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May 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.

 

 

Questions

(Quotes from Ed in Red)

Answers

Wed, 14 May 2008

 

Workshop Preparation

 

Ed,


Thanks for the assignment. It helps me clarify my thinking and puts me back in the now.


1) Alternatives to walking on egg shells:
After experiencing the feeling of being disapproved of in my Tribe meeting and using the Rocks process to
create a resource rock to replace the medicinal rock "egg shells,"


a) Choose to share my opinion with a colleague / friend / associate and feel good about it
 

b) Choose not share my opinion and feel good about it.
 

c) Share my opinion with a colleague / friend / associate and they disagree. Listen to their opinion and reply with OK or Thank you and feel good about the interaction As I learned more about this person than I new before our conversation
 

d) Disagree with a colleague / friend / associate's opinion and state my own and feel good about it.
 

e) I am continuing to monitor my interactions with others looking for any "walking on egg shells"
feelings and have not had that feeling in over a week and a half. I will continue to monitor.
 

2) I choose not to write and record a song for you.
I realize that writing and recording a song is not the 'fun' part or the reason that I am learning the guitar.
What is the 'fun' part for me is what I call the learning phase:
 

a) making callouses on my fingertips
 

b) learning chords and getting my fingers to be able to find them (without looking!!!)
 

c) practicing to be able to play different chords with my left hand while strumming/picking with my right hand
 

d) Once I become comfortable with the above
 

e) Find something new to learn / play on the guitar
 

f) Just keep iterating through d) and e)
The writing and singing a song is just an event that is going to give me feedback of where I am and
determine if I want to do anything else or take any other paths on my education in guitar playing
or something else (ie. possibly learn piano...)


3) Amusement Parks/ Museums in May
 

May 24th: MOSI (Museum of Science and Industry)
http://www.mosi.org/ Attendees: Me, My Wife, My Niece and a friend of her choosing

May 31st: Busch Gardens www.buschgardens.com
Attendees: My wife and I

I wish to attend the Workshop in Reno.

Thank you for sharing your process.

Wed, 14 May 2008

 

Workshop Preparation


Ed,


Below is my response to your specific follow-up.

 

1. (Intimate and non-intimate)

 

I use the term intimate after reading your FAQ response to my email dated 4/3/08. You post as part of your response, “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.”

I have a hard time recalling events that show the difference between intimate and non-intimate interactions. I question if I know what I want and what I mean by intimate. As I type the previous sentence, I recognize the common theme that I don’t know what I want. I think about the situation prior to responding.

I want to feel more connected to people. I currently feel that I am not really that close to most people. I am closest to my wife. By close and connected I mean the feeling of really understanding the essence of someone. I mean to know what the particular person is really all about and what drives them.

I think about situations where I speak with coworkers and we discuss what they did over the weekend. I believe this is just superficial conversation and is not really an intimate form of communication. As I think more about the situation, I think that this conversation may provide insight into what my coworkers are really all about and might actually be an intimate form of communication.

I feel that I might be over-thinking. I recall a situation when I told my wife that I loved her and I shared my strong feelings with her. I recall feeling like my insides were doing summersaults, getting a little teary eyed, having a hard time speaking and feeling a lump in my throat. I feel that this was an intimate interaction.

I recall a situation when I purchase a Starbucks gift-card for my wife. The Starbucks employee and I have a short conversation as I make the purchase and then I leave. I don’t recall any feelings or sensations throughout the transaction. I feel this was a non-intimate interaction.

 


2. (Conversing without "should")

 

Wife: hey, how are you?
Me: fine, and you?
Wife: good. So, where do you want to eat tonight?
Me: I don’t care. You pick.
Wife: How about Wendy’s?
Me: That’s fine. See you in a little bit.

 


3. (Fun)

 

I recall going to a Cincinnati Reds game with my wife, her grandfather and her cousin. Her grandfather got his company’s seats. The seats were seven rows up right behind the Red’s dugout. I remember sitting in those seats and thinking that I would never be able to enjoy a game from anywhere else in the stadium. Any future game would always be compared to those seats. They were so close to the action.

I always wanted to get a baseball from a game. Therefore, I found myself going down to the dugout every inning with the little kids waiting for a Red’s player to toss a ball in the stands. I was about 21 at the time. At the end of the game, Denny Neagle tossed me the game ball.

I remember the experience being surreal. The seats were fantastic and I got the game ball to boot. It was fun.

I recall Christmas Eve with my wife’s family at her grandmother’s house. There are way too many people crammed in too small of a space. People are loud and the gift opening takes forever. My wife’s grandmother likes to see only one person open a gift at a time. Therefore, there would be about 8 hours of gift opening. I felt that leaving at 2am was more than inappropriate and told my wife. I recall the event as being very un-fun.

