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April 1 - 14, 2008


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Note: The intention of inclusion of charts in FAQ is to illustrate trading principles - The appearance of a chart does not imply any kind of indication or recommendation to buy, sell, hold or stay out of any positions.



(Quotes from Ed in Red)


Mon, 14 Apr 2008


Theory of Magazine Covers

Hi Ed,

Reading about the meaning of magazine covers I see no way to translate it in computer code, so I wonder if this introduce a discretionary element in a trading system. Could you clarify?

Thank you.

I know of longitudinal studies in which researchers attempt to quantify text articles by word search and word frequency algorithms - and then correlate this information with the phase of long-term stock market cycles.  One complexity with this approach is that over this duration, the meanings of words change and stylistic preferences for employing specific words change.


The only methods I know to assess the emotional content of covers employs people to experience the covers and report out their feelings.


Trading is essentially discretionary; it rests on many discretionary preferences such as about whether or not to trade, how to trade and what to trade.


You might consider taking your feelings about <discretion and discipline> to Tribe.

















Discipline may be a matter

of different strokes

for different folks.



Clips: http://etc.usf.edu/clipart 






Mon, 14 Apr 2008


Notes on Rocks Process

Hi Ed-

Thank you for your generous help at our meeting last week.

I am amazed how much better I feel and how skillfully you applied the TT concepts within the flow of conversation.

Here’s my notes:

I arrive with motivation to take my psychological development to the next level and quite frankly wondering what exactly that means!

I give my best guess and state my issue as lapses in self-discipline, with examples in over-eating and over-trading.

Ed asserts that these are all solutions -- ways of distracting myself from problems that likely exist in the core areas of living: work, love, play.

He asks if I am willing to work on the underlying issues instead and I say yes.

We discuss my long-distance relationship with <Significant Other> – looking for drama sources.

I describe how the relationship works well now, even long-distance, and I report uneasiness on the topic of ever finding a way of living together with <SO>, especially since I vividly recall a time when I gave signals that I would move with <SO> to <city> but then didn’t. We went looking at houses and I got immersed in picking out kitchen tile before deciding that I didn’t want to live there year round. <SO> now owns a house there and I am ensconced on the other coast, but I feel this living together issue is unresolved.

Ed asks me to role play with < Tribe Member> about telling <SO> how I feel.

< Tribe Member> does a superb job of drawing me into being me.

Ed “catches me” repeatedly trying to push the decision onto <SO> and asks me to really get into that feeling.

I do and describe a bowling-ball feeling in my stomach and a wall in front of my face.

Ed asks me to remember other times in my life when I’ve felt this way faced with a decision.

I describe several and Ed focuses on the earliest, which involves a decision between public or private school.

Ed asks if I can recall an early role model for this behavior

I pick my mother, who I recall pushing the decisions onto my father and then punishing him for making the wrong one.

Ed jokes that I learned both roles, which is true: I try to push the decision onto someone else but if I must decide myself, I punish myself for the wrong choice!

We go through the Rocks Process which I think amounts to two parts:

Coaching me to use more constructive resources, complete with role play for practice

Rock ceremonial ritual to help emotionally give up the old behaviors and embrace the new

My new list of resources from the meeting is:

Gather information

Use another person as a sounding board

Get a mentor

Choose “no choice now”

Breathe, smile, wait for a good idea

Pace the other person


We check out, and formally end the session.

I immediately feel lighter and happier.

I recognize decision-making as an area of my life that needs improvement and I’m happy to have support in doing that.

Back with <SO>, who is traveling with me this month, I feel more loving, and am happy just to look at <SO> without feeling the ol’ bowling ball thing.

During some time alone, I think through our situation and come to the decision that this isn’t the time to figure out how we live together.

Our present arrangement is great for now, and when circumstances change we can then change to the next arrangement.

I wait for the right setting – Sat night togetherness on the couch – and bring up the topic.

I say I love <SO>, value our relationship, and realize this isn’t the time to figure out how we live together.

<SO> agrees and the conversation moves on.

Now to attend to a few other areas of my life in need of proactive decisions by me.

I’m eager to test this out when my decision leads to committed action too.

Thanks again!

Thank you for sharing your process.

Mon, 14 Apr 2008


The Whipsaw Song - YouTube Comments


I have been a trend follower for a while now and as you know its always an ongoing battle to "follow the rules" and now I use this video every morning to reinforce the essentials. Great job guys!


Thanks for the tune and the artful way of presenting the Essentials.


A very nice tune! You seem to have lots of fun !
I like your solo playing after each verse.


Great song! May we be with the trend ...


Nice job Ed.


Great music and solid advice. :)


You are a Ledge ... er ... I don't know how you do it !


Congratulations on achieving your target weight. Great song and message !


What a peppy, cheerful tune...
(it's a toe-tapper)
and a great message, too.
Good job, gentlemen!


It needs lyrics with a bouncing ball...so we can all sing along. 8)




I love this song sir. Please put up more videos on emotions and how to overcome it. and interview would be nice. but talks on trend trading will suffice. more power to the trading tribe.

A beautiful song.

Thank you for your support.

Mon, 14 Apr 2008


Healthy Look



I saw you on YOU TUBE - looks like you've lost a few pounds.

Keep up the good work.


Are you still struggling with weight loss?

I did all through my twenties.

I got up to about 250 lbs. I now go about 210 lbs.I'm still 10 lbs too heavy.

Diet and exercise are the key. But of course you already know that.

There are some secrets.

Breakfast like a king.
Lunch like a prince.
Dinner like a pauper.

Cut out butter etc

Obviously breakfast shouldn't be 6 eggs and 1lb of bacon, but bacon and eggs are OK if that's OK with your cholesterol levels.

Lunch is normal [healthy] meat and vegetables or similar and then just fruit for dinner. A lot of chopped fruit. This is tough if you like cocktails or if you eat dinner out a lot.

You need a walking - running machine for minimal compression of joints, a stationary bike with moving handle bars and a large mirror.

After stretching Achilles tendons, calf's, hamstrings, thighs and groin. Loosening hips neck and shoulders you start with 1 minute of exercise a day. This is very important, this is the key. After 1 week you go to 2 minutes per day and only ever increase by 1 minute each week. In 30 weeks time you will be getting fit and the body will never have had a shock. You'll probably feel great. If you turn sideways we wont see you !!

This works and its doable.

It may just be worth a try!

Thank you for sharing your process.

Sun, 13 Apr 2008


Whipsaw Fun



Congratulations on completing the whipsaw song and getting it out where people can share it. I was thrilled to see that all of you seem to be enjoying

Thank you for your support.

Sun, 13 Apr 2008


Happy New Year

May 5110 be as good as 5109!





Sun, 13 Apr 2008


Wants to Trade Magazine Covers

see Previous

Hey Ed,

From the "Magazine Covers" FAQ sent to you on Wed, 11 APR 2008. I think I am going to watch and maybe play some ethanol and uranium stocks if they turn just in case. CCJ is clean energy and may be turning. Maybe AVR and VSE for the ethanol but they are not turning yet.

