statement, "Win or lose, everybody gets what they want out of the market."

Of course, you do explain this over and over in FAQ, most trenchantly, I think, with "Rocks." And had he / she taken the time to read FAQ, he / she would know this.

More interestingly, you also provide a clear analysis of this statement right in Schwager's book, in the five paragraphs that follow that line. In the context of those paragraphs, your statement is not the mystery that the author (along with so many others, including Schwager) makes it out to be.

I think that this chronic inability to understand the meaning of this statement is the result of a willful blindness, related to one of the key issues you now address with "Rocks" -- unwillingness. On some level, we all know that we are getting what we want, and most of us have a hard time accepting this.

On this note, I think it is no accident that the interviewer misquotes that famous line [he/she writes "from the market;" the quote in the book is "out of the market."]. He could barely bring himself to read it.

Thanks, again for all of your work,

Thank you for sharing your observations.

Tue, 05 Dec 2006

 

Incredible Young Performer


Have you ever seen anything quite like this ???
Impossible, must have been dubbed.

 

Click here

Thank you for the clip.  I know some pretty amazing musicians. 

Tue, 05 Dec 2006

 

50 Years of Playboy

This web site has ALL the Centerfolds from the whole 50 years of Playboy!

It's being sent to you strictly as an educational tool so that you may study the decline of moral values, and hair styles, camera angles and such, in publications of this type over the span of 50 years.

Click on the year blocks at the top or bottom of each page to follow this trend.

http://www.mdig.com.br/gallery/

Thank you for the data. I wonder what kind of system you are back-testing.

 

 

 

 

Clip: Playboy Magazine

Tue, 05 Dec 2006

 

Ed Seykota Interview


Hi Ed:

I hope all is well.

This is a quick follow-up to see if you've had a chance to answer the enclosed questions for our interview.

I'm confident our subscribers would enjoy (and benefit from) your answers and insight.

Our interview would be featured in an upcoming issue of [Magazine].

Please let me know if there's still an interest or a fit.

Thanks!

Regards,

[Name]
Contributing Editor
[Magazine]

See FAQ Reader Reply

Mon, 04 Dec 2006

 

Wants to Start

Hello,


I am not sure if this is Mr. Seykota but I am going to assume that it is.


I am a freshman at [School]. I am trying to start an investment club ... and I am interested in basing the club off of the tenets of trend following. however, I realize that I do not have the necessary knowledge to run an organization that I do not know enough about. I only know so much about trend following and I was wondering if you could provide any guidance for where I should start in the process of becoming more informed about trend following. I hope to hear back from you.

You might consider taking your feelings about not knowing enough to the hot seat.

 

 

 

Sometimes, Doing Something Right

 

is less important

 

than doing it with love.

 

Clip: http://www.tata.com/IMAGES/

knowledge_mainimg06.jpg

Mon, 04 Dec 2006

 

Family and Friends

Dear Ed,

I enjoy your FAQ very much. What a lovely professor you have! My Fred "snapshotted" him immediately. Forgotten are the pictures of happy couples and beautiful guys I tried on him / her. It has to be Doc Edgerton.

Concerning family I was also processing a lot of feelings. Now I get the impression you cannot discard family. They are always there, one way or the other. If you discard them you loose your roots. Your chance is to see / feel the whole picture how they express their love and the moments when they really do no good to you.

Finally at last, I recognized that my brother apparently expresses his love by giving me endless, sometime not really wanted or needed advice.

 

That was what happened, when I clearly showed my limitations in our relationship. Instead of getting mad at me, he hugged me and started giving me endless advice including: I should have painting lessons that is it. I was really astonished: (1) relationship is much clearer now (2) he seems to like it, too, (3) his advice is his expression of love.

Your ideas concerning Grandmas of Nov 19 are also very much appreciated. Helped me to see the whole picture! I remember that Grandma even donated my first stock to me when I was about twelve. She said: There is stock around investing in those you get more stock every two or three years. Look, I had ten Bayer and now I have fifteen. (That's just an example among others). Feels so good to see the whole story.

.. and somehow I get the impression I really put an effort in being unhappy for the last two years. Now I am about "remembering" what made me happy something like a "world of friends" or "friends all over the world". The recollection is the happiness already and I hope this is going to stay.

PS: My would-be-tribe member wrote me an email at the very same time I was mailing at you on Nov 19, 2006. Reported a major break-through in his ideas about trading futures on that weekend and thanked me for an idea. He never did all of those before (musing on trading at weekends, writing emails on Sundays and thanking me). There was some sort of parallel action (both of us were working on their issues at that weekend). I was really moved when I saw his email. Now he seems to be really into his system development. No excuses.