 

4. (Feelings in the now)

 

I feel pressure on my stomach like there is a weight on it. There is tightness in my chest. I also feel a lump in my throat.

Thank you for sharing your process.

Wed, 14 May

 

Rocks Process

(forward from another Tribe)


Good morning Tribe,

I am sending you this email to thank you again.

Last night I slept very deeply.

Right now I am feeling disoriented, writing this email is turning out to be a challenge as well. Luckily I haven’t walked into any walls yet J

I am having difficulty thinking clearly, even though I feel fully rested. I know this is a sign that a change has occurred and continues to take place.

My beliefs about women have definitely been altered for the better.

I find that I am at a zero point right now.

Thank you all for your relentless support.

Thank you for sharing your process.

Wed, 14 May 2008

 

Trading Systems


Hello Ed!

Do you mind when I ask you, what bliss you would expect from a "good“ system when bliss is defined as iacgr / worst drawdown?

Is it realistic to aim for a bliss value of 1 or above?

A Bliss of 1.0 is pretty good, better by far than the one you get by buy-and-hold on S&P.  People who claim much larger ones such as 2.0 and up don't usually make that claim for long.

Wed, 14 May 2008

 

Managed Funds


Ed I currently am trading my own account.

* From your experience how easy is it to get hedge fund money once a track record has been established?

* Would the institution look after all the back office & licensing requirements?

* Do you know what sought of track record is required 1,2,3 years +??

* When you started did you get friends money or institutional money?

To get a license here in [Country] is very, very difficult. My thoughts are if I can show an institution a 2-3 year track record on my own account they would probably take me with open arms and look after all the licensing stuff for me.

Any general advice would be much appreciated.

You might consider taking your feelings about <wanting someone to take care of you> to Tribe or to a Workshop.

 

 

 

One Good Way to Get a Hug

 

is to give one.

 

Clip: http://lyn.lifeshapedfaith.com/2007/07/hugs/

Wed, 14 May

 

TSP Extension

 

Ed,

As I told you I rewrote my programs so that I am able to test the systems on stocks now. When I want to short stocks I have to pay a margin. I spoke to my broker and he told me that the margin is 40% of the stock position value. For example: I short 100 shares at a price of 50$ à margin = 100 * 50$ * 0.4 = 2,000$ I implemented the following solution in my programs:

I added a new variable to my program: available_equity that shows me how much equity I have available to buy new positions

When I go long a stock my new available_equity is the prior available_equity less shares * purchase price.

When I short a stock the calculation gets more complicated. I test the following inequation:

(Math.Max((position_size * 1.5 * risk_per_lot), (purchase_price * position_size * 0.6)) > available_equity)

When this condition is fulfilled the shorts will be bought and the available_equity is reduced by the Math.Max of the above inequation.

This should ensure (as a proxy) that the margin can be handled and I even have enough equity, when prices are breaking through the stocks! It also ensures that I only get into a position when I have enough equity to handle it.

I’m eager to get your opinion on this and what you think about converting this to a futures system. In a future the inequation would have this form:

(Math.Max((units * point_value * risk_per_lot * 1.5), (Math.Round(units * point_value * risk_per_lot / margin) + 1)) > available_equity)


You might eliminate the first part of the Math.Max function.

If you are running your portfolio too "hot" you might have to reduce positions to meet margin - rather than when the chart signals you in and out.

Tue, 13 May 2008

 

Japanese Rubber Chart - 1992 to Present

 

Ed,

 

This one looks about ready to go.

 



 

I like your choice of time frame.

Tue, 13 May 2008

 

Workshop - Preparation

 

Ed,



Ed Says:

 

1. You state you want loving relationships. Write a paragraph about some project, vision or enterprise to which you and a significant other person might make an accomplishment commitment.

 

2. Write a paragraph about the positive intention of a dys-functional digestive system.

 

3. Write a schedule that shows all the dates on which you intend to coach baseball.

 

  

1. I have a wife and 5 children.  Three older daughters are in college and two sons, one in middle school and one in elementary school.  The Son who is in middle school expresses his opinions about how we do things and his dislike for much of it.  He is complaining about many things and questions me routinely and this is new. I am responding to this as an opponent not as a father and a receiver. 

 

I remember always getting along with him and now this feels different.  My project in this area is to be able to validate his feelings, communicate with him, offer guidance and boundaries when appropriate, to learn from him, and for both of us to express the love we share

 

This could be a model for me with each child.  Further, I want to send and receive with my wife.  We have patterns that I feel are not communicative.  We bring up a subject have harsh feelings, won’t say or talk about the feelings and suppress it (for fear it may be hurtful to the other I think).  I want to be able to validate her feelings, have her validate my feelings and get to a point where we can communicate at a deeper more meaningful level.

 

2. I am really searching for this one.  I can come up with some ideas in general for positive intentions, but what I want is specifically what is the positive intent of this malfunction for me? 

 

At first I am thinking about this, then I get a feeling that my mind will complicate it and it is simpler than I think.  I am asking it “what is the positive intent?” 

 

The feel I am getting is that I need to relax and to calm down or the positive intention is for me to relax and to calm down, to do what I enjoy and move with the flow in all areas of life. 

 

I am now back to thinking about this and what is stressful and feels like a struggle for me is that my trading is not automated.  I trend follow, but I use me doing the search for what is trending, I pick the entry and exits. 

 

This is taking a lot of effort and “time” and when I have other things that need to be attended to I become stressed or anxious.  If I develop, test and then trust and use a system, the feeling of being behind or needing to get my work finished before the open and conflicts with other tasks could be a memory.  I could spend my “time” doing other things or no thing as life unfolds.  Another positive intent is to eat slowly and enjoy meals consisting of healthy foods.  This maintains a strong healthy body and mind.


3.
I am coach of 2 baseball teams, 8-9 year old and 11-12 year old.  I just committed to coach a 3rd U9 all-star team.  The following is the schedule: (about 50  commitment events)

Thank you for sharing your process.

 

You might consider sharing your experience of this process with your family members.

 

 

Family

 

The Essential Tribe

 

 

 

Clip: http://extension.umd.edu/images/family.jpg

Tue, 13 May 2008

 

Workshop Preparation - Whys Guy


Ed,

I notice that I use the word why quite often.

I comment to a coworker “why wouldn’t you just make up your own mind and decide what you want to do?”

I comment to my son “why did you hit your brother?”

I read on FAQ that “Why is a creature of the causal model.”

What might I consider doing to help move toward the system model which is “useful for understanding?”

Regards,

You might consider purposefully refraining from using the Y word and notice what feelings come up.

 

You Can Get Information

 

by sharing your feeling

of wanting to know

 

and by asking why.

 

 

In the latter case,

your respondent has to guess

what kind of information you want.

 

He is likely to return the why.

 

 

Clip: http://www.thecmsblog.com/why-blog.jpg

Tue, 13 May 2008

 

Berlin Tribe



Dear Mr. Seykota,

I want to initiate a Tribe in Berlin and I need to know your opinion.

Thank you a lot for your immense, selfless work!

See the Directory page for information on how to start a Tribe.

 

You might consider attending a Workshop to help you get the hang of running meetings.

Tue, 13 May 2008

 

Start a Trial in My Oil Trading System

 

Ed,


This is an investment on NYMEX Energy RBOB Gasoline and WTI Crude Oil Crack Futures based on my Refinery Margin Economics Trading System (RMT System)

I would like to propose starting a small trial with an
investment that you're comfortable with and once you are convinced that it can make money, then you may increase the investment.

Target:


To BUY below $6-$7 and hold until Jun for a minimum of +$3/bbl or +$3 mil.

Worse case scenario is that we hold the position until you make +$1/bbl or +$1 mil.

How about you send me a list of all your clients who are still ahead since 1990.

 

Aside from that, I have a hunch about the identity of your "target."

Mon, 12 May 2008

 

Metaforming Metaformation


Ed,

Ed says "I am unable to find an English word for the act of changing something by embracing it differently."

I theorize that since the word doesn't exist, it must not exist.

Ed says "Metaform, verb, transitive: to change something by embracing it differently."

I declare that the "something" that changes, is one's understanding, perceptions and actions, not the object.

A third party observer, with ample grounding in the hard sciences is likely to miss this effect.

 

People emerging from Tribe Meetings holding someone differently are likely to:

1. Treat the someone differently and get a different result. (Logical)

 

2. Notice the someone treats them differently first. (Logical, if you send subtle signals)

 

3. Notice the someone resolves some important relationship issue in your favor before you contact him. (Illogical)

 

4. Notice the someone asserts contact within minutes after the meeting, after refusing contact for months. (Illogical and improbable)

Mon, 12 May 2008

 

Tribe Alert

 
Ed,

 

Alert: This man may be seeking to join a tribe near you.

 


 

Clip: http://farm4.static.flickr.com/3069/

2478613739_dc67e1d9d6_o.jpg

Thank you for the heads-up.  With his extensive range of emotional expression, he might fit in pretty well.

 

Happy

 

Pensive

 

Pain in the Butt

 

 

Clips: http://www.hcpl.net/kidsite/funandgames/

SRP/forms/images/smiley.jpg

Mon, 12 May 2008

 

Voracious Reader


Ed,

I notice when I start to work hard with respect to back testing ideas, including the ones from your site, wanting to read distracts me. I get intense agitation for wanting to know everything through reading everything. After this, I feel "guilty" and frustrated for not focusing on the back-testing.

 

I seem to have so many ideas running through my head but I never focus on one thing long enough to achieve completion. I want to scream out! There is no tribe in El Paso, TX and I'm ready to work in order to experience my feelings. I would like to dissolve this k-not!

Thank you for sharing your process.

 

You might consider taking your feelings about <agitation> and <guilt> to Tribe as entry points.

 

 

A Positive Intention of Agitation

 

is to clean up.

 

 

Clip: http://www.apwapplianceparts.com/

Store_Part.aspx?Id=119105

Mon, 12 May 2008

 

U of Zurich Tries Rocks Process on Mice


Science Daily (May 11, 2008)
— Emotional memories of traumatic life events such as accidents, war experiences or serious illnesses are stored in a particularly robust way by the brain. This renders effective treatment very difficult. Researchers at ETH Zurich and the University of Zurich have now successfully tracked down the molecular bases of these strong, very persistent memories.

 

Reduced calcineurin activity:  Studies of the amygdala, that part of the brain which is important for emotional perception, showed reduced activity of the enzyme calcineurin in conditioned mice compared to mice in which no association with nausea had been generated.

 

Source: http://www.sciencedaily.com/releases/

2008/05/080509152307.htmScienceDaily

 

Thank you for the study. This finding is consistent with the application of the Rocks Process.

Mon, 12 May 2008


re: FAQ Tue, 15 Apr 2008 -

Between Complacency and Apathy


Ed,


Re: Your post, Snopes is doubtful that the quote attributed to Alexander Tyler is correct.


But you may want to read and decide for yourself.
see: http://www.snopes.com/politics/quotes/tyler.asp

Thank you for the catch.

Sun, 11 May 2008

 

Dallas Tribe

Ed,

I am half way through the Trading Tribe book
and noticed there is currently no tribe in the Dallas
area.

Would you have any suggestions on how I could go about forming a tribe if Dallas currently lacks the same?

Perhaps I could make the July TTP workshop, though not certain. Any chance of a price discount for pioneers?

Thanks,

See the Directory link above for instructions on how to announce a Tribe of your own.

 

Workshop "pioneers" receive a special price - the same special price as everyone else.

 

 

 

 

Pioneers

 

sometimes get pie-in-an-ear

and sometimes a tail full of arrows.

 

Many of the early California

Gold Rush pioneers

wind up going broke

while the provisioners who follow

with eggs for sale at $3.00 each

assemble fortunes.

 

 

http://www.freakygaming.com/gallery/

fan_art/lineage_2/toy_bow_and_arrows

Fri, 9 May 2008

 

Magazine Covers


I am sending over some Economist magazine covers for your entertainment. So far, noting much about the Petroleum.

 

 

March 22, 2008

 

This cover seems to have picked

the S&P bottom pretty well.

Thank you for the covers.

 

 

S&P

 

Red circle indicates the date

of the magazine cover.

 

Note: The magazine might appear

on the stands

at a slightly different date.

 

Fri, 9 May 2008

 

Wants Ed to Write a Column


Dear Ed,

I am a writer for [website] and a NYC based hedgie. I have enjoyed reading your book and recent articles, thought you might be interested in writing a column for [our site]. We are presently enjoying over 5 million views per month and are a content provider for Yahoo, AOL, and Forbes.com creating a strong potential that your work will be cross posted on these sites.

 

In exchange for your column, TM will provide a bio, photo, byline and link back to your site/blog. Its been highly effective for me in the past, and believe it will be for you also. If this interests you, let me know and I'll pass your info along to our editor in chief to contact you.

Thank you for your note and invitation.

 

I wonder what kind of column you have in mind.

Fri, 9 May 2008

 

Wants to Attend IV Tribe Meeting


Dear Ed,

Thank you for your mail.

By attending an IV Tribe Meeting I want to work on my procrastination / hesitation issue, which manifests itself on multiple levels and occasions – in trading, interpersonal communication and relations, everyday life situations etc. I don’t know whether ‘classical TTP’ or Rocks Process works better for this, as this is a deeply rooted issue, but I’m very keen to experience both in an IV environment.

My visit to the US is very flexible, I have made no bookings yet, but I want to accomplish the following: IV TTP, West Coast landscape and culture exploration, San Francisco, surfing in San Diego, and visit friends in New York. It’s purposely not set in stone as I want it to be spontaneous and allowing for a “go with the flow” experience.

If you can confirm 5th June 08 as the IV meeting date, and whether I can attend, I will book the tickets.

Best regards,

We are on for June 5 - or perhaps the 19-th if we want to put it off a bit.

Sat, 10 May 2008

 

Historical Testing

 

Ed,

Thank you for your response!