One theory of magazine covers is that they signal the arrival of public awareness - and with it, choppy markets and high volatility.


In that case, you might consider that lightening up on existing positions could be less risky than entering new ones or adding on.


You might consider taking your feelings of <wanting to be a hero> to Tribe. 




Heroic Riders


Sometimes they get

to pick the girls


Sometimes they get

to pick pieces of coral

out of their butts.



Clip: http://www.surftravelcompany.com/

Sun, 13 Apr 2008


Feeling the Phoenix

see Previous

Mr. Seykota,

Thank you for your response. I notice, though not with "real" money, an uneasiness in my gut when looking at the daily equity balance of the phoenix system run.


I intend to follow a long term trend following system including staying in the game long term!


I notice the psychological departure from the mathematical shows me that successful money making trading involves discipline, experience feelings, passion, and following your "essentials."



Sat, 12 Apr 2008


Rocks Process


I notice the Rock process requires a Tribe and also very skillful practitioners, plus willingness. Do you think there are other ways in which this process of cure happens spontaneously, such as a loving relationship, good recreation, dance, religion, recovery groups, etc.?

The Rocks Process is an attempt to structure the process of replacing addictive behavior with pro-active behavior.


In Tribe work, the Rocks Process serves as a learning tool, assisting people in experiencing the dynamics and intentions of addiction.


Like training wheels, its intention is to disappear as a passing AHA as the associating learnings integrate naturally into the process of life.


As with other growth vehicles that you mention, such as relationship, recreation, dance, religion and recovery groups, people can also press TTP into service addictively - and use it to prevent realizing right-livelihood.




The Rocks Process is a Tool


for replacing addiction with pro-action.


Without a commitment

to right-livelihood

vehicles for personal growth

can be like training wheels

without a bicycle.



Clip: http://tnx.nl/php

Sat, 12 Apr 2008

Feelings and Disease - Three Actual Cases

Dear Mr. Seykota,

thank you very much for The Whipsaw Song. I enjoy it a lot.

On April 4 you mention that TTP is largely empirical and its evolution relies on such first-hand reports.

I can contribute with three reports. As you know, I am not a psychotherapist; hence, I am not trying to make popular any therapy method, but to open my observations to discussion.

1. Young female swimmer, consults on Wednesday with a bronchial infection (cough, fever). She is familiar with the role of emotions in causing diseases and is open to a discussion of her problem. We look for the "trigger" and find that she has a race on Saturday; she mentions that she is afraid of disappointing her coach. She accepts her performance, good or less good, and sees that her disease is a resource to excuse a bad performance. Fever and cough resolve spontaneously within 30 minutes.

2. Female, 50 years, consults with severe shoulder pain. Pain has been present for 3 days; she remembers a discussion with her husband few days ago. When I ask her about her feelings / sensations during the discussion, she mentions that she felt an urge to hit her husband, what she did not do. We talk about her love for his husband and the futility of developing pain instead of communicating her feelings / opinion to her husband. The pain resolves spontaneously within 30 minutes.

3. A young runner consults with sore throat and fever. He is acquainted with the relationship of mind and body in diseases and, when asked about the "trigger" or context of the problem he remembers to be very angry to her sister and not telling her about it. Shortly after our talk he tells her about the problem and communicates her his feelings. Fever and pain resolve spontaneously within 1 hour, he can reassume his training the same day.

The cases are real. The spontaneous resolution of symptoms within a short time is real too. The association can be explained as spontaneous healing, good luck, or coincidence.


However, I sustain that there are no coincidences and luck is just another word for intention. Patients can use diseases as entry points to identify, sometimes resolve, a conflict.

I would really appreciate if you could comment these observations from the point of view of TTP.

Sincerely yours,

Thank you for your email presenting some actual cases of treating disease by experiencing feelings. 


I support you in continuing to find ways to enhance right-livelihood without resorting to pharmacological remedies.


Your work triggers some of my own recollections and, yes, I can comment from the TTP point of view.


In TTP we hold that people generate emotions in response to situations and that these emotions, in turn, motivate responses. 


Situation --> Emotion --> Response


We may not be consciously aware of our emotions; we are mostly aware of our associating feelings; others may notice our associating affects.


Our emotions trigger responses on a deep, automatic level.  We touch something hot and we remove our hand, even before we become aware of the situation.  We smell chlorine and we think of going swimming in a pool.  We have feelings about our performance and we develop a cough.



Situation --> Emotion --> Response

^             ^           |

|             |           |

\<-------- Action --------/



Some of our responses are pro-active and contribute toward right livelihood; these responses tend to operate on the situation motivating the emotion, thus closing the loop;  others responses are medicinal and act to sedate the feeling; they prevent the emotion from effecting a pro-active situational response.


I call these various emotional response patterns Resources and I call the set of resources that respond to a particular emotion a Rock.


In the TTP Rocks process, we survey the Rock, identifying its emotional location and its catalog of resources and we locate an historical critical event memory in which a Rock Donor (typically a parent) presents the Rock to the client. 


If the client appears with a "problem" or "addiction," we typically discover medicinal responses in the Rock that mirror the family pattern of dealing with similar stress.


We rarely view the the medicinal patterns, or addictions, as problems that we need to fix.  Indeed, we view them the same way the client views them, as solutions.  The medicinal pattern is typically the solution to the problem of making the "bad" feelings go away.


We begin by acknowledging the positive intention of the Medicinal Rock and then we go on to create a new Rock that supplements the medicinal responses with pro-active responses.


We then access the emotional location of the Rock by re-enacting the client's memory of the presentation of the Rock.  The client then has an opportunity to refuse the Rock (forgive it, not the donor) and to accept the new Pro-Active Rock.  This tends to implement the learning in the emotional body, as well as in the logical mind.


As this process progresses, we test frequently for client willingness to progress, and we rely on the client to motivate this process, so the Tribe does not move into trying to "fix" the client.


The Tribe serves as a context in which the client can do his own work at his own speed.


The interventions you cite seem consistent with my experience of  "brief therapy" and may be quite effective, particularly in the short run, for generating a "miracle cure."  In effect you are assisting the client to experience and to disappear medicinal response patterns.


Perhaps the miracle cure works and that is the end of it.


However, you might consider following up with your clients to determine if they are now generating any substitute medicinal dramas to replace the original dramas.


For example, unless the girl with the cough develops deep automatic pro-active response patterns to her emotions about <disappointing others> she may come up with alternative medicinal responses such as <other type of disabling injury>.


You might also note that while the original drama,  <having a cough>, aims to medicate <disappointment> it also tends to hamper performance and provoke <disappointment>. 


The nature of K-nots and Rocks is that they tend to entrain the very dramas they attempt to repress and medicate.  These dynamics are consistent with the observation, "What you resist, persists."


If you view <disappointment> itself as another medicinal drama, you might find that <disappointment> might have its own positive intention of medicating even deeper issues about right livelihood, relationships, health and recreation.


