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Ed Seykota's

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April 1 - 30, 2007

 

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Questions

(Quotes from Ed in Red)

Answers

Sat, 28 Apr 2007

 

Trading Book Encouragement


Hi Ed,

Can you please update the Donchian 6 Month Rule system back test on your charts server area? I hope all is well with your Trading Book project, I imagine writing a book is a rather taxing (and illuminating) experience; I look forward to it. Keep up the good work, you are a bright guiding light showing people how to be what they intend.

Thank you for your encouragement. I plan to update the Donchian page whenever I do it.

Fri, 27 Apr 2007

 

Mentor Stops Out

I once developed a friendship with a guitarist whose ability and talent I admired. Unfortunately the man died in his late 40's and I lost a friend and mentor. I haven't seen this months posting on FAQ, and I'm concerned about you.

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

 

 

Evidently, We Are All Still Alive.

 

and intending to die.

 

 

Clip: http://www.istrosystem.sk/

Fri, 27 Apr 2007


For Whom is This Site


I just discovered your site. (I actually felt sad reading through the pages) I'm off to find your book. Is your site only for those who are established traders or for those who are learning and beginning a new journey in trading?

It's for you.

Thu, 26 Apr 2007

 

Trading Targets and Blow Outs

see previous: Addiction


Hi Ed

My trading target is 200 pips per month net of costs so I fall short mainly due to two separate ‘blow outs’. Had those been contained to my ‘normal’ loss parameters I would have met my target. This reinforces in me that stops must be obeyed. I am yet to write down exactly what my system is.

Once again I see bigger trends are where the fortunes are made.

The trend is my friend, but which one I wonder. One is going to be a truer friend than the other; something has to give.

Trading targets are incongruent with Trend Trading.

 

Trading targets are congruent with blow outs.

 

 

 

Using Trading Targets

 

can turn you into one.

 

Clip: http://www.politicsforum.org/images/

flame_warriors/flame_67.php

Thu, 26 Apr 2007

 

If I had the Money

How much would it cost me, if I had the money (^_^), to learn how to trade directly from Ed Seykota? :)

It would likely cost you less than continuing to trade without (1) a plan and (2) the willingness to stay with your plan.

Wed, 25 Apr 2007

 

Pullback: Sees Run to 40

see previous: Buying Panic

Even after the pull-back I still have a double in [Stock]. It's received a couple of downgrades on valuation recently - it looks to me like its setting up for a run to 40. I may add more when it breaks out from the current pattern.

Thank you for continuing to report your trades and feelings in real-time.

 

 

Circle Indicates Date of Writing to FAQ

Looking for an advance to 40.

 

 

Tue, 24 Apr 2007

 

TTP matches Jung's perspective

Hi,

"The foundation of all mental illness is the avoidance of legitimate suffering."


-- Carl Jung

TTP encourages one to completely experience the feeling / suffering, and as such moves one away from illness. This certainly fits well with my experience of it.

Thank you for sharing your insights.



 

Carl Gustaf Jung (1875-1961)
 

Swiss Psychologist Carl G. Jung is one of the founders of modern psychoanalytic theory.

 

His discoveries include the collective unconscious, archetypes, psychological types, active imagination, synchronicity and individuation.

 

His particular gifts include facile interpretation of religious and parapsychological phenomena, dreams, myths and symbols.

 

Clip: http://skywalker.cochise.edu/vondesti/jung.htm

Mon, 23 Apr 2007

 

Breathwork


Hi Ed Seykota,

I was struggling with Trading Psychology and came across your site. I am intrigued. Breathwork and Trading, an interesting dynamic. I did several ‘Holotropic Breathwork’ sessions back in the day, it looks like you are using a slightly different approach.

 

Can you clarify the difference between your approach and the Grof Holotropic approach?

What would be required for me to start a group in the [City] area? Or, perhaps there are some practitioners here already that you could put me in contact with?

I conduct occasional Breathwork Weekends for people who are active in the work. I do not publish instructions.

 

See the Tribe Directory link above for more information.

Mon, 23 Apr 2007

 

No Tribe Here


Hi Ed,


I'm willing to join the Trading Tribe but there’s none local here in [City].

See Tribe Directory above for information of starting a Tribe in your area.

Sat, 21 Apr 2007

 

Changes in the Market
 

Dear Mr. Seykota,

After reading Mr. Schwager's interview with you in Market Wizards, I have been inspired to build my own computerized trading system. Since this book was published in 1989, I am interested if any significant changes in the market have decreased the viability of a trading system, and if such an endeavor on my part would still be worthwhile.

 

Moreover, I have VERY limited experience in computer programming and would like to know what areas of this field you think would be most pertinent for me to study or what books I may find most useful.

These days, I notice the markets go up and down in different ways.  I notice the same thing in 1989.

 

If you wish to trade for a living you might consider studying yourself.

 

 

 

Self Inspection Device

 

Another good one

is your Tribe.

 

 

Clip: http://www.gutenberg.org/files/

15460/15460-h/15460-h.htm

Fri, 20 Apr 2007

 

Tribe Status Update

Hello Ed,


Thanks largely to the fact that the entire Tribe attends the Cambridge Workshop last July, all of us with the exception of the recent new member feel on par with each other as regards our understanding of TTP. Since each of us experiences TTP and Hot Seats at the hands of its creator, there is very little of the “transmission loss” that might be a feature of our pre-Cambridge sessions. For that, our Leader feels grateful to the entire Tribe. (Prior to July 2006, he is the only Workshop graduate in our Tribe.)

During our last Tribe meeting (March 28, 2007), we discuss some of the issues that our Tribe is experiencing.

(1) We all feel that the Tribe is an excellent support-group. It helps us all in our professional, and in our personal lives. Hot Seat sessions help us to feel our feelings, and experience and understand their positive intentions.

 

(2) However, some of us now feel we are slipping into a “comfort zone”. This has us wondering if we all now have a stake in each others’ dysfunctions.

 

(3) Some of us are experiencing a feeling of being “stuck” – that we are not moving forward. This is an issue that some of us express a desire to take to
the Hot Seat.

Ed – the IV Tribe that you start has been around many years. I am sure your Tribe experiences some of what the [we are] now experiencing, that we just describe.

In the Incline Tribe we use the Snapshot Process to locate issues standing between us and full participation in life.

 

We then develop the associating forms and take them into the Rocks Process.

 

If you feel "stuck" you might consider developing the forms that associate with that feeling.

 

As Workshop Graduates, you are welcome to attend Tribe Meetings at Incline Village, NV and/or Austin TX.

 

Both these Tribes are pretty good at helping each other to locate issues and to replace medication with activation.

 

 

 

You Can Use TTP to Self-Medicate ...

 

 

 

or to Activate!

 

Clips:

http://www.desiredcreations.com/images/

furbabyPics/brandySlumber3.jpg

http://www.rutahsa.com/Ric-Jump.jpg

Thu, 19 Apr 2007

 

Wants a Tribe


Hi,

I am interested in trading but realize I need a mentor or at least have people to bounce ideas off of in my own search for the "aha".

 

I tried contacting a tribe in [City]. The guy, says they no longer meet. Is there any online place to participate beyond the FAQ, ie: a forum, chat area, etc? If not, I really believe [City] needs some sort of Tribe set up as I am sure there are other folks with similar desires to mine. Is there any other way for someone that is not near a tribe to correspond with Ed and other tribe leaders on an ongoing basis? I really am looking just for sign posts to help point me in the right direction ...
 

See the Tribe Directory link above for information on starting a Tribe in your area.

Mon, 16 Apr 2007

 

Buying Panic ?

see previous: Copper Top



Ed,

I've been looking to double up on [stock]; It looks like the market does it for me. :-)

Thank you for reporting your trades and feelings in real-time.

 

 

 

The Circle Indicates the Double-Up Point

 

 

 

Mon, 16 Apr 2007

 

Leadership



Dear Mr. Ed Seykota

Thanks for the Trading Tribe, what a great forum to form a Fellowship. We sit in ring formation and support one another.

 

I have found my personal metaphor for trading and my life in general. I have for many years been overwhelmed by the Lord of the Rings trilogy. Only recently have I been able to recognize it's meaning to me as a metaphor representing my life and trading.