Last days I rewrote my program so that it can backtest the systems you present on your TSP pages for stocks now. I added a metric that shows me how much equity I have to get into new positions. This metric seems so confirm your view of a margin metric.

 

It is only relevant for high-heat systems. When I run the Support/Resistance system on randomly picked German stocks from 2000 to now the results seem to be very well. When I run it on American stocks with a longer history the performance is much worse.

 

Dynamic portfolio selection or portfolio selection in general is a topic I am interested in too. I wonder what algorithms might work well to select stocks for a portfolio to improve the bliss.

As I have historical data of American stocks available since a few weeks I am eager to compute your trends exercise. I have not invested much time in this yet but my first attempts indicated that such test takes up much time as the program has to read in thousands of stocks data.

Sorry, but I don’t really understand what you mean by “create a proxy for simulations”. I also wonder how you define volatility and whether you mean the volatility of a stock or an equity curve.

Yours truly,

Thank you for sharing your process.

 

Historical margin data for futures back-testing is sometimes unavailable.

 

You can use a fraction of recent volatility as a proxy for margin.

 

 

Fri, 9 May 2008

 

Trend Fading


Hi Ed,

I just came across the Whipsaw Song and placed a link to it on my blog. I hope you don’t mind.

I was curious and looked around your website for the next 2h as your approach to dealing with a lot of the emotional problems I encountered the last 4 years fascinated me.

After some damaging trading experiences I decided 5 years ago to start from the bottom, to really learn trading.

 

I started a trading journal where I kept track of all my trades and a blog to verbalize and structure the problems and solutions I encountered on my way. I published all my experiences to receive feedback from other traders, but mostly to hold myself accountable for my actions good or bad.

 

I ran into a lot of emotional problems, which I had to address before I was able to trade free of stress, I encountered the “gut” answers my subconscious mind provided in case a very fast decision was requested and learned to reprogram them, so they now work in sync with my trading plan instead of damaging my account.

 

It was a long and sometimes difficult way, especially as I had to take it alone. I was and am active in some chats where I “met” other traders, whose nickname I now know for years in some cases. And its astonishing that you can respect someone you have never met in person just because he acts and writes in a certain way in a chatroom for a long period of time.

 

But I missed the exchange with others further along the way. Now I seem to have reached a new level when I finally was able to formulate my trading rules

in a simple and clear way. Trading these rules has allowed me to recoup the expenses and the money I had to invest in my trading business to keep it afloat during the last 4 years where I had no business trading real but did it nonetheless.

Trading losses are expenses for me. A loss is something you want to avoid at all cost, but expenses are just part of doing business as a merchant.

 

And even if we buy and sell stocks, futures, commodities or other derivatives, we are just merchants trying to buy cheap and sell higher or sell high and buy back cheaper. A merchant would never complain about the fact that he has to buy his merchandise.

 

He can try to keep his cost down, he can try to get the merchandise for a low price, but that he has to pay for his merchandise is just a fact of life. He also can keep his expenses for running his business down, but he will have expenses for employees, for rent, for computers. And he will have spoiled or stolen merchandise. It’s all a fact, you can try to keep it down but you can’t avoid it. So a trading loss is just expenses I have to pay for running my business. As a professional I try to keep expenses down and will act accordingly, so my overall profitability is higher.

I have just started reading the FAQ and am already curious about reading more. But I’m sure had I found your website earlier it might have saved me some time on my way, where I struggled to get out of my drawdown.

Best regards,

I notice your rules avoid buying at the high so they are not strictly Trend Following.

 

If your goal is to trade free of stress you might consider giving up trying to figure it all out.

 

Stress is a response to a stressor or exogenous disturbance. Anxiety is stress that lingers after the stressor withdraws.

 

 

 

Stress

 

may have less to do with

the markets

 

than it has to do with

your view of the markets.

 

 

 

Your Stressors

 

likely account for about eighty percent

 

of your income.

 

 

Clips: http://employeefactor.com/computing_stress.jpg http://rachelhanley.com/

Fri, 9 May 2008

 

Starting a Fund - Investing in Meditation


Ed,

I have raised $30,000 cash on hand. I have another $15,000 pledged to be delivered by the end of this month.

 

I have been soliciting all my friends and family. I am meditating twice a day. I have signed up and raised $6,000 from family members to get my advanced Transcendental Meditation Technique.

 

I have been devoted to the practice of training myself to stay in the now. I am surrendered to any technique or training that you think is necessary for me to become a top tier money manager. I am willing to make any sacrifice in my life to accomplishing this goal.

You might consider investing yourself with a thorough knowledge of Trend Following and a thorough knowledge of your own emotional reactions to Trend Following.

 

 

 

Meditation

 

seems to work best

for money managers

 

who also practice

sound financial disciplines.