In this way, <disappointment> may be medication for intimacy issues and <cough> might be secondary medication for <disappointment>.


Brief Therapy may sometimes work quickly and effectively and a competent practitioner can administer it subtly and artistically, say with a hug or a smile or a kind word - or even a song. 


Sometimes, the client and the practitioner might not be consciously aware of a  therapeutic transaction.


In cases where there is conscious decision by both parties to open this can of worms and play with them, they might find that they might need a bigger can in which to recapture them.







might be the "solution"

to deeper issues.



Clip: http://www.whatistruth.info/story47.html

Sat, 12 Apr 2008


TT Workshop & System Progress

Need to Predict / Ride Trends

Hi Ed,

I am excited to see a TT workshop is available. I put my application with essay in the mailbox today.


Many days pass and I recall thinking about sending a system update and not doing it. I have progress to report; however I feel stuck.


This is a familiar feeling of not completing tasks. I am developing the system on stocks, long side first and am stuck at the portfolio selection task.


I also notice a deeper feeling just now of “not giving up on something.” I hate the idea of quitting or giving up or failure. I will not quit, I may get stuck and procrastinate, but I just do not give up, I really hate it.


This is interesting, I have trouble finishing tasks and I hate to give up or fail.

Now I will report the system progress, you can include it in FAQ if it is useful or leave it out:

The entry is at an exponential average cross or at a swing high break, both work well. I use an ATR type MM stop and a parabolic like trailing exit. Both exits work well. Adds happen twice, the first one is close to the original entry and less profitable, the 2nd add is further along the trend price wise and much better profit wise. I think the 2nd add works better because the trend is in the no-doubt phase. Scaling out did not test better than my Trail. For sizing, I develop a program to allow simulations of all sorts, and I mean all sorts.


The net result of the size exploration is that my risk level on individual positions can increase, but my portfolio heat needs to decrease.


As I work on the system I have an AHA; Pre-TTP my ideas about systems is that they need to predict what a stock or commodity will do with high accuracy.


The key is before TTP I felt the system should predict. Now I view my system as not trying to predict, it is just getting in if there is a trend and riding it. It is sort of saying, "I do not know what this trade will do, but if it trends I can and will ride it. If it does not, I have a plan to follow and will get out."


I feel I still have the “needs to predict” idea for the portfolio section part of the system, so that is an AHA as well. Maybe it is part of why I feel stuck, more likely I have a knot?

Thank you for the sharing!


Prediction is very difficult,

especially if it's about

the future.

- Niels Bohr, Physicist (1885 - 1962)



A prediction is a statement or claim that a particular event will occur in the future.  Belief in the Causal Model supports making predictions; if you know the cause you may be able to predict the future effect.


In TTP, we hold the notion of an evolving moment of now and hold that future and past do not exist other than as medicinal concepts.


In TTP, we use the System Model - that acknowledges dynamic behavior as a result of system intention - that manifests as the components evolve and keep modifying their inter-relationships. 


In general, the behavior of any element does not trace to a single cause.  Rather, it appears as all the system components evolve together.  If one or more system components changes its Rock or "transfer function,"  the entire system behavior may evolve differently.


The TTP Rocks process can provide a way for people to change their deep, automatic, emotional response patterns - thereby changing the behavior mode of the entire system.


For very simple systems, such as a bucket with water draining out through a hole in the bottom - that generates a type of exponentially decaying flow rate, or such as a pendulum - that generates oscillation with damping, we can build fairly good simulation models that "predict" the behavior.


For systems that are rich enough to include the prices of trading instruments, the complexity of the system typically far exceeds the skill and computational expertise of model builders.


In this case, the only computer that can accurately simulate the evolving price is the world itself, as it generates this "solution" in real-time.  One good way to tap into this, the one-and-only solution, is by measuring price and by riding trends.


In TTP, we do not predict things in the sense of creating an image of the future, such as a specific price objective, and then attempt to act on it with, say, limit orders.  We hold policies, such as "Ride Your Winners," "Cut Your Losses," and "Use Stops" to deal with the evolving moment of now.


If you hold two apparently conflicting views, such as <I follow the trend> and <I predict the future> you may find yourself medicating the conflict by jumping your system. 


You might consider taking your feelings and notions to Tribe, or in your case, to the Workshop, and reconciling any conflicts with the TTP Polarity Process.




People Who Hold the Causal Model


typically believe in wizards

who can predict the future.


The current state

of the art of prediction

is such that our wisest wizards

cannot seem to agree

about whether

the world is heating up

or cooling off.


A very simple simulation model

of wizards at work

might show a mode

in which the wizards

bias their predictions

to favor their chances

of receiving more grant money.


Clip: http://www.thegeofactor.com/2006/12/


Fri, 11 Apr 2008


Reality, Science and Time


Thank you for answering my recent "science" type questions, you are helping me to find and organize places for these concepts in my mind.


My interest in trading began roughly at age 14, I am currently 25 and I find it wonderful how my initial passion and interest in trading leads me on the path to truth about larger and more encompassing systems in the real world and discovering all their interconnections.


Lately my interest is in Austrian economics (ie. Mises' Human Action), quantum mechanics, system dynamics, thermodynamics (ie. Into the Cool), mechanical trading systems, psychology and philosophy; I am currently halfway through Atlas Shrugged and also Leonard Peikoff's book on objectivism AKA OPAR. I feel a burning desire and curiosity to "put it all together" as best I can in order to live how I wish to live in the real world and thrive as a human being.

I am curious, do you find the above interests to be a common trait amongst traders? I imagine that the best traders, by default, must seek and understand knowledge of reality as best they can, in as many areas as they can, in order to discover ideas to make their systems really work or else they perish.

PS. When you receive feedback from Dr. Barbour regarding your email about time and your critique of his Time Triangle/Alpha Point model, please keep me in the loop. I find these questions to be fundamental to understanding reality and most fascinating. I feel proud to be a prompt to your email to Dr. Barbour. Keep up the great work Ed.

You might consider taking your feelings about <wanting to figure it out> To Tribe.


When you metaform that feeling from an adversary to an ally, things may fit into place rather automatically.


Then, of course, you can try to figure out how that little trick works.



Fri, 11 Apr 2008


Blogs Feature The Whipsaw Song




I  notice many blogs are featuring the Whipsaw Song.



















These are just the easy one's to find.

I imagine there are many more out there, and in several languages :-)

Thank you for the information.  I notice we are currently showing about 2,700 plays.

Fri, 11 Apr 2008


Workshop Application


I'm sending the application and my essay. Thanks.
I'm waiting for July to meet you.

Thank you for your application.

Fri, 11 Apr 2008


Wants Matching Cover


I enjoyed the whipsaw song, and the best part was the happy countenance you expressed throughout the song.

I also enjoyed the contents of the Trading Tribe book. The book itself though was a little inexpensively produced.


I wish the hardcover jacket of the book front cover matched the paper cover wrapper. The image of the Bull-Bear in the haze imparted on the front hardcover of the book. Maybe you could pay-up on the other book you are making, and make the jacket match the book.


The Trading Tribe is a hard-back with sewn-in signatures. The cover carries the (TT) logo in gold embossing. The dust jacket is four color.


You might consider taking your feelings about  <things that don't match> to Tribe.




Even in Matches


sometimes things don't match evenly.


Clip: http://www.dribbleglass.com/


Wed, 11 Apr 2008


Animals and Time




It seems animals not aware of the illusion of time.

article: http://www.medicalnewstoday.com/


Thank you for the article.

Wed, 11 Apr 2008


Next Book



When do you think that your second book will be available for sale? Can I pre-order it? Finally, what does "file the news" mean ... it is part of "The Essentials"?

Thanks so much.

I am not predicting a completion date. 


File the News is a part of The Whipsaw Song.

Wed, 11 Apr 2008


Magazine Covers



I see corn in the news.







Thank you for the covers.  The Clean Energy cover seems to deal more with energy than corn. I do not see the graphic as indicating emotions about price change.

Wed, 11 Apr 2008


Sex and Trading




Sexual arousal seems to arouse propensity for risk taking.

article:  http://www.msnbc.msn.com/id/23961406/


Thank you for the article.  I wonder if it works the other way around.

Wed, 11 Apr 2008


Asking Why


This is what I understand about science, scientists make a guess as to WHY a certain phenomenon occurs AKA a hypothesis and try to prove it through empirical data.


I am attempting to integrate the method of science (the scientific method) with TTP. Since you are an engineer yourself, your insight in this regard may help me.


My "guess" about the difference about science and TTP is that there really is no difference at all; scientists are not really asking WHY at all or even discovering reasons for anything, they are simply uncovering "how" a certain phenomenon occurs/behaves.


It seems that nobody can ever ultimately figure out WHY the universe follows certain physical laws (eg. thermodynamics, quantum mechanics etc.).


I feel that it is this concept that may complicate understanding when it comes to the fruitlessness of the WHY question and may slow the grasp of the systems view and ultimately the responsibility model, I think that was my issue way back when FAQ first started and I was trying to understand what you were talking about.

Why is useful in various ways:


1. To assert dominance:


Why are you late?


2. To assign blame (causal model):


Why are the cookies missing?


3. To question judgment:


Why are you leaving me?


4. To Justify Expansion


Oil Companies are the Reason.

We need more regulations.




Why is relatively useless in understanding dynamics as the best dynamic models view systems of simultaneously evolving interactions.


Why is a creature of the causal model which typically considers one cause and one effect.



The Causal Model


Useful for Interpersonal Control.




The System Model


Useful for Understanding.


Wed, 11 Apr 2008


Leverage -  Comic Video


Here's the best cordless drill Ad - EVER.

Clip: cordless_drill.wmv

Thank you for the clip.

Wed, 11 Apr 2008


Exponential Lag System / Phoenix System

Hi Ed,

I complete the 150/15 Exponential Lag Project in Excel. My numbers match yours! When I hunt and peck with the test variables, primarily Heat / Fast / Slow, and I notice the longer term variables produce large ending equity balances.


For example, I end up with over 1 billion with a 15% heat and a 1 ATR. It also creates a 90% DD through the 1987-1988 period. Do you notice similar results?


In addition, how may I adjust the system to reflect margin when the system signals for more contracts to be bought than my equity can sustain?

I call a high-heat system with a 90% drawdown and an eventual profit a Phoenix System - since it tends to re-emerge out of its own ashes.


For a margin proxy, you might try using a fraction of volatility.



The Phoenix


periodically re-emerges

from its own ashes.



Clip: http://www.pheonix-az.com/Pheonix_Bird.htm

Wed, 11 Apr 2008


High Frequency Trading and Commission Costs

Hi Ed,

I have attached a word document that attempts to answer the questions you posted regarding "High Frequency Trading and Commission Costs".


Back Test Challenge – Document created on 3/29/2008

(1) Demonstrate an automatic trading system that generates high frequency trading signals, where high frequency means the trades have duration of a couple weeks or less.

System Summary

Approach Type
Long only

Trade Signals
Buy and sell signals are automatically generated by my trading system program logic.

Trade Signals are system generated after the market close. Trade signals are automatically emailed to my email address by 6:00 pm. I enter the orders that evening. Trades are executed on the open the next trading day after the signal is issued. This applies to both entry and exit signals.

For this back test simulation the entry price is set to half way between the open and high. The exit price is set to half way between the open and low. Commissions are excluded

Position Sizing
For this back test simulation the system will trade 1 stock per day maximum and allow 5 open positions maximum

The output lists three back test trade logs in TXT format; 2002 thru 2004; 2004 thru 2006; 2006 thru 2008.

Starting equity for each back test is set to $100,000. Scroll to the bottom for ending equity.

Backtest 2002 to 2004
There were 77 total stocks entered.
Annualized Return on Investment (ROI): 585.76%.

Backtest 2004 to 2006

There were 56 total stocks entered.

Annualized Return on Investment (ROI): 313.15%.

Backtest 2006 to 2008
There were 66 total stocks entered.

Annualized Return on Investment (ROI): 360.33%

(2) Show a track record of actual trades on brokerage house statements that match the signals in (1).
(3) Achieve near zero variation between (1) and (2) for a period of three contiguous months.

Track Record
The attached spreadsheet lists my system back test signals along side their associated actual trades. The Variances have been both positive and negative. The cause has been a few mistakes; a few pre-emptive exits; system modification; entering limit orders vs market orders.

Actual Trade Transaction History and Year to Date Sales


The system began trading 12/20/2007 with a $10,000 account and as of 3/28 has returned 80+%.

The absence of any meaningful response to this challenge is consistent with the theory that high frequency trading is mostly useful as a way to generate excitement and anxiety to medicate deeper issues.

In summary, I feel what I have presented here is a meaningful response. I really don’t know how well high frequency trading works and I don’t know if this particular system will work, however, I feel this is worth exploring. Three months of live trading are not enough to arrive at a confident determination. Within eighteen months I will know more than I do now.

Regarding generating excitement, anxiety and medicating deeper issues, I have, so far, not experienced those feelings building and trading this system. I have been designing, developing and testing software for 30 years. Confidence in software, whatever the application may be, is directly proportional to the effort put forth in the design, the development and especially the testing.

I have put the effort in on this project.

Please feel free to critique, comment, ask questions or otherwise.

Hmmm... As I look through your materials, I do not see a list of all signals the computer generates.  I do not see brokerage statements.


I wonder how your "high frequency" computer system manages to generate only about 65 trades per year out of all those stocks.


Remember, the challenge is to (1) show a computer back-test  of high frequency trades (2) show your actual brokerage statements and (3) demonstrate a match-up.



Thu, 10 Apr 2008

Deflation - Comic Video Clip



Deflation may have a positive intention.


Clip: deflate.wmv

Thank you for the clip.

Thu, 10 Apr 2008


Wants to Publish System


Please find a new version of the Support and Resistance System (I would like to post to the TSP site). I'm available at your convenience to discuss any changes.



In this trading system, we build on the previous module “A Simple Trading System: Support and Resistance.” In this new system we add a new trading metric for exiting positions.


The instruments in the portfolio are continuous contracts. This system test includes:
S&P 500
30 Year US Bonds


The system issues orders to trade long and short positions. The posture types are long, short, or out.

Trading Signals

Metric values calculate after the system receives the open, high, low, and close prices at the end of the trading day. The system uses the new prices to update the values of the long-term trend, trade entry, and trade exit. The system takes 3 parameter values to calculate the trading metrics from the user. We refer to these parameter values as x, y, and z.

Long Term Trend

The system calculates a slow metric to determine the long-term trend. The long-term trend is up or down. The long-term trend is up if today’s high is greater than the highest-high of the previous x days. The long-term trend remains up until today’s low is less than lowest-low of the previous x days.

Trade Entry

The system calculates two medium metric values, a support value and a resistance value. These metric values determine when the system enters long positions and short positions. The value of the medium resistance is the highest-high of the previous y days. The value of the medium support is the lowest-low of the previous y days.

Trade Exit

The system also calculates two fast metric values, a support value and a resistance value. These metric values determine when the system exits long positions and short positions. The value of the fast resistance is the highest-high of the previous z days. The value of the fast support is the lowest-low of the previous z days.

Generating Signals

The system begins the simulation with no positions.

If the long-term trend is positive and today’s high exceeds the medium resistance value (highest-high of previous y days), the system generates an order to enter a long position. The order executes as a buy-stop on the open of the following trading day. The system also generates a protective sell-stop that is equal to the value of the fast support.

If the long-term trend is negative and today’s low is below the medium support value (lowest-low of previous y days), the system generates an order to enter a short position the following trading day. The order executes as a sell-stop on the open of the following trading day. The system also generates a protective buy-stop that is equal to the value of fast resistance.

Position Sizing

This system uses stop-specific position sizing.

When the system generates an order to enter a long position, the system also generates the position size. The position size is the number of contracts the system buys or sells. The system bases the position size on the total equity, the fixed-fraction bet size, and risk-per-lot.

Total Equity

The total equity is equal to the sum of cash and the open profit & loss on all positions.

Fixed-Fraction Bet Size

The fixed-fraction bet size is also known as the instrument heat. The instrument heat is a percentage which determines the individual instrument bet size. The instrument heat is an input by the user.


For long positions, the system calculates the risk-per-lot as the difference between the buy-stop and the protective sell-stop. For short positions, the system calculates the risk-per-lot as the difference between the sell-stop and the protective buy-stop.

Contract Size

The system multiplies the instrument heat by today’s total equity to determine the equity budget. The system divides the equity budget by the risk-per-lot to determine the raw position size. The system determines the contract size by rounding the raw position size to the nearest whole contract.


The system calculates a fill price with 50% skid.

The system fills buy orders at a price halfway between the best price and the high of the day. The best price for a buy order is the highest of the open or the protective stop.

The system fills sell orders at a price halfway between the best price and the low of the day. The best price for a sell order is the lowest of the open or the protective stop.

The system does not charge commission for entering positions or for rolling contracts.


The system outputs a graph of the equity value, records the daily equity values in an equity log, records the 3 trading metrics values in a metrics log, and the trades in a trade log.

Good Start.


You might consider taking your feelings about precision to Tribe.


Here are some specific points to consider:


No definition for "new trading metric."


Ambiguity: you update 3 things:

Long Term Trend.

Trade Entry = an event.

Trade Exit = an event.


Unclear how to update an event.


Long Term Trend can be up or down only - no indication which state is the initial value at the start of he run.


The system now updates 5 things: One slow metric, two medium metrics and two fast metrics. 5 != 3.


Unlikely to be certain of execution on the open for a buy stop.


At "Output" we seem to be back to three metrics again.






has its rewards.



Clip: http://www.ice.org/index.php?display=


Thu, 10 Apr 2008


Whipsaw Song on CNBC

Thank you for sharing your talents. More people interested in the markets would be better off listening to the Whipsaw Song than watching Jim Cramer's Mad Money. I am guessing the Whipsaw Song will never be on CNBC, because nobody would "get what they want." Awesome!

As of the second day, the number of plays is at about 1500.  At this rate, Jim and his friends may see it. I have a TV broadcast version all ready, just in case he wants to convert to Trend Trading.  Booyah!

Thu, 10 Apr 2008


Downloads The Whipsaw Song


I have downloaded the music file from your site so I will not need you to send me a CD or DVD. Thanks. I’ll now be able to enjoy your music on my IPOD and in my car.

By the way my wife and I watched your video together last night and we could see the happiness in your face as you performed. It’s nice to see someone enjoy themselves so much.


All the best.

Thank you for your support.

Thu, 10 Apr 2008


Wants a Booth

Dear Ed,

It was great visiting your site today. I intend to spend more time with it as soon as trading ceases today.

I see you will be conducting a TTP Workshop in July! This is wonderful news. Would it be feasible for me to have a booth near your workshop as a rep of MFG? I would be able to answer any questions trader's might have regarding execution and clearing, etc.

Thank you for any consideration in this regard.

The Workshop does not endorse any particular products or services either directly or by implication by renting booths.


You might consider attending the Workshop as a participant and bringing along your concerns and goals about expanding your business.




Your Growth Rate


can be a function

of the type of fertilizer

you are spreading around.



Clip: http://www.growthstrategypartners.com/


Thu, 10 Apr 2008


Fighting the Tao



I am testing long term trend following paradigms on various baskets of equities exhibiting different beta characteristics. I am not having positive results as I test different parameter sets. I am not a trading prodigy. Is attempting this an unwise endeavor akin to playing a fool's game? I do not want to fight the universe. Is long term trend following on stocks best left to more experienced traders, is it just less compatible, or is the lens of my perception the issue?

Thank you for your service and any advice you care to share.


The result you get is the result you get.


In TTP we hold that intentions = results.


You might consider the taking your feelings about <fighting> to Tribe.




Yin and Yang


describe two interrelating aspects. 


You might see them as fighting or dancing.



Clip: http://en.wikipedia.org/wiki/Taijitu

Thu, 10 Apr 2008


Linking Tribes

Hi Edward:


I am the TT leader in [City]. We seem to be getting a few members here who are interested to join. In view of the small numbers, I suggest we show link up or at least make sure we have close contact.

You can establish Tribe links yourself, by contacting local Tribes. See Tribe Directory, above.

Thu, 10 Apr 2008


Many Necks


You might like this. My reaction is, "Oh, my aching back!"



Clip: http://www.coolbuzz.org/entry/pro-electric-



Thank you for the clip of the one-man-band instrument.


I feel the DIM (Do It Myself) process works about as well in music as it does in other areas.

Thu, 10 Apr 2008


Comments on  The Whipsaw Song




Thank you Ed!


Keeping the Rhythm

Congratulations to you and the other band members on the Whipsaw song Video! It is sincere, fun and very clearly a labor of love. And great music to beat!

You constantly urge us to clarify and simplify our thoughts, such that we could communicate to a child. The whipsaw song could just as well be titled " Trading for 6-yr olds".

I remember you playing it for us in Cambridge Workshop, July-06. I cherish our impromptu jamming session during one of the breaks, it is a moment of exhilaration and unbounded joyousness. To me, to know Ed Seykota the musician adds a personal dimension to Ed - the philosopher, trader and mentor. Its great that a preview of Ed the musician is now available to all.

My analogy for trading is the way I respond to music - to glide with markets and be one with it, soar with the highs and swoop with the sell-offs, and always keep the rhythm.

Thanks for being here, and for being who you are. Be well.

hmm hmm hmm, hmm hmm hmm -lala ...

hmm hmm hmm, hmm hmm hmm -LO ...

:-D ... as I shut down for the night and prepare to go home...



Dear Whipsaw-ologists,

Outstanding ! ! ! Great lyrics, great song, great pickin', great singin', and great advice. You Tube is finally starting to get some class.


Wants Lyrics on the Web

Very enjoyable ! Thanks Ed and all musicians. I learn the guitar version to play with you ! I wonder if you can put the song text on web. Thank you.




Congratulations on completing one of your snapshots! Its great work.

Realizing Snapshot

Congratulations on realizing your Snapshot – creating / producing / editing / making available to the world the Whipsaw Song. I believe it will be enjoyed by many. Great work!


Hits double from last night to this morning. Simply exponential (aladocious) !



Good Job on the Whipsaw Song. It puts a face on all the writing. Good job Chief.

Wants mp3

Congratulations to you and the band on the whipsaw song!

Do you have plans to put it on mp3 for fans to download.

Thank you for your support, comments and suggestions.


I am in process of posting the lyrics and a downloadable mp3 for iPods and such.

Thu, 10 Apr 2008


There is no Time: Julian Barbour Video


You might really like this: http://www.youtube.com/watch?v=WKsNraFxPwk


Thank you for the URL.


In response, I write the following letter:



Dear Dr. Barbour

Thank you for airing your views about time on YouTube and for being willing to champion a contrary position.

I feel a certain kinship with you as I, too am championing a campaign to re-think the application of Bernoulli's equation to lift, reference below.

Per your YouTube video, from Dutch television, I like your common sense, down-to-earth presentations, in particular, noticing that Einstein and Quantum Mechanics converge only under the condition that time is naught.

I like your notion that time is a mental construct,
mostly useful as an organizing principle for a set of condition snapshots.

I wonder if you have some equally appealing notion to support your model of the "triangles" that inhabit a Cartesian grid, such that the lines diverge toward eternity and converge at your alpha point.

You produce the grid, by announcement, with a alpha point that stands by declaration, rather than as three strands of wet spaghetti winding around space, and going here and there.

From your model, you can clearly see the alpha point and the singularity indicating a "big bang."

My question is - what common sense evidence, if any, exists to support the existence of the alpha point rather than constructing the model with long serpentine axes with no particular motivation to converge at an alpha point.

Please help me straighten out my spaghetti strands snapshot and to find some justification for sticking the axes together at an alpha point.

Yours truly,

Ed Seykota


reference to Bernoulli and Lift:

Wed, 9 Apr 2008


White Hat Wants to Trade Links

Hello Mr. Seykota

My name is [Name], and I am contacting you regarding your site at:



I am the webmaster of [Site] and looking for some partnerships or link exchange ideas ... is located at [URL] and is a "white hat" site which provides information and great content on all sports entertainment nationwide.

Thank you for your offer.


This site does not run ads to generate revenue or trade links to increase traffic. 


Links appear on this site to acknowledge content and do not require reciprocation.


See the intention for this site at Ground Rules, near the bottom.


Ed's ultimate intention for The Trading Tribe

and for TTP

is for people to experience it,

and for it to disappear

and become just another passing AHA.


Wed, 9 Apr 2008


Comments on  The Whipsaw Song



A Classic


Very cool ! an instant classic ! Good banjo !




Your whipsaw song is awesome!


Discovers Bluegrass


Hi Ed,

I just finished viewing the highly entertaining YouTube' version of "The Whipsaw Song".
I can sum up with two words . . . . Absolutely Brilliant!

I now like all three kinds of music;
"Country" , "Western" AND "Bluegrass."



Too Good

Way too good! Incredible :)



Agrees with Chorus

Thank you for the song. I'm still smiling, as I type these words.

I agree with all the words, especially the chorus: One good trend pays for 'em all.


Nice Surprise


Great music video Ed! I was just looking through charts here late at night and when I went to your website. Your Whipsaw song is just what I needed! Excellent! What a nice surprise!

Thank you for your support.


This production represents the realization of one of my own snapshots and it reflects the support, encouragement, nagging, butt-kicking and other contributions of many members of the Tribe.


First 24 hours views: YouTube 464 ; Vimeo 44.


Total ~ 508.

Tue, 8 Apr 2008


Comments on  The Whipsaw Song



Nice Job


Yihoo! Ed, that's great! ... Nice job everyone!



This is a great video the Trading Tribe band has created.

I am inspired to learn to play the guitar.

I take to heart the instructional aspects, which I find to be much more meaningful and truthful than many will let themselves accept.

Where can I buy the DVD of all the rest of your band’s work?



Loves It

I love it!!!



Nicely Done

Ed, I very much enjoyed the whipsaw video you created. It was very nicely done.


Further to note below note I’d be interested
in acquiring a copy. Please advise if it’s for sale. Thanks.





Awesome video!




How funny. Looks like you all had a great time making this.





How cool! What a fun way to get a message across, and really great music!



Happy Tears

so good -- made me cry happy tears for you -- great people -- great music, great fun and great advice --- wow -- congrats on accomplishing this -- around the world quickly!!!!!!!!!!!!!!!!!!!!!




I love it. I now have a link to it on my site.

Thank you for your support.


The NNBA is a volunteer organization band that plays benefits for local area hospitals and elder care units.  I ask some of the members to assist me in recording this song -it is the first and only recording of the band.  We have no plans to record anything else.

Sat, 5 Apr 2008


Market Correlation

Hello Ed,

I have had some problems with position correlation lately. The major trend disintegration last month in commodity markets has spurred me to explore market correlation more deeply.


It seems to me that it is difficult to "backtest" market correlation because it is always a different scenario.


Most of the time markets move independently and then there are sudden changes like in February when they seem to all be correlated.


I think that usually this "sudden correlation" happens to the downside. Perhaps it is because all markets are related in the sense that speculators have money in them and will tend to panic at the same time in unrelated markets.


Do you have any advice on how to research correlation as it relates to portfolio heat? I would like to avoid those times in the future when the heat is suddenly turned way up because everything becomes correlated.

Thank you,

You have to trade in the now. You might consider keeping your research in the now as well.


You might consider writing your spec in SVO-p:


You say:

"when the heat is ... turned way up"



Subject: [Who] is turning up the heat.


Verb: past tense: "turned" - use present  tense


Object: heat - ambiguous - use something you can quantify and measure in specific units.





If the Heat is On


there is likely a moment of now

in which something

turns it on.



Clip: http://i.treehugger.com/


Sat, 5 Apr 2008


Has to Deal with Co-Dependents



Which is the best way to deal with codependent relatives/people?


I myself have two aunts who show strong signs / symptoms of codependent behavior. As a matter of fact I myself got deeply enrolled in their dramas for many years since I was a child into adulthood, as they took part in my upbringing.


Nowadays I feel I am quite free. Whatever when I approach or communicate with them, especially one of them, I can feel or 'sense' strong and deep feelings of guilt, anger and shame which she tries to transfer to me.


I feel her "negativity" is always present and almost overwhelming. I also feel they have problems with boundaries. The best resource I have found so far is to keep myself "safely" distant and not coming in touch with her / them too often or for a long time, say, so as not to get "contaminated".

You might consider taking your feelings about <having to deal> to Tribe.





In Co-Dependent Relationships


it's sometimes hard to tell

which one is the nut.



Clip: http://www.boltscience.com/


Fri, 4 Apr 2008


My Stroke of Insight: Jill Bolte Taylor - Video


You might enjoy this video. Thank you for being who you are. Your work has truly transformed my life.


Video - http://www.ted.com/talks/view/id/229

Thank you for the link and for your support.


TTP is largely empirical and its evolution relies on such first-hand reports.


In TTP we notice the right brain processes by the "system model" while the left brain processes by the the "causal model."


At the TTP zero point, the two processes accept and support each other and form an alliance; you experience simultaneous processing and / or willingness to flow back and forth effortlessly.


You might notice that at the end of the video, Taylor suggests that we "should" use our right brains more often in order to have world peace (or, perhaps whirled peas).


This is a typical philosophical construct of the "new age" movement and is consistent with the left brain making a judgment that the right brain is "better."


In TTP, we interrupt this adversarial conundrum with the physiologically indefensible notion of top and bottom brains.  The top part is conscious mind or CM while the bottom part is Fred.  The notion encourages the presumption of the unification of left and right and also suggests how to unify CM and Fred.


Incidentally, we,  as a nation engage an adversarial ritual every four years to decide if "right" or "left" is better - rather than forming alliances to synthesize a unification of intention.




Left and Right Brains


Note the relative lack of commerce

between the two processes.





Right-Left Color Test


Say what you see out loud

as quickly as you can.


Notice if you say


the letter-form of the word,

"yellow ... blue ... orange ..."




the color-form of the word,

"green ... red ... blue ..."


The former is left brain

while the latter is right brain.











Thu, 03 Apr 2008


Swan Lake Ballet -- Video

This is a video of "Swan Lake" performed by a Chinese Ballet Company in either Austria or Germany.


The frogs are remarkable, but wait till you see the prima ballerina -- unforgettable.



Thank you for the link.

Thu, 3 Apr 2008


Anger to Intimacy

see: previous


Thank you so much for your response to my questions. Your response is full of details and just what I needed.


The idea of more intimate forms of communication is exciting to me. I am very interested in having more a meaningful relationship with my wife and kids.


I remember telling my wife that her former employer was way to “touchy-feely” for me. I believe that the “touchy-feely” environment might help to make me a happier person and that just blows my mind.


I commit to dealing with my anger and any deeper issues that arise.


Thank you for helping me.

Thank you for sharing your process.

Thu, 3 Apr 2008


Politics and Telling the Truth

Hi Ed,


I wonder if you think telling the truth is a good resource for a politician to use.


Brad Blanton (see video below) tries using "Radical Honesty" in his bid for Congress in Virginia.


Running as an independent and without a staff and by running one tell-the-truth ad twice, he gets 25% of the vote.


Subsequently one of the major parties picks him up as their candidate and then drops him when he continues telling the truth.


I suspect his political colleagues care less about his honesty about his personal life than they do about the possibility that he may start telling the truth about other things.


Also, Blanton appears to use the "name calling" form of honesty as well as the "report your own feelings" form of honesty.  Name calling tends to levy judgment and alienate people.






One Person Telling the Truth


can have quite an impact


on others.









Thu, 3 Apr 2008


Sex and Love

Hi Ed,

1. Can you please elaborate on what you mean by "File the News."? (On the essentials page.)

2. From the Workshop page, you seem to have replaced sex with love in the Essentials. Do I have it right?

3. How much do I have to pay you to attend the Workshop?

4. I am confused if "Risk Cofusion" is intentional or a typo (FAQ, Apr 2).


1. "File the News" is an Essential in the Whipsaw Song - coming soon to YouTube.


2. Hmmm ... Replacing sex with love might be right for you.  I intend to examine the intentions of both and strategies for expressing both in the Workshop.


3. I am waiting to confirm the location before announcing the price.


4. Thank you for the typo catch.



Thu, 3 Apr 2008


How to Express Anger

see Anger Mangle-ment FAQ 4/2/08


I think about how I might use the

“I feel angry about [specific event]” form, or the

“I resent [specific event]” form.


If my wife puts a glass in the sink after I get done loading the dishwasher, I might respond to my anger by saying “I feel angry that you put this glass in the sink after I just cleaned it out.”


I feel that this runs afoul with not blaming or aiming blame. Therefore, I might also consider responding “I feel angry that I need to clean the sink again so quickly.”


What are some responses to the glass in the sink event, using the “I feel angry about [specific event]” form, which would not blame, aim blame, name call or generalize?

At work, there is a person that complains about his job all the time to just about everybody in our department.


He talks about all the things the company does wrong and how he can’t wait to get another job. This has been going on for years. I feel angry when he complains to me.


What are some responses that I might consider using when he complains to me that avoids blame, aiming blame, name calling or generalizing?

You might consider taking your <anger> to Tribe.  Tribe is particularly effective as an environment for practicing expressing feelings such as anger.


Seeing the positive intention of anger and converting it from an adversary to an ally can be a life-changing experience.


As long as you continue to invalidate and adversarial-ize your feelings about anger you are likely to continue to create drama in which you feel anger.


You (and your wife) might also be using your anger drama as a way to medicate (avoid dealing with) deeper issues.


Thus, you may not find advice (in the form of new response patterns) particularly germane.


When you deal with your deeper issues, you naturally give up your motivation for medicinal drama and naturally drift to more intimate forms of communication.


Here are some patterns for your consideration. If you and your wife find them irrelevant or impractical or unrealistic, you might have deeper issues. In that case, you may wish to retain your current anger patterns to medicate these issues.


You: Honey I want to tell you what I feel.


Her: OK.


You: I really resent seeing a glass in the sink after I load the dishwasher.


Her: Thank you for telling me.


You: Hmmm... Thank you for listening to my feelings. I want to do that again.


Her: OK.


You: (screaming in rage, tuning red) "I hate it, hate it, hate it when I see a @&*%@# glass in the sink.


Her: OK.


You: Wow, that really feels good.  I see now what I'm really upset about.  [You report historical event.]  By the way, I want you to know I appreciate you and I appreciate you bringing the glass from the table to the sink and I really appreciate you encouraging me to explore my feelings.


Her: I love you so much.


You and Her: (rushing off to the bedroom for more communication)




Him: I don't like this company and I can't wait to get another job.


You: Thank you for telling me about your feelings. I'd like to know more about how you feel.  I mean what specific event sets you off. I also mean, where do you feel it in your body.


Him: Yeah. Well, maybe later.  I have  some work to do.



Saying Something Way Differently


may create enough "pattern interruption"


to move the dialog out of the mind


and into the heart.



Clip: http://happybunny.orbitearthstores.com/



Wed, 2 Apr 2008






Congratulations for your intention of staying healthy.


What I can tell you, after almost 5 years bugging you through FAQ and always getting a response, is: I know you get exactly what you want.

What is this HDPSOTTCC? May I get one for myself?

Best regards,

Thank you for your support.






Official Trading Tribe

Carry Card.



To get one, see the Essentials page, via the FAQ index.

Wed, 2 Apr 2008


Risk Confusion

see FAQ 3/30 FAQ Study and Review



Ed says, "One intention of fear is risk control. The confusing presumptions are: (1) Risk is knowable and bad. (2) Control is possible and good."

This is great and it gets me pondering because my immediate thought is to challenge the core of the presumptions. My immediate thought about risk is that it is not necessarily bad, and that control is certainly not always good.

Risk is knowable: Not necessarily true - think Oct 1987 or LTCM, or what Nassim Taleb refers to as the Black Swan.


Risk is bad: Not necessarily true - without taking some risk, we may not be able to make a profit trading.


Control is possible: Not necessarily true - we can hardly absolutely control our feelings.


Control is good: Not necessarily true - controlling our feelings to not feel it create knots.

Wow. It's like shattering some myth we cling onto in our head.

Yet, not necessarily true is not the same as always false. The presumptions are not entirely false. For example, we do need quality control to give the consumer confidence about a product.


We do need to manage risk just like we need to manage money. (You even have a paper on risk management).

So it seems it isn't as black-and-white as I first thought. Risk is not entirely unknowable and some kind of control is possible. Some risks are bad and some control are helpful.


I wonder if there's a general rule of thumb to distinguish what kind of risk is good or what kind of control is bad, which ones (of risk) are knowable and which ones (of control) are possible.


As you effectively demonstrate, application of presumptive judgment such as good and bad typically leads right into confusion and nonsense.


One rule of thumb is to consult your feelings.




You Can Manage Risk


without judging it

or measuring it.


Avoiding danger

is no safer in the long run

than outright exposure.

Life is either a daring adventure

or nothing. -- Helen Keller


Playing safe

is probably the most unsafe thing

in the world.

You cannot stand still.

You must go forward.

-- Robert Collier



Clip: http://www.bized.co.uk/current/mind/


Wed, 2 Apr 2008



Dear Mr. Seykota,

I cannot find a weak point in your health program: intensity, frequency, duration and method are exactly what I recommend. However, maybe the following ideas may be helpful to somebody else. Please consider to publish them in the FAQs.

An endurance training at about 70 to 80% of maximal heart rate is recommendable, since it has the lowest risk/reward ratio. A less intense training is easier, but it does not result in a substantial improvement of physical performance. A more intense approach is associated with discomfort and a higher risk of injury. The maximal heart rate is calculated as (220 - age); consider that this is an approximation and the maximal heart rate can vary, especially (specially?) in people taking medicaments to sink blood pressure. Since you are about 60, your training heart rate is 125 beats per minute...exactly the heart rate you mention.

I personally prefer strength programs with lower loads and higher number of repetitions (instead of 10 reps with, let say, 20 kg, rather 20 with 15 kg).

This method increases endurance and creates less muscle bulk. Of course, if the goal is to increase muscle mass, the first program is more effective. I find that the second program, however, is less stress- and painful. While pain is no necessary, a certain degree of discomfort is unavoidable to achieve progress.

Fast methods to reduce weight: Intra-abdominal fat (between the organs) seems to be more relevant to cardiovascular risk than the fat under the skin.

Liposuction does not reduce deep fat; even a massive fat reduction by liposuction does not reduce cardiovascular risk.



You mention the guillotine. Its use reduces the risk of further cardiovascular events to zero. Self administration, however, can be technically difficult.

I discover an affinity with (several concepts of) the Tribe; they coincide with personal and professional experiences. I don't know if I can help you with your fitness and health program, as I offered, since everything works fine.


It seems that I contacted you for another reason. A way to find it can be to contact a Tribe in a close city. Another suggestion?

Thank you for the information.


You can locate a Tribe near you on the directory page, above.


Alternatively, you can form your own Tribe.


Information on forming and managing Tribes appears in the Trading Tribe Book and in TTP Workshops.

Wed, 2 Apr 2008


Congratulations Ed

Hi Ed,

In reviewing FAQ of late it is great to see you are having such good success with your health plan. Great results and keep it up!


I have a similar profile to your 'original' shape and health stats. I am just beginning to address and take disciplined steps to improve how I feel and what I 'consume'.


You have always been an inspiration to me ever since you returned a phone call to me back in 1990-91 on request I made to you via a letter. I have learned a lot from you and look to this site as a wonderful resource to work on many things! Thanks again.

I'll keep you posted on my results!


Thank you for your support.




Walter Willett's Eating Pyramid


Walter Willet of Harvard University

is the author of


Eat, Drink and Be Healthy



Clip: http://whyfiles.org/179food_pyramid/2.html

Wed, 2 Apr 2008


Anger Mangle-ment


I notice events that anger me. Some events include people parking in unmarked parking spots and people not focusing enough attention while driving due to cell phone usage. Some events that anger me seem petty and immaterial. What are some of the resources that I might consider calling up in response to my anger?

Thank you,

Thank you for sharing your process.


You likely don't have much choice about what makes you angry.


You likely do have a choice about how you respond to your anger.


You might consider telling people the truth about your anger in the moment you notice it.  Use the "I feel angry about [specific event]" form, or the "I resent [specific event]" form rather than name calling or blaming or generalizing. 


You might find that people actually appreciate the information about you if you don't aim the blame at them.


Expressing your anger in the moment may lead you along the path toward more awareness about the deeper issue behind other people taking advantage of "your" resources.


You can practice this in Tribe.


If you let your anger emerge as dozens of small firecrackers during the day, it can help run your engine.  The alternative is to save up your anger for a major explosion every few weeks that can set you back in your relationships.




Your Car Engine


relies on a series of small explosions.





This Engine


runs on very small explosions


and delivers 11.2 watts

at 50,000 rpm.








Tue, 1 Apr 2008


Job Market - Video




Here's a view of the recent job market for white collar workers.



Thank you for the video.