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December 23 - 31, 2006

 

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Questions

(Quotes from Ed in Red)

Answers

Sat, 30 Dec 2006

 

Leaving a Dead-End Job

Dear Ed,

I hope you are doing fine and have nice plans for New Year's Eve.

Ed says:
Assimilation seems to work best in person.


In the moment I pen-pal you and discussion with the boss is imminent an old friends calls! He offsets his difficult childhood by studying psychology and really delving into friendship. He will be my real-time expert on the matter. Phoned him up today and looking forward to get to know his ideas on friendship and human development. See what he says about your ideas.

Now I have seen my boss for the last time. Lost my last illusions about his caring about me. He is really flourishing on people that go along when he sells his opinion as the reality allowing no other views or opinions. For the pay I went along and lost all my energy in the process.

Looking forward to create my own workplace and following a path of development.


Good luck to you and your family.

PS: Fred is working his way from the picture of Progress Report of Dec 24 to Commitment of Dec 26 to Trading Discussion, Part III of Dec 26 to picture of Teenager of Dec 26. Now he / she / it is digesting your and Aristotle's ideas about friendship. Funny. I am curious what comes next.

Thank you for sharing your process.

Sat, 30 Dec 2006

 

Breaking to the Upside


Hello Ed

I find your Trading Tribe very interesting. I have been trading now for many years but have been a failure. I need help and it probably is in money management. I'm what you would call a "very little fish". I do have a good deal of education behind me (perhaps that's the problem?). I've been in the top 10% academically and if I can compete there than why not trading?

I'm hoping this peer group interaction will help me break out to the upside from my "flattened like a pancake" career so far.

I've bought the Jan Euro puts 131.00 strike. I'm betting the dollar will rally at the start of the new year.

Hmmm ... you seem to be looking for an upside breakout for your career by betting against an upside breakout in the Euro.

 

 

Eurodollar

 

 

Sat, 30 Dec 2006

 

Has Blast and a Good System



Dear Mr. Seykota,

 

I wrote to you on Sunday 21st. December, 2003 and your reply was TTP is a blast. I joined a tribe and got a blast. I believe I have a good system with subtle difference to performances within the system. I wish I had joined your program for help in fine tuning my system.

 

I hope you and your family have a happy New Year.

Thank you for sharing your process.

Thu, 28 Dec 2006

 

Rocks Process Melts Guilt


Hi Ed,


I just finish reading all your documentation of the rocks process. Thank you for your effort to document this new process. It is very educational.

Several months ago I participate in ... the rocks process. I am still amazed by it's effects. My mom has been unwilling to feel sadness, loneliness and anger for a long time. Before the process I feel it is my responsibility to take care of her and make her feel better.

 

After the process my mom seems to be doing much better and we have some good conversations. During the holidays she feels sad, lonely and angry again. I call her on Christmas Eve, she does not answer the phone, she actually turned the phone off. I try two more times. She calls me the next day and is crying and telling me how horrible everything is. I am glad she shares her feelings with me. She does not want to talk to my girlfriend, because she is just too sad.

After our conversation I feel angry and disappointed, I think it is pretty disappointing that my mom can't talk to me on Christmas Eve because she is too sad and then refuses to talk to my girlfriend.

 

I share this feeling in an e-mail. My mom apologizes and tells me about all these changes she is hoping to make to be happy. She does this all the time and never follows through on her commitments. I continue to be disappointed that my mom can't run her own life, it feels good to share this with my girlfriend.

 

I eventually lose interest in the situation and am thankful to spend Christmas with my girlfriend. I don't feel a responsibility to worry about my mom. I offer her my support if she is wanting to make some changes. I let her live her life. This feels great!

At the same time I notice how I pick up a lot of her ideas about money and business success. I know there are some rocks holding me back. I never see this issue clearly or even identify it. Somehow this changes and I am now totally focused on it. I feel regret I am not attending the rocks seminar, I feel upset that I can't afford it. (Admitting that I can't afford something brings up a strong emotional reaction in me).

Thank you for your work.

Yes, working on our own Rocks, tends to "fix" those around us.

Thu, 28 Dec 2006

 

A Catch I Find Now

From the Past About the Future


Hi Ed,

Just notice that the FAQ (Regression) on Mar 7, 2003 says, "The Trend is your Friend, except at the End, where it'll Tend to Bend."

How about it tends to bend instead? ;-)

Thank you for the catch.

Thu, 28 Dec 2006

 

Six-Cent Nickel / Two-Cent Penny

 

Ed,

 

The actual production cost a penny is now up to 1.73 cents, according to the Houston Chronicle. Year in and year out, The U.S. Mint wastes taxpayer money by coining pennies.

Notice that the Mint produces $78,612,000 worth of pennies at a cost of $135,998,760, thereby wasting $57,386,760 of taxpayer money through November 2006. The all-in cost of coining pennies is even higher, after you include the time and money that merchants and banks spend sorting and counting them.

 



 

Hmmm ... We lose about .73 cents on each penny and try make up for it in the volume.  The program is so successful, we are now expanding it to include nickels.

 

 

Uncle Sam

 

pays 1.73 cents to manufacture a penny.

 

http://www.fourth-of-july-celebrations.com/html/uncle_sam.html

Thu, 28 Dec 2006

 

Intention != Result ??? (FAQ 12/24/06)

see Previous

Hi Ed,

Now I'm confused. So are you suggesting that, any time a child pleads for a toy, if I do not obey, then my action transfers a rock to him, and may set him up for a lifetime of sadness?!?

And what about the bigger picture? The fact that eventually the child does get his toy, and he's all happy about it. Can't I say, the intention to make the son happy manifests as the result in the end?

Thanks.

If your child asks you for a toy and you share your feelings about it with your child, openly and directly, he is not likely to take a Medicinal Rock.

 

In your description you "intentionally pretend to ignore my son's repeated plea"  and you also "act out as if I don't care at all."

 

If you withhold your feelings from your child and act capriciously and manipulatively, you may very well give him a Rock.

 

 

 

Pretending to Ignore Your Child

and Acting as if You Don't Care

 

can hurt as much as a fist.

 

 

 

Clip: www.helponechild.org/about/

gettinginvolved.html

Thu, 28 Dec 2006

 

Mystery Man in Leather Jacket (FAQ 11/10/06)

Hi Ed,

I am guessing the writer is referring to the picture you have on 11/5/05 ("Receiving an Angry Sender").

If that's the case, I have to say in some odd way, the guy in the leather jacket does resemble you somewhat, especially his eyes ... (just change the hairdo and get rid of the mustache ...)


-----

P.S.
Coincidentally, I'm actually the one who asked you about "Receiving Angry Sender" a year ago.

Thank you for the link.

Thu, 28 Dec 2006


Subject: Does Trend Following still work? Part IV

see previous


I have used the ... code which works great, though it is difficult to understand and does take some work, time and experimentation to figure out.

Ed said:

"If You Make It Simple Enough you can get a teenager to understand it."


"If you make it obscure enough you can get an adult to pretend he understands it."


And adult must be prepared to understand it too. One does not need a Ph. D to understand it, but one does need to put a lot of effort and to try out new things. A Ph. D degree can also help (unfortunately I do not have one, so it takes me a little longer to figure things out and I make more mistakes). I have determination instead to make up for the lack of education.

I believe that trading is virtually a zero sum game, almost everything one wins, somebody else loses so one does need an edge, badly! This was a serious study about changes that are happening in the markets in today's days, much more drastic then it happen in the last 50 years.

I don't know how or why "old trend following" is not working anymore. What I can say is: market is changing much more than it did. As I mentioned in the previous email, some of the oldest and most successful trend followers (eg: Bill Dunn and I would add John Henry to this list) have been in their worst drawdowns in 30 years which would also suggest that the markets have changed in some fundamental fashion. I have nothing against trend following at all.

I use "modern" trend following and counter-trend following systems that work, combined in a futures portfolio. I just don't agree when someone say that trend following is the same it was in the 80's, because it is not.

 

The market is not the same, the trends, returns, volatility are not the same. Breakouts are much more false than 20 years, moving averages are totally useless today also (linear methods no longer works today!). Market is not more difficult than it was (like Richard Dennis said), and never will be. It's simply different!

Below is a equity curve backtest of a trend following system (20-10 breakout system) without pyramid, trading 23 futures markets - 50 Dollar per Trade, 1%Risk. Do you think it will work again someday? Maybe it will, but trading this system is not for me. There are better things to use!

Could you post here (send me, or plot a equity curve chart) of daily backtest with equity returns from a purely and old-fashioned daily futures trend following system, since 1998-today?

I do not have any evidence that day-trading and short-term trend following works. 

 

To see the performance of a long-term trend following system, see the Donchian Study at the Chart Server link, above.

Thu, 28 Dec 2006

System Trade

 

Hi Ed!

Today I bought 4 contracts of Cocoa. Entry 890. SL 772. Total Risk: 472 {4*(890-772)} Euro. My system is now up and running. When my SL-risk decreases I will put on new trades so my total SL-risk always is between 40-50% of my total equity.

 

Can you suggest how to test this system more careful.

 

I'm not sure that my money management is optimal.

Hmmm ... you are risking 40-50% of your Equity on one trade.  Professional trend traders  typically risk around one percent as much as you risk.

 

You can test your system a couple ways.

 

1. You can back-test it on a computer and notice it goes broke on small whipsaws.

 

2. You can run it in real-time, as you are doing.  When you go broke, your test is complete.

 

 

Russian Roulette

 

and other high-risk games

 

produce lots of excitement

(that may medicate other feelings)

 

and deliver occassionally lethal results.

 

Clip: http://www.newprophecy.net/

Russian_roulette_1.jpg

Thu, 28 Dec 2006

 

Book #3
see previous

Dear Ed,

this is me again.

Actually wondering whether I use you as a pen-pal.

An enlightened follower of Osho named Ramateertha said to me: never do a therapy. I really have the ability to make a big thing out of anything and this "form" was in full bloom this night.

Today there is a sort of "show-down" with my boss. He set the date on December 22 and wow, you cannot imagine what ideas I developed on that up to now. Unfortunately, there is some reality to that, but I am not going to be killed as I realize now.

Now I am wondering whether it's really a good idea to set up a trading tribe with somebody who wants to day trade futures. Perhaps it is better to meet with some female friends like pictured on December 26. I think God will decide on this.

I am using you as a pen-pal.

And I am also very inspired by your approach to trading! This lift-idea in November helped me a lot to get out the losses out of the portfolio I made this year. And to jump in those bull-markets you have in Germany right now. I am happy that you cannot develop ideas on that.

I hope you have a nice week and which you a lot of inspiration and nice people on your workshop in January!

Thank you for sharing your process.

 

Day traders who attend Tribe meetings typically discover what they are really up to and give up day trading.

 

 

Thu, 28 Dec 2006

 

Book #2

see previous

Dear Ed,

just surfed your site during selecting stock ... and now I am really disappointed, that I was not included in your FAQ.

Hope that I didn't offend you or manipulate you.

As a matter of fact the discussion about friendship of Dec 26 is as inspiring as an actual comment to my letter.

And I love your wonderful collection of men and kids. Fred is sort of "eating" these pictures. I see them in my head like a slide from time to time. Seems to be a good food for the subconscious.

I also love this statement about Commitment. Helps me so much to deal with my doubts concerning my future after my office job ends. I want to trade half-time, the rest is still to be found. There are not very much people around who understand this idea. In [Country] it is much more common to work in the office from nine to five (or lately: ten in the night) as actual trade and do nothing (hopefully).

And I would be interested to have a family but being already forty-two this is probably more a dream as anything. Going out I meet all those guys who are married and stray around. The more I love the pictures of those other guys who love and take care of (their) kids as shown in FAQ lately.

Concerning tribe I mailed to a guy who has a family and want to day trade futures. I am glad that I gave up the idea to help him with that. This seems to be the ominous "Co-Dependency". Now I understand the concept.

And I am pondering, brooding and pouting as always concerning your non-answer. It's getting better now.

This is my status and I hope I didn't offend or manipulate you.

Kindest regards and a Happy New Year for you and your family.

Thank you for sharing your process. 

 

I update this site from time to time, rarely every day.

Wed, 27 Dec 2006

 

Having Fun Re-Connecting with Friends

Dear Ed,

this is the people who tried to order the BOOK!?!?! :-)))

Now I can laugh, but didn't when I seriously researched the BOOK "How to Win Friends & Assimilate People" for about three quarters of an hour!