... and your material is most appreciated ;o)

Thank you for sharing your process.

 

 

 

Pouting

 

takes about as much effort

as being happy

 

If you have a pouting Rock

you might often find yourself

in the pouting form.

 

Clip: http://members.shaw.ca/calgarytourettes/

Sun, 3 Dec 2006

 

Day-Trading Trade-Off

Ed

You say that the higher frequency costs of day-trading (as opposed to longer term position trading) outweigh the benefits. How do you know this?

Is one of the reasons you come to this conclusion that it is harder to backtest day-trading strategies (which follow real-time rules and are difficult to code)?

You say that sitting in front of the one-armed bandit and over-trading is bad for your trading account, although it may provide entertainment and excitement. Cheaper and more fun to go to Vegas then.

But what is wrong with trading as frequently as the opportunities present themselves? If you can successfully take more frequent trading opportunities you should be able to grow your capital faster, despite the increased trading costs.

You can find an optimal trading frequency by back-testing. 

 

You are likely to get fairly severe profit roll-off for frequencies above once / month. 

 

To get a gut feel for the effect of transaction costs, try month-trading your house a few times.

 

 

 

Real Estate

 

If they could get transaction costs down,

people would likely day-trade their homes.

 



Clip: http://www.realestateclipart.com/

Fri, 1 Dec 2006

 

San Diego Tribe


Hello Ed

I notice that someone wrote to you (published on FAQ) about a San Diego trading tribe. I do not see a TTID for a SD tribe, and I am wondering if you will provide the email address of the person who wrote to you about having an San Diego tribe to me.

FAQ does not reveal the identity of contributors. 

 

You might consider starting your own Tribe.

Fri, 1 Dec 2006 08:02:44 -0600

Hello Breathwork Support Team!

As of December 1, 2006 my fund's AUM are $2.038 million. November returns positive performance for the fund. There are no new investors or capital additions for the month.

I am pleased to see some positive performance, and I plan to continue to stick the trading system and raise new assets.

My physical fitness program is going well. I am maintaining my weight loss, and my healthy eating and exercise patterns are becoming more habitual.

Thank you for your continuing support. I plan to report my AUM to you monthly until they exceed $5 million.

OK.

Sat, 2 Dec 2006

 

Observations re: TTP/Rocks


Hi Ed,

I write to you to share a couple of observations regarding our local trading tribe.

Firstly, I have many queries and requests for information from people that are really interested in joining our tribe. Unfortunately the vast majority (like 99%!), although initially very keen, suddenly become disinterested when they realize that Trading Tribe has very little to do with teaching trading techniques and/or discussing markets. (All one needs to do is to read the TT website or the TT book to figure that out but it would appear that few bother)

This leads me to believe that the fame of the ‘Seykota’ name seems to attract people initially as they somehow imagine that joining a trading tribe will be what is required to learn some of Ed’s ‘Secrets’ and then the Cash will quickly follow.

When politely told that, “We don’t do ‘secrets’ here”, I never hear from them again.

(Strange that!)


Secondly, in our Tribe we are all able to take the hotseat and move through our forms. As far as communicating via forms is concerned we can all do this without any problems. Where the problem arises, however, is in gaining new insights and wisdom. We seem to be stagnating here.

(I have written to you regarding this on previous occasions)

o.k. fine, enter the ‘Rocks’ process.

We attempt to implement some of the ‘Rocks’ philosophy (as best we can) but I find that there’s not much enthusiasm here, in fact downright resistance.

Classic TTP is ‘easy’ (not the best choice of words I know), you sit in the hotseat, receive/send, do the forms, feel your feelings etc etc.

‘Anyone’ can do it.

With ‘Rocks’ there’s no real step–by-step instructions and it relies more on innovation and intuition as well as being very in tune to what’s going on as every case is different. (well at least more-so that TTP . . . . in my mind anyway)

The net result of the new ‘Rocks’ process, for our tribe, is that some tribe members have decided to take their leave from the process. I suppose this is fine as it’s a case of each to their own.

It is frustrating for me, however, in that we (including myself of course) weren’t able to give it a good honest effort.

So not only has the tribe stagnated as I mention above but it seems that we prefer to remain stagnant by not being willing to try different things.

As I say, ‘Rocks’ requires a bit more sensitivity and a bit more thinking rather that the ‘step-by-step’ classic TTP.

I wonder if this is another example of people, in general, (my good self included) wanting to follow step-by-step instructions rather than adapting & thinking for themselves?

Thanks Ed


p.s. Were it not for the tyranny of distance I would like very much to spend a year or so at Incline Tribe with yourself and tribe members working with all to gain a better understanding of the process . . . but alas, the Matter Transfer Machine has not (yet) been invented so for the moment, here I shall stay.