 

Clip: http://faculty.shc.edu/hsalazar/

meditation-group/

Fri, 9 May 2008

 

Back to the Future


Ed,

Are you still trading? Was wondering from your perspective if the markets remind you of the 70's?

Yes, and the 80's, 90's and 00's.
 

Thu, 8 May 2008

 

Stock Market Trading Videos
 

Dear Sir,


I am writing you from [Country] first to congratulate you about your work, and your marvelous site that I am currently exploring.


I also found the your Whipsaw song excellent.
Following your video song, you have 15 more video clips that I went through, and I am taking the opportunity to ask you about the No 4 which deals with the "Stock market trading and analysis" which I found rather interesting and I would appreciate if you can forward me the address of this site.


I have also order your book and I am looking forward in reading it.Many thanks for your assistance.

YouTube seems to post some other videos they consider to be "similar" on the page with The Whipsaw Song.

 

I do not know much about them.

Thu, 08 May 2008


Interest Rate / Personal Rent

Dear Mr. Seykota,

what do you recommend me as a person who wants to be financially independent but might not be so techy to follow the market every second with 4 screens in a row and two rows on one another.

I like technology but it is not the (only) focus in my life.

Our family we also have a technical business which I fully understand and which I am able to supervise. But technical issues and there relations to one another is something to me to understand but not to live with like eating and breathing.

But having studied financial markets now for 5 years explicitly I would like to give somebody else control.

I have fully understood that it is possible sitting at my computer making money with money. I have also understood, that there is also no real difference in quality of live if you make whether 50 or 60% rent a year.

 

And thus it doesn't or wouldn't really matter if you paid 2-10% for the working capital to somebody else. I can buy and sell and I can have gains and losses.

 

But it is possible that gains supersede. It is logical. If there is a strong demand for something that has been neglected too long you can invest with conviction. If something has been talked about too much and too long already and it has just been considered holy then you can be sure it falls from the sky and you can short it and again you make money, we call this money.

 

The more patient you are with all this the more likely you will be on the safe (winning) side.

I am an emotional person and I want to live it that way.

As I remember from your statements in market wizards, a book from Jack Schwager, you said that one should make what he really likes. Well, I really like markets but I am sure there is somebody who likes it better than me.

Sometimes I think having understood that the financial markets have odds that can be determined qualifies someone to live an independent live. And this is true. But if your rent is only slightly above inflation or credit interest rate than you need many years to use your profits to live on them. This is a bit difficult for me to understand at this moment of time. I have understood but I have to wait. Why?

I have seen that commodities have gone up in the last few years and there are known people everybody could have access who knew this in advance. No there are people who know that interest rates will be cut another time until finally the commodity prices fed with this money will really eat us the hair from the head and interest rates will have to be raised again.

 

Then there can be a great dry-up of money everywhere. Borrowing money will be too expensive then to risk it by looking for a yet higher rent. After this dried salt lake people will start to grow on there own money again and small plants will grow again. But then the U.S. and Europe and others will still have great debt and Asian rich countries will exceed us in growth.

But why do I have to play this literally all by myself. Why do I have to ride on this scenarios when I already know that the can or could come.

What I am asking for is something like a rent for everybody. For everybody? No for me!

When great traders or investors promise (let us say they keep the promise at least for themselves and there integrity and self awareness) return exceeding strongly current interest rate levels why don't they then lent the money altogether and offer it together with the superseding yield rate they will be able to make themselves?

Maybe you can laugh about this,

I find it sounds ridiculous but still I find it is close to a reality. It could be a naive but pure child reality. Why not?

Thank you for sharing your process.

 

 

Wed, 07 May 2008

 

Whipsaw Song


Hi Ed,


That song is running through my head again and just now I have a thought. You tell me one time that you want to be a musician and perform but your fingernails are dirty so this is not possible.

 

I forget the exact circumstance but I think it is a memory of a message from parents and I think I hear regret in your voice.

 

Watching you on this YouTube video, I am thinking you are a musician and you perform. According to the meter, 18,000 some odd people are watching you play music. This brings tears to my eyes. I am smiling as I watch you fulfill another dream, maybe just in a different way than you are originally visioning. Good job.

Thank you for your support.

 

 

 

What We Tell Our Children

 

to manipulate them

to wash up for dinner

 

can have lasting effects.

 

 

 

Clip: http://steynian.files.wordpress.com/

2008/04/dirty_hands.jpg

Wed, 7 May 2008


Thoughts on the Art of Living - Movie


Ed,

 

See this clip

Thank you for the clip.

Tue, 06 May 2008

 

Whipsaw Song


Hi Ed,


I checked out the Whipsaw Song. You look GOOD. Thoroughly enjoyed your performance. Got that darn tune in my head now. Catchy. Hope you will do more YouTube!

Thank you for your support.