This work gave me a serious AHA: my father always reading and being detached, me buying all those books, just trying them and then putting them aside. I already worked on this problem, but now I really recognize its full extent and consequences. Hope this speeds me up getting some books out of the flat.

Actually will keep the books of Pia Mellody somebody recommended to you. I get the impression that those healthy boundaries of the self are established automatically, when you get a new idea in the head. But CM also wants to know what's going on. That means reading most informative "Rocks" and Pia Mellody.

This is just the tip of the iceberg of the ideas I got. I had some time because a virus prevented me to visit my parents on Christmas Eve. Still wondering whether this was Fred creating or preventing drama ...

I used the time to call up all sorts of people and felt quite connected with relatives and friends despite being alone at Christmas Eve. Got the idea because of this "pouting inspiration" of yours: writing tons of Christmas Cards and calling up old friends I dumped after a dispute or they dumped me.

I was so astonished that all of them were quite pleased to hear of me and so was I.  I am still doing it and it is such a fun. Hope I stick to the new habit. It's such a pleasure.

A wonderful New Year to you and the Trading Tribe!

Thank you for sharing your process.

Wed, 27 Dec 2006

 

Pain


Ed Says:

 

Pain is any feeling you are unwilling to experience.

The physical sensation of pain may increase or diminish or move to a different location in your body, depending on how you hold it.

Developing willingness to experience feelings tends to convert pain to useful information, untie k-nots and to discharge obsessions.

The TTP processes can be painful or pleasurable depending on your degree of willingness to follow them.


Particularly, the pain I refer to, in my case, has to do with unwillingness of living with abandonment. I experience that trying to "force" situations might produce pain.

You might consider taking your feelings to your Tribe.

 

 

 

 

 

 

Feelings of Abandonment

in a K-not

 

can entrain curious drama

 

 

Clip: http://www.markstivers.com/cartoons/

Cartoons%202005/Stivers-7-11-05-

Abandonment.gif

Wed, 27 Dec 2006

 

Snapshot Process
 

Hi Ed,
 

do you still use the Snapshot process in the Incline Tribe?

Yes, we use the snapshot process as a way to support moving toward right livelihood.  If we encounter K-nots during the snapshot process, we identify the feelings and use them as entry points for the Rocks Process.

Wed, 27 Dec 2006

 

Wanting
 

Hi Ed,


I hope you are well.

 

In the document

http://www.seykota.com/tribe/

Rocks/2006_11_09_Tribe.doc


Ed Says: "We notice that the Issue Round elicits various forms of "Wanting" and that the feeling of wanting is a good indicator leading to some or another Rock."

To me this is a very important quote. I notice in my own life that certain areas in my life are full of wants, other areas are not. The areas where I don't recognize any wants tend to be much more successful. Especially my emotional reactions in the want-free areas seem to be less dramatic and much more beneficial to me. It seems in some areas "I want" in other areas "I do".

I notice in myself that "wanting something" usually indicates that I want to avoid something. I am feel that might be a personal bias I have.

Want has various meanings.

 

Lack: "For want of a nail, the shoe falls off."

 

Feeling of Desire: "I want the market to go up."

 

Where the feeling of wanting is in a K-not, the subject tends to engage drama that manifests lack.

 

 

 

Lack

 

can be part of a drama

that a person with a "wanting k-not"

naturally entrains.

 

Clip: www.pbase.com/terberg/image/53355852

Wed, 27 Dec 2006

 

Boltzmann #3

See Previous



Dear Ed,


Per your example of the CO2 cartridges. The assumption that there is a normal distribution inside each cartridge is my concern. There is no evidence, empirically or otherwise, that there is such a distribution.


There is no real experiment to verify a normal distribution exists inside the canisters. This is the crux of my question. Why assume a normal distribution, when there is no verifiable experiment, and logic dictates all particles revert to the same velocity at any time over the initial time?

I wonder what kind of logic dictates the particles must assume the same velocity.

 

I wonder if that same logic dictates that all hockey players must move at the same velocity.

 

 

The Hockey Players on a Team

 

have a distribution of velocities.

 

Clip: http://www.hockey-techniques.com/

Date: Wed, 27 Dec 2006

 

Mystery Man in Leather Jacket

 

Ed,


I saw a picture supposedly from your site while play the Google image game, of a guy holding up the apparent severed head of another guy. Is that you in the leather jacket and blue shirt ?

I do not know how to find a suppose picture.  Perhaps you can define the clip by specifying its date and title on this site.  FAQ clips carry an attribution line, so you can click to find the source.

 

Mystery Man

 

Yesterday, upon the stair

I see a man who isn't there.

He isn't there again, today.

Gee, I wish he'd go away.

 

 

Clip: http://psndealer.com/dealersite/images/

brocktoncycle/classic-leather-jacket-full.jpg

Wed, 27 Dec 2006

 

Does Human Contact Help People Live Longer?


Hi Ed,

 

My guess is this is why the tribe is effective.


From an Essay: Friends for Life: An Emerging Biology of Emotional Healing By DANIEL GOLEMAN
 

Article: http://www.nytimes.com/2006/10/10/health/

psychology/10essa.html?emc=eta1

 

excerpt:

 

The most significant finding was the discovery of “mirror neurons,” a widely dispersed class of brain cells that operate like neural WiFi. Mirror neurons track the emotional flow, movement and even intentions of the person we are with, and replicate this sensed state in our own brain by stirring in our brain the same areas active in the other person.

Mirror neurons offer a neural mechanism that explains emotional contagion, the tendency of one person to catch the feelings of another, particularly if strongly expressed. This brain-to-brain link may also account for feelings of rapport, which research finds depend in part on extremely rapid synchronization of people’s posture, vocal pacing and movements as they interact. In short, these brain cells seem to allow the interpersonal orchestration of shifts in physiology.

Thank you for the link.

 

Yes, Tribe members seem to develop deep caring about each other - and an uncanny ability to read each other's feelings.

 

An aspect of the Trading Tribe that does not appear in the human contact article is the Trading Tribe Philosophy that includes the Systems View, Fredian Psychology, the Rocks Process, keeping thought and language in the now and, by the way, avoiding the word, "why."

 

 

 

Friends

 

 

 

Aristotle (384-322 BC)

 

Aristotle Notices Three Bases

for Friendship

 

Utility:

people with various needs and resources

meet for mutually beneficial exchange.

 

Pleasure:

People meet to fulfill their

sensual and erotic desires.

 

Goodness:

People with strong and similar ethical values

meet to promote their own

 and each others' goodness.

 

Clips and Information:

www.infed.org/biblio/friendship.htm

http://www.bun.kyoto-u.ac.jp/phisci/Gallery/

aristotle.html

Tue, 26 Dec 2006

 

Boltzmann #2

see previous


Dear Ed,


Actually there is no experiment that can prove the distribution is true. How could a closed system with steady temperature have a normalized distribution of particle speeds? Wouldn't they all have to revert to one speed? Check out the so called experiments they have tried. They actually build the curve theory into the experiment so as to only come up with the answer. Similar to curve fitting a back test.

A CO2 cartridge holds a great many gas molecules, all moving in different directions at different velocities. The cartridge has a "steady" temperature that reflects the distribution of the velocities of the individual particles inside.

 

If you heat up the container, you change the distribution of velocities of the particles.

 

 

 

These CO2 Cartridges

 

both contain gas molecules

that have a distribution of velocities.

 

If you heat up the cartridge on the left,

the molecules inside it

assume a velocity distribution

that is different from the velocity distribution

of the molecules on the right.

 

Clip: http://georgegarnercyclery.com/

itemdetails.cfm?catalogId=39&id=2335

Tue, 26 Dec 2006


Ulcer Index


Dear Ed,

How do you calculate the ulcer index referenced on the Donchian page on Chart Server?

Thank you for the catch.  The ulcer index is an early and now dead-end experiment in formulating a mathematical measure of the difficulty in following a system. The remains of the experiment still show on the page.

 

"Difficulty" depends on the trader as well as on the system and on the markets, so the notion of a system-market-specific ulcer index has flaws.

 

Martin & McCann, in their book, The Investors Guide to Fidelity Funds, define Ulcer Performance Index (UPI) as a measure of downward volatility. 

 

UPI = (Return - RiskFreeReturn)/UlcerIndex

 

where

UlcerIndex = sqrt((r12 + r22  + ... + rN2 )/N)

 

where

ri = 100 * (pricei - MaxPrice)/MaxPrice

 

 

 

The Mountain Is Not Inherently Difficult

 

Climbing the mountain

may be difficult.

 

Clip: http://www.ksa-uk.co.uk/Aboutks.htm

Tue, 26 Dec 2006


Does Trend Following still work? Part III

Part 2


I'm saying trend following does not work anymore. I'm saying that "old trend following" does not work anymore.


The market is dynamic, and all this good strategies from the 80's and 90's are useless. You can't win everything you lost in just one big trend today. New approaches must be used to improve the trend following for today's markets.

Below are graphs of SP500 (Yahoo symbol ^GSPC) Prices and returns showing the structural breaks that were discovered.


It appears that the changes in mean were upwards!



I do not see how the graphs of S&P prices and returns speak to the issue of whether trend following works.  The S&P index seems to be in a long-term trend since 1975.

 

You might consider showing your work to a high-school student to see if it makes sense to him / her.

 

You might consider clarifying your ideas by writing about them in SVO-p.  Your sentence (left) does not define structural break, or tell who is doing the discovering or explain how he is doing it.

 

 

 

If You Make It Simple Enough

 

you can get a teenager to understand it.

 

If you make it obscure enough

you can get an adult

to pretend he understands it.

 

Clip: http://www.lendricklodge.com/

courses/teenage_Reiki_day.htm

Tue, 26 Dec 2006

Continuous Positive Changes

I am wishing you and your family a Merry Christmas.


I also wish that this approaching New Year is filled with health and prosperity for you and those close to you.

The continuous positive changes that occur in my life as a result of the wisdom you share is tremendous.

I feel empowered now because of what you teach. This is the greatest gift one gives, thank you.

Thank you for sharing your process.

Tue, 26 Dec 2006

 

Kaneohe Tribe

Respectfully requesting a membership into the Trading Tribe.

Attached is a completed application that was found on your website.

Thank you for considering my request.

Happy Holidays!

 

 

Welcome !

 

Kaneohe

 

Hawaii

 

Tue, 26 Dec 2006

 

Does Trend Following Work ? part 2

part 1

 

Some Questions that you didn't answer - Does trend following still work part II?

I agree with you about commitment following a system. But my systems are profitable, unlike the 80's trend following ones.

 

Give a try the turtle's system, you can try optimize everything looking in the past, and won't see any profits after 2k anymore.


Some strategies stop working after the NASDAQ bubble. The market is dynamic and it's always changing.


No static system goes beat the market forever, and this is fact. Adaptive methods, non linear elements and etc should be used. In today's days this dynamic market changes are much more faster than it was in the last 100 years.

1 - How do you see this market drastic changes in the last years and the game theory (that says nothing is in public domain will be useful to beat the game!)


2 - Being a trend follower, what do you think about statistical contrarian strategies?


3 - Do you still trading simple models that you did in the 80's ?

1. I do not see much in the way of "drastic changes."  The notions of going with the trend, riding winners, cutting losers and managing risk are certainly "public domain." These notions still work.  Every winning trade is, necessarily, going with the trend.  The problem with Trend Following systems lies in the difficulty in following them.

 

If you have any evidence of drastic change in any of the above you might consider sending it to FAQ.

 

2. Trend Followers do not think about statistical return-to-mean strategies. 

 

"Statistical" methods typically suffer from risk control issues.  Proponents are rarely able to produce any meaningful back-tests that show a portfolio with position entries and exits, margin-to-equity ratio, an equity line and return-to-drawdown ratio. 

 

If you have such a test for a simple statistical method, you might consider sending it to FAQ.

 

3. See #1, above.

 

4. Here's a contrarian strategy for you.  People tend to lose faith in Trend Following after a series of reversals / whipsaws.  One pretty good sign that trends are about to assert again is people (such as yourself) renouncing Trend Following on FAQ.

 

 

Remorse

 

One good way to justify remorse

is to renounce Trend Following

before a major move.

 

Clip: http://www.ladiesagainstfeminism.org/

articles/weepingwoman.jpg

Tue, 26 Dec 2006

 

Does Trend Following Work ?


Ed,


I'm a experienced futures quantitative trader. I use what a call "modern trend following" and mean reversion (counter trend) techniques to trade about 15 different futures, in a portfolio.


I'm not a trend following fanatic. I just trade what works.


I'm up 85% this year, with a -13% drawdown. I have no problem following a system, and have great knowledge about statistics, math and logic.
All my systems do walk forward optimization each N time. In my research, it's impossible a simple trend following system to work in today's days without non linear methods, like thresholds, profit targets (variable) and etc ...

Take a look at this Richard Dennis interview:


Q: How's the current trading environment compared with your high-profile days?

A: It's 10 times harder than it used to be. It should be. The market's job is to derail the systems traders. Some of them are going to make money, but that can't go on forever.

Q: Why not?

A: Because the market is changing more dramatically than it would have 15 or 20 years ago. I think that's because there are a lot more trend-followers involved in the market than before. It's a game where you're forever chasing your tail.

Q: Anticipation doesn't have a lot of place in the mechanical trading world, does it? The adage is that systems react rather than predict, and traders should have no input at all once they're beyond a certain stage.

A: There's something to be said for the dumb bunny approach of "I'm just looking at numbers." I've done my share of talking myself out of systems that would have worked for years. You pays your money and you takes your chances. But ideas help if you're thinking about what the market is likely to be like two years from now."

How do you see this market changes and the game theory (that says nothing is in public domain will be useful to beat the game!) What do you think about statistical contrarian strategies?

Unwavering commitment to following a  system is essential to making it work.

 

Those who do not keep their commitments seem to generate justifying beliefs, such as the idea that the market's job is to derail systems.

 

Such beliefs are consistent with the experience of  abandoning a system - right before it becomes profitable.

 

You might take your feelings about sticking to a system to a Tribe meeting.

 

 

 

A Strong Commitment to Following a System

 

serves Trend Traders

and Reversion Traders

alike.

 

 

Clip: http://www.earthart.org/membership/

images/commitment.gif

Tue, 26 Dec 2006

 

Radial momentum and the Coanda effect



I found your site on radial momentum thought provoking. I have no formal science education beyond high school, but have done some reading on various subjects just because it's interesting. I don't know calculus at all, anything in that vien is beyond me.

Lately I've been reading up on lift and the Bernoulli principle, the Coanda effect and the like. I find many of the explanations and assertions confusing, misleading, inadequate or sometimes incorrect in my estimation.

I've been doing some tests and experiments. Most based on the demonstrations suggested by sites, the water and can, railroad bottles, paper lift, ping-pong ball lift, etc. I've been making variations on them to see what the effects are and recorded my observations. I have drawn no definitive conclusions, but they suggest many of the phenomena attributed to the Bernoulli principle are from the Coanda effect and radial momentum.

I will not barrage you with them by email, I've done a few dozen and will be doing more. Still, I was hoping to get your reactions. It's easier to present them with pictures, but rather than put them in an email with attached gifs, I'd like to post them on my personal site with the art in place for easy reference. This would be a page without a link, not for public consumption. You can type or paste in the url I'll provide.

Would you be up for it?

OK. Bring it on.

 

 

 

 

Clip: http://jef.raskincenter.org/published/

coanda_effect.html

Sun, 24 Dec 2006

 

Is Growth Necessarily Painful ?



I have a question for you. With regard to the experience which the sender has during TTP or the Rocks process, do you think the process of "recovery", "growth" or "liberation" is inherently painful?

 

I mean, for me it looks like most emotional "k-nots" revolve around emotional wounds and the essence of TTP or Rocks process work is to continuously pull the sender back into contact with something they don't want to experience.

 

I remember you once wrote something about the sender's typical "meta-willingness". And if so, what about the Receiver's role? During the recovery process does he also experience pain, as if by empathy?

Pain is any feeling you are unwilling to experience.

 

The physical sensation of pain may increase or diminish or move to a different location in your body, depending on how you hold it.

 

Developing willingness to experience feelings tends to convert pain to useful information, untie k-nots and to discharge obsessions. 

 

The TTP processes can be painful or pleasurable depending on your degree of willingness to follow them.

 

 

 

Paying for Pain

 

People tend to seek out

and to entrain situations

 that justify their pain

(the feelings they have in k-nots.)

 

For example,

some people "get off"

by hiring professionals

to chain them by the neck

and puncture their nipples.

 

Clip: http://www.keytoxxx.com/gal/dominatrix/

data/dominatrix-dominatrix-sex-7.jpg

Sun, 24 Dec 2006

 

Intention != Result ???

Dear Ed,

I have been thinking about INTENTION=RESULT. Here's a scenario: let say I intentionally pretend to ignore my son's repeated plea to buy him a toy that he is dying for, because I plan to give it to him as a surprise after his exam when he is least expecting it. So, for weeks I act out as if I don't care at all.

If INTENTION=RESULTS, then the RESULT I am observing is that everyone (esp my son) would think that I am a terrible father who doesn't know or care about his son's burning wish. Yet my intention is precisely the opposite that I do care and I do know what's important to him, and that's why I am planning the surprise gift for him as a reward for his hard work for the school year.

So while we can all observe the same RESULT, does it mean that each person may draw a different conclusion on what the INTENTION really is?

Also, is it true that the real INTENTION is time-varying? During the weeks of pretending, people observing the result (son's disappointment) would think I am a father who doesn't care, and then in the end after I give the gift and they learn about my plan all along they look at the result (son's happy smile) and say I have a good intention.

Of course, the final result (everyone's happy) is what I have intended all along, but does it suggest that, at any now moment, I cannot just look at the current result snapshot and draw a conclusion on my intention? Interpreting the intention based on the results observed is only meaningful when the whole process is "finished"?

Thanks.

Your intention is to ignore your son's repeating pleadings - and to teach your son the notion that his father ignores his pleadings.

 

The pain your son feels during his pleadings and your rejections opens him up to accept the Rocks you are transferring to him.

 

This may set him up for a lifetime of sadness and disappointment.

 

You might check if you find such patterns familiar and if you can remember an important role model who may be the source of your own Rocks.

 

The Rocks Process intends to locate and remove Medicinal Rocks - and to replace them with Responsive Rocks - so you teach your children healthy patterns.  See more about Rocks at the link, above.

 

 

 

Disappointment is Hereditary

 

We pass it down

to our children

through our Rocks.

 

Clip: http://www.personal.psu.edu/users/

m/o/mol108/disappointment.JPG

Sun, 24 Dec 2006

 

Progress Report


Hi Ed,

I have many insights since the Workshop and Breathwork. I continue to think of my experience during the Breathwork almost on a daily basis and in some cases exhibit some of my Breathwork forms during my sleep, as reported by my partner.

 

The person I spoke to you about that I come into conflict so much and resembles my father is still part of my life. We have severe conflict during the past six months and don't allow myself to be pushed around anymore.

 

I now notice how similar he is to my father: aggressive, hard working, a successful entrepreneur and loves his family more than anything. Not bad and very similar to what I view as my right livelihood - perhaps we are too alike to work so close to each other.

 

I also come to the conclusion that having a father figure during early life is of utmost importance. I notice how much I miss my father and realize how much he really cared about his family, I feel guilty for having negative feelings in the past. I am now a bit closer to this person and able to receive him better than before and allow myself to learn and accept his views/concerns. He also values my opinion on work related matters and sees my point of view on many other topics.

My trading is choppy in the second half of the year and I have been stopped out of almost all trades since August, I re-enter some trades however get stopped out again - I don't always follow my plan. I feel like I am getting a new swing: a different way of viewing markets and approaching trades, tight stops and sticking to my initial plan - easier said than done. Developing a system is still high on my priorities and I go through the motions of testing a few simple systems, trying to reinvent the wheel (complex and impossible to follow) and back to simplicity. I am convinced after several months of testing that simple systems are easier to follow and yield higher returns over a time.

I am very determined to be your apprentice. Please let me know if I can call you to discuss, I am happy to provide more detail about myself or even visit IV to talk about this possibility.

I wish you and your family a Merry Christmas and a happy and healthy new year. Thank you for being a great teacher and for the guidance you provide to myself and many others through FAQ.

You might consider taking your feelings about your conflict to your Tribe.

 

 

 

K-notty Feelings

about Conflict and Authority

 

are likely to show up

as difficulty in following your system.

 

Clip: http://solvgud.blog.is/album/

Litli/image/32466/