We don't have much evidence that discussing markets and trading techniques contributes to prosperity.

 

We do have evidence that aligning thoughts, feelings and snapshots moves us quickly toward right livelihood.

 

 

 

Free Money

 

rarely is.

 

 

Clip: http://www.picniclightning.net/money.jpg

 

Date: Fri, 1 Dec 2006

 

Approval


I send you an email to FAQ ... It doesn’t get put on FAQ.

I wonder did you get it and then wonder if you did why you didn’t publish it.

I would like you to clarify for all FAQ readers if all comments are published or now you are so in demand do you have to be selective or what is posted; I am not against this I have just never fully understood how it works; I feel I have had many not put up on the site and wonder if it’s stray emails, spam filters etc or editors discretion.

Also, do you find that a common trait in traders who consistently lose is that they are seeking approval from others? I hear it mentioned often and although I give off a ‘couldn’t care less’ persona in reality I think really I couldn’t care more what people think of me.

Also I feel after seven years of trading I have a lot of what I need knowledge-wise in my head and feel close to making a go of it.

I almost feel as though if I could trade semi consciously with my sub conscious working and my conscious mind not interfering there is a very good trader in me trying to get out.

Do I state the obvious and is this the battle we are all trying to win, letting our subconscious knowledge seep out for our benefit without our conscious feelings, fears, dreams, aspirations etc all sabotaging what we are capable of, because we have failed to feel them and reach an Aha with them?

I often feel if I could trade in a trance I would do a good job.

These ideas are vague I know but can you kind of see where I’m coming from.

A quick aside, thanks for the English comedy you seem to be embracing, the photo taken from ‘The Office’ and the ‘women know your limits’ video clip really made me smile.

You might consider taking your feelings about approval to the hot seat.

 

 

 

If the thin guy inside gets out

and runs away

 

the fat guy may then become

 

pure fat.

 

Clip: http://archive.farcus.com/store_files/

store_images/1995/05/FR051895.jpg

Fri, 1 Dec 2006


More Funny Mentals

Hello Ed, Have you ever seen a stock pay a dividend around 50-60% for over a year? Do you own any of [Name] or the stock now? What looks to good to be true usually is. I'll most likely wait until after Jan. to see what the possible buy out price is. Its all complicated and grey to even begin to predict . I'll take a small bite and use some discipline so I don't get tempted to drowned in pleasure, if any action is taken. If you play analyst for income and rated it from 1- 10 where is it now and after Jan. 07. Good Day and thanks for pictured opinions, they give more and less complicated advise. Later

You might consider standing aside until the trend  comes around and confirm your ideas.

 

 

Too Good to be True

 

is often a matter

of being on the right side.

 

Fri, 1 Dec 2006

 

Tinkering with a Winning System


An old Indian chief sits in his hut on the reservation, smoking a Ceremonial pipe and eyeing two US government officials there to interview him.

One government official asks, "Chief Two Eagles, you know the white man For 90 years - his wars and his technological advances, his progress, and the damage he does."

The Chief nods in agreement.

The official continues, "Considering all this, in your opinion, where does the white man go wrong?"

The Chief stares at the government officials for over a minute and then calmly replies "When white man finds land, Indians are running it.

* No taxes ...

* No debt ...

* Plenty buffalo ...

* Plenty beaver ...

* Women do all the work ...

* Medicine man free ...

* Indian man spend all day hunting and fishing, all night have sex ..."


The chief leans back and smiles. "Only white man dumb enough to think he can improve system like that.

One hundred years ago, none of the taxes below exists; the US is the most prosperous nation in the world; we have no national debt; we have a large and prosperous middle class; moms typically stay home to take care of the kids.

 

Corporate Income Tax
Dog License Tax
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel permit tax
Gasoline Tax (~42 cents per gallon)
Hunting License Tax
Inheritance Tax
Inventory tax
IRS Interest Charges IRS Penalties (tax on tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax

Property Tax
Real Estate Tax
Service charge taxes
Social Security Tax
Road usage taxes
Sales Tax
Recreational Vehicle Tax
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone federal excise tax
Telephone federal universal service fee tax
Telephone federal, state and local surcharge taxes
Telephone minimum usage surcharge tax
Telephone recurring and non-recurring charges tax
Telephone state and local tax
Telephone usage charge tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft registration Tax
Well Permit Tax
Workers Compensation Tax

 

 

Tribal Culture

 

No Tax Returns

Medicine Man Free

 

 

Clip: http://www.bnr-art.com/terpning/

blessing-from-medicine-man.htm