 

Up until my last TT meeting I only considered the Fellowship of the ring to represent a fellowship of my psychic parts, at times congruent and aiming for the same goal, but certainly not always. However I now understand that I can progress far more effectively with the aid of an external fellowship, my new tribe.

Only at my last TT meeting, my fifth meeting, did I stand out of my own way and allowed my feelings to communicate directly. I believe my courage came about from seeing our TT leader at the previous meeting take the hot seat.

What an experience, as the forms I displayed became apparent to other tribe members, they encouraged my forms to evolve and take on a life of their own. With-in a very short space of time I was transported to a different place and time. A vivid recollection of a very young childhood experience which on reflection explains my frequent childlike behavior in the markets (even though I am almost 50).

 

I now feel that certain events occur in trading, and probably life in general, which instantaneously journey me back to a particular childlike state and it is from there I too frequently operate.
 

As I found the experience emotionally draining I could not continuously sustain the hot seat forms for very long. I know I have much more work to do in this particular direction as new forms were just beginning to emerge.

One thing I did note whilst in the hot seat, when I was in a trance like state most of the words spoken by the other members did not consciously register. But what did come across very powerfully was their encouraging and supportive tone.

Thanking you big chief and my TT for giving me an opportunity to finally begin maturing into an independent adult that does not live and react from his past.

Thank you for sharing your process and for illustrating the importance of the Tribe Leader getting on the hot seat.

 

 

 

In TTP and in Life

 

The leader sets the pace.

 

http://www.poster.net/anonymous/anonymous-leadership-5000373.jpg

Fri, 13 Apr 2007

 

Data Issue : Spin-Off Adjustment


Here is an example of a serious problem with back-testing stock trading systems.

 

The first chart is a snap-shot from 4/12/2007 at 6:46 p.m.

 

The second chart is a snapshot of the same stock taken after 8pm on the same day.

 

The reason for the discrepancy is the data service finally adjusts the prices for the KFT spin-off. On the new chart my system issues a buy signal on 3/30/2007. However, the chart that is actually available to me prior to 4/13/2007 shows a set-up with no trigger.

 

This problem is not unique to Fidelity. Worden has exactly the same problem. It shows an incorrectly adjusted chart until the evening of 4/12/2007. In this case CSI has it right on the day of the spin-off. This one missed signal could pay for the CSI subscription. I know of other cases in which CSI gets it wrong and Worden gets it right.

 

It seems that if you are serious about systematic trading you might want to have a couple of data sources and spend some time to reconcile differences in the stocks in your interest list.

 

Thank you for sharing your insight and for the stunning graphical presentation.

 

 

6:46 PM

Before spin-off adjustment.

 

 

 

8:00 PM

After spin-off adjustment.

 

 

Fri, 13 Apr 2007

 

Pre-Label Rocks Process, part 2

see: previous

Hi Ed!

The feedback you sent us regarding our Rocks-process was quite negative. You changed our headline from "Rocks Process" into "Dim Rocks Process" and seemed to condemn the whole process. We thought it was a very positive experience!

As I understood it we were meant to squeeze certain feelings into rocks from different situations in life, especially those filled with drama or pain. The next step was to label the rocks and then bring them to the tribe hot seat. It seems we were not supposed to label them ourselves. Ok, that seems to be like Dim-behavior but that was unclear.

One other difference I recognized from other tribes was that they usually come up with a hole lot of alternative responses and we only came up with a few and picked one as the resources rock. Now I understand the resources rock should include a basket full of opportunities as responses. First I thought it should be similar to trading - you choose the best model and stick to it. Here it seems you want as many alternatives as possible instead. Do you think the role playing should include all of them?

We have planned to have a new Rocks-process next week. We intend to integrate the suggestions you made and hope that you will approve of our approach this time.

Process:
1. Drumming
2. Check in
3. Hot seat
4. Rocks Process with role playing
5. Snapshot


How do you suggest we approach the rocks-process? Is it in line with your view to bring up a scenario
you're not satisfied with, and then get help with
alternative responses?

Thank you for the feedback. The title now stands as "Pre-Label Rocks Process."

 

You might consider charging the Action Rock with forms, rather than with concepts.

 

You might consider taking your need for approval into the process as an entry point.

 

 

 

People Who Need Approval

 

sometimes sell out for medication

such as a certifciate

 

rather than deal with

the underlying issue.

 

Clip: http://www.primarygames.com/holidays/

fathersday/certificate.htm

Wed, 11 Apr 2007

 

The Copper Top

see previous: Net Cost


Ed,

I am long July copper at 348.15 for a few days now. I am bullish for at least 50 cents now. I find it extremely hard to follow my system and stay out of this move. Every cent higher is one cent closer to The top. Now that I am in, I also find it extremely hard to follow my system and not book a quick profit. I have to fight the urge to sell out and declare victory. Taking a quick profit is completely contrary to the extremely long term nature of my entry.

I'm reframing what it means to be right. Regardless of the P&L, I am right if and only if I am long at the high print. In effect, I'm changing my fear of getting in at the top to fear of not being in at the top. I don't know if today is the top, I do know that I am long when the top occurs.

My risk is under control and the long term trend is up, so I take a breath, go work on a quicker entry for my system, and let the market work, come what
may.

Bull markets have the top, over and over again.

 

You might consider investigating and embracing both fears, rather than deciding to change one into the other.

 

 

 

 

 

Therapy for Top and Bottom Pickers.

 

1. Pick a top from the upper panel.

2. Pick a bottom from the lower panel.

3. Repeat 1 & 2 until boredom sets in.

4. Follow your system.

 

Clips:

http://www.entertainmentcaterers.com/

images/swimsuits.jpg

http://summitbikinis.com/

Wed, 11 Apr 2007

 

Goal of Meditation =  Better Trading
 

Dear Mr. Seykota,

I just finished reading Jack Schwager's interview with you as chronicled in Market Wizards. I was struck by the purity of your outlook as compared to the other traders so far. I myself am hobbled by chronic diffidence because, being deeply interested in Zen meditation, I often second-guess my decisions because I am afraid my ego may be playing tricks on me, that I am deceiving myself, an instance of mauvais foi or "self-deception," a principle from Nietzche.

 

I endeavor to continue my meditation to root out emotional complexes, so that I can trade with rationality and with great disciple, what Andrew Beyer likens to the "professional horseplayer," one who trades dispassionately and patiently, waiting for prime bets and not throwing money into the atmosphere in order to get high on gambling. This is self-destructive behavior, an observation which you make in the interview, about trading for "excitement." This is not me, at least I do not want it to be.

I am writing because you are an inspiration for someone who concurs with many of your ideas while still wanting to be a successful trader, in order to give back to a society that needs healing.

Meditation that has a purpose, ain't.

 

Your syntax variously indicates the causal model. 

 

 

 

Mushotoku

 

without desire for gain or profit,

without any goal.

 

Clip: http://www.yakrider.com/Meditation.htm

Mon, 9 Apr 2007

 

The Net Cost of Being Right

Ed writes: You might consider taking a look at the relative importance to you of making money and being right. You might consider asking how wrong you are "being right" now.

OK. You are correct in your assessment that being right is very important to me. I wonder how I am always able to cut my losses short. When I look at my open positions I notice that all but one are profitable and as a group they show an average gain of 17.14% for the year. When I look at my closed positions for this year I notice that the vast majority of them are losers. When I look at my account balance I notice that it's up significantly more than the S&P 500. I also notice that shorting index futures at various times reduces the volatility of the equity curve without much effect on the total profits. The weight of the evidence suggest to me that at least right now I'm not letting my need to be right interfere with making money.

I recall that this is not always the case. I remember many painful instances of selling out winners during the first significant retracement and watching them go on to new highs without me. I recall one particular stock gains 100% in a month and I still lose money trading it from the long side by panic buying the highs, and panic selling the lows all the way up.

 

I don't like to be right about a stock and not make big money. It's incredibly painful to be right about a stock and lose big money.

BTW, My 8 year old son makes 45% on his (small and growing) stock account in the past month! Today we take some profits so he can buy a video game console. I could learn a lot from him about making money and spending it on things I enjoy.

Thank you for sharing your process.

 

Panic may be a self-protection response to elevation of blood CO2 level.

 

You might consider noticing your forms during your "panic" buying and selling episodes.  You can take these to your Tribe as entry points.

 

 

 

The Traditional "Remedy"

for a hyperventilation a Panic Attack

 

is to give the subject

a paper bag and to tell him

to breathe in and out of it.

 

This remedy may

prolong the attack.

 

 

- - - - -

 

 

 

 

Panic Key on Trader Console

 

always makes the right move

when you press it.

 

 

 

Clips & Information:

http://www.cumc.columbia.edu/news/journal/

journal-o/archives/jour_v19no1/theories.html

http://www.panicbuttons.com/about.html

Sun, 8 Apr 2007

 

Shift Happens


This is fascinating, well worth the time to view even if your don't agree. Pretty interesting ... or scary ... or both!

http://www.glumbert.com/media/shift 

OK.

Sun, 8 Apr 2007


Taking Delivery

We would like to welcome our daughter as a new addition to our Family.

After 50+ hours of labor my wife delivered on (Good)
Friday at about 3pm. Our daughter  is 7 lbs 11 ounces and in good health.
 



Love,

Congratulations on expanding your essential Tribe - and for getting your wife to do most of the work.

Sat, 7 Apr 2007

 

Dramatic Improvement in Relationships

Greeting! I have my visual C# book in front of me right now. As I started studying, I lost focus a bit and suddenly I wanted to write you an email before I study hard right after I finished this letter. Walking my talk is my focus so I be brief and get back to studying again.

We had a great TTP meeting last week. Big Aha's. Most grateful Aha, for some reason I was gravitated toward reading, understanding, and accepting Borderline-Fractal Poem. I thank you for posting wonderful Poem.

 

Tremendous Joy every day for me right now. I am tasting Freedom first time in decade. Dramatic improvement in relationships at work and friends. Amazingly, friends, colleagues and I are showing willingness to change to achieve and experience harmony ever since I got involved in the Associates Program.

Thank you for everything. When you get a chance please update the tribe directory, we lost one member however 3 are going strong and willing.

Take care we love you very much.

Thank you for sharing your process.

 

 

 

Here's Proof

 

you can live in harmony

with seventeen other people

without getting very high.

 

Clip: http://www.lukemelia.com/blog/

archives/2005/10/

Wed, 4 Apr 2007

 

Angry



Hello Ed,

Some time has passed since I first wrote to you. I have become a better trader and I very much enjoy reading FAQ from time to time. I wish that my commitment to TTP will grow. Thank you for what I already learned from you.

In the Feb-FAQ I read a comment of a contributor that he is completely sold on trend following. This evokes a very strong feeling in me:

 

I am angry that I am not completely sold on trend following! I am also angry about going long a trending market, building a pyramid with low risk, having an idea for the exit and then changing that idea when resistance appears. I am angry that when the trend continues and breaks the resistance I don't have the balls to reenter my position.

 

I somehow seem to have lost the will to be in the market and consequently to make any money.

It feels good to report these feelings. I feel the positive intention. I know it will be hard to change.

You might consider investigating the premise that your anger relating to trading is functional as medication for deeper feelings you are unwilling to address.

 

 

 

Anger

 

can medicate

deeper issues.

 

Clip: http://cakedonstripes.libsyn.com/

index.php?post_id=139754 

Tue, 3 Apr 2007

 

Wants to buy Gold


Ed,

 

Want to lend me some money? There is some gold I’d like to buy.




 

I wonder how much is some,  what rate of interest, what collateral and what percent of the proceeds over and above interest you offer.

 

 

Golden Gate Bridge, San  Francisco

 

Some people view gold

as a bridge

as well as an investment.

 

Clip: http://www.sftravel.com/goldengatebridge.html

Mon, 2 Apr 2007

 

Rocks Resources


Hi Ed,


I notice that the 'Rocks' page of the TT website no longer contains any links to references, resources and case studies.


Is there a reason for their removal ? (Perhaps the Rocks material progresses forward to such a degree that it renders the older material and the older case studies obsolete) . . . . . . . . . or has the Rocks material simply found for itself a new home somewhere else on your website (which i am unable to find).


If the latter, could you please advise on the location/link

Thanks kindly,

See Rocks, Wed, 21 Mar 2007