 

If this music thing doesn't work out, I suppose I can go back to trading.

Tue, 6 May 2008

 

Starting Up



Dear Ed,

 

A friend of mine forwarded your video and after listening to it I thought I would do a search about you and found your Trading Tribe website.

I admit I've never heard of you until I did my research on you.

I'm intrigued with what little I read in your book the pages you made available to read and I only want one thing for Mother's Day, The Trading Tribe Book!

With that said are there any woman in any of your groups? I get the impression that its mostly men.

Unfortunately, there isn't a group in [State].

Suggestions directions!

Thanks in advance!

Thank you for sharing your process.

 

See the directory, above for instructions on starting a Tribe in your area.

 

To get the hang of it, you can apply as a visitor to a Tribe near you and/or attend a Workshop.

 

Men tend to outnumber women in Tribe meetings.  Women report they like the results that show up in men who attend Tribe meetings.

Sun, 4 May 2008

 

Incredible Dog - Movie

 

Ed,


This is just remarkable!!!

What an amazing dog.

 

Clip: Dog

Thank you for the clip.

Sun, 4 May 2008


What is a Thought?


Mr. Seykota:

I understand that:

i) One Thing, Space (Infinite and Eternal) Exists as a Wave-Medium and contains Wave-Motions which Propagate at the Velocity of Light c.


ii) Matter Exists as the Spherical Wave Motion of Space (which determines) the Size of our Finite Spherical Universe within an Infinite Space.

On this basis, what is a thought?

A Thought is our perception - the way we model the world, so we can deal with it effectively according to our goals, plans, ends and desires.

 

In this way, it depends deeply on feeling and emotion.

 

"What lies behind us and what lies before us are tiny matters compared to what lies within." Ralph Waldo Emerson

 

 

 

Thinking about Thought

 

is inherently self-reflective.

 

 

Clip: http://www.fau.edu/freshmanadvising/

images/thought_balloon_hmmmm_hg_clr.gif

Sun, 04 May 2008

 

Double Request

Hi Ed,


In your announcement for your next workshop you double "What to bring" and "What to wear".

Kindest regards,

Thank you for the catch.

Sat, 3 May 2008

 

Global Warming

 

Ed,


Here is an alternate theory on what is causing global warming:

The sun goes through periodic shifts between intense surface activity, and relatively calm surface activity. The intense activity produces immense magnetic storms visible as black spots. These magnetic storms bend light waves. During the last ice age, and briefly during the 20th century when global climates cooled, the sun experienced periods of intense surface activity. Since 'global warming' started its current trend, the sun started a period of calm surface activity.

Now for the only part of the puzzle we can't (yet) prove: Energy from the sun that usually travels in a straight line to the Earth, from A to B, may be 'stolen' by magnetic forces bending it away from its usual trajectory, when the sun's surface activity bubbles up into intense surface storms. This could be the cause of temporary global cooling. If this theory is correct, it means the Earth's climate may shift back and forth from heating to cooling as the sun's activity and magnetic pull increases and decreases, regardless of human activity.

This is not my theory. I saw it on National Geographic.

I like the theory that Global Warming is a function of hot air from political speeches.

Sat, 03 May 2008

 

Trading System Project

Hello Ed -

I develop software in C++ and succeed in duplicating TSP run for 140/20 to the penny for the Support and Resistance system.

The results files are attached.

I match the trade log, equity log and metric log exactly.

I run optimize loop with Trading Metric (15 to 105, step 5) and Trend Definition Metric (100 to 420, step 20) and find optimal solution of 120/30, Bliss = 0.122.

My draw down values (and consequently the Bliss values) during the optimization run sometimes differ slightly  from those posted in the table here:

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

TSP/SR/index.htm

I notice that if I include the warm up days for the ICAGR calculation, my Dr-Dn and Bliss values exactly match or are closer to TSP's values, so I left it that way. However, my "years" value differs from TSP values slightly. Mine is 30.740. TSP's is 30.672 according to this page under ICAGR & Years:

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

TSP/SR/SYS_SR_140-20_05_v_15/index.htm

30.672 * 365.25 = 11,202.948
30.740 * 365.25 = 11,227.785

The "Years" value I compute differs by 24.837 days. This seems to indicate TSP's Years value doesn't include the warm up of 25 days. I wonder what Years value the TSP test actually uses for ICAGR calculation since I match exactly with TSP's Start and End equity values. I compute ICAGR of 0.0310 (rounded to 4 decimals) using 30.672 Years and 0.0309 using 30.740 Years.

A separate issue that took some effort for me to discover was the fact that the final draw down value was ignored by  my software after the last trade close at the end of the run. It turns out that the final draw down is the largest in many cases and consequently impacts Bliss values. I fix the bug and then experience improved results which more closely match TSP.

Thank you for posting the TSP and supporting the project.

Sincerely,


PS - I receive your e-mail regarding TTP Workshop move to Reno. I commit to attend. I am working on follow-up. Thank you for your support.

Thank you for sharing your process.

 

Sat, 3 May 2008

 

The Essentials Card


Ed,

 

thank you for sending me the “Essentials” card that I requested. In addition to receiving the card I was also mailed a two dollar bill?

 

Could you explain your intention of sending along a two dollar bill?

 

Thanks for the card and I also continue to enjoy the whipsaw song on my way to work in the mornings.

So far you appear to be up 100% on your investment.

 

You might consider taking your feelings about <needing to know why> to Tribe.

Fri, 2 May 2008

 

Missing the Market



Hi Ed,

 

I want to attend the upcoming workshop.

 

I notice that I missed the early bird deadline by one day. I also notice I usually miss deadlines and that behavior usually costs me money.

 

Please let me know what the regular price is for the workshop.

 

Thanks,

You might consider taking your feelings about <being a little late> to Tribe.

 

You might also take this issue to the Workshop - although you might like to wait around for a while before signing up so you can risk the price increasing again.

 

 

Missing the Bus

 

can have

a positive intention.

 

 

Clip: http://www.sptimes.com/2008/03/03/

State/Eyes_on_intersections.shtml

Fri, 2 May 2008


Shortest Sudoku Solver


Ed,

 

See:


http://www.wagerlabs.com/

blog/2008/02/shortest-sudoku.html

f:{$[&/x;,x;,/f'@[x;i;:;]'&27=x[,/p i:x?0]?!10]}

Most of the code is in the platform that contains this one-liner.

Fri, 2 May 2008

 

The Whipsaw song and Commitments


Ed,


I listen to the Whipsaw song every morning and it helps my trading and my overall attitude.

It also makes me want to play my guitar more.

I keep my commitment to my Tribe.

I keep my commitment to arrive at work early.

I have an AHA and realize some other life commitments that I need to keep.

I will take the AHA to my Tribe.

Thanks for the process.

Thank you for sharing your process.

Thu, 1 May 2008

 

Buying on Dips

 
Dear Ed,

I get bored with trying to ‘guess’ the market so I sit down with pen and paper and write down the market behavior that I see repeat time and time again. I also write down what makes for good trading. The ‘markets’ I refer to in this exercise are stock index futures, S&P500, DJIA, FTSE100 etc.

Market behavior:

The trend for market indexes are up (perhaps because falling stocks are removed and replaced with rising stocks).

Along the uptrend markets pull back before resuming up trends.

Markets ‘resurrect’ from deep pull backs to take out previous highs.

All these facts have around 80 years back-testability.

Good trading:

Trade with the trend, cut losers, ride winners, manage risk.

From this point I wanted to come up with a trading idea that would stand the test of time. I have designed numerous systems before but always found they end up working great within my finely defined parameters but moving outside of these finds the system implode not just become less useable.

With this basic trading premise now I find that if I change any of the parameters I use, the equity curve is broadly the same shape. I feel this gives it resilience.

This chart shows the equity of the account starting from £0 when trading the FTSE100 since 1982. The system is un-geared at this stage, I simply wanted to find an ‘idea’ that seemed robust.

The premise is that the system is long only.

Each evening it plots the highest close of the previous 20 trading days.

From that figure it generates a value that is 97% of that number and another that is 94% of that number.

If the market closes below the 97% line (ie. has fallen more than 3% from it’s 20 day closing high) we “buy” the market at £1 per point.

We stay “long” of the market until either the market closes below the 94% line or the market makes a new 20 day closing high.

I want to apply this method to three other markets (S&P 500, DJIA, CAC40) and see if they show growing equity.

If they do I want to buy some OHLC data and see what effect trading the day after the signal with a skid allowance makes to the system equity. (Of course in reality I can’t buy or sell the closing value).

OHLC data will allow me to look at setting values off the 20 day high using ATR rather than a fixed % of the closing day high which might help the system adjust to market volatility at this time.

Ed, do you have any other suggestions for problems I haven’t foreseen in this system or areas you feel could prove it invalid?

In the past I have optimized on one market only to find it doesn’t work in others, this time I want to take a broadly basic and un-optimized idea and see if it carries true across a range of markets before looking to position size, changing parameters etc.

Thanks again for FAQ and the systems you’ve posted, they keep me coming back time and time again when ‘gut’ trading leads me to unhappiness.

Regards

Thank you for sharing your process.

 

Systems that buy on dips may miss some major movers that don't react and are sure to get all the ones that fail to follow through.

 

 

 

Some People Start Out

 

trying for second place.

 

 

Clip: http://www.affordableawards.com/

orderrose.htm