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September 1 - 14, 2008

 

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Questions

(Quotes from Ed in Red)

Answers

Tuesday, September 16, 2008

 

Lag Math

 

Ed,

 

Sorry for my ignorance and thus taking away your time. For some reason, I don't get the same results as in your exponential lag example!

 

By applying the formula, I arrive at this:

 

Exp. Lag (day 0) = 0

Exp. Lag (day 1) = 0 + (10-0) / 10 = 1

Exp. Lag (day 2) = 1 + (10-1) / 10 = 1.9

 

Consequently, all subsequent values differ from yours.

 

Where's the flaw in my thinking, if you don't mind?

 

Thanks,

The computation you present seems correct. 

 

I do not know how to analyze your "flaw" without seeing your subsequent values.

Tuesday, September 16, 2008

 

Lag Math

 

Ed,

 

I am stuck on updating a Lag.  On your site you have:


To update the lag, use:

Lag = Lag + (Currrent_Close - Lag) / Time_Constant

Lag = $10 + ($20 - $10) / 5 days

Lag = $12


I get:


Lag = $10 + ($20 - $10) / 5

= $10 + $10 / 5
= $20 / 5
= $4

Will you please point me toward understanding?

Many thanks,

Every day, you move the lag one n-th of the way toward the latest price, where n is the "time constant."

 

In this case you move the lag one fifth of the way toward 20 from 10.

 

You move it (20-10)/5 = 2.

 

Thus you wind up with 10 + 2 = 12.

 

In your method, you are also dividing the lag itself by 5.

 

Thus, you get 10/5 + 10/5 = 2 + 2 = 4.

 

In reducing equations, first reduce the terms inside brackets.

September 14, 2008

 

Girlfriend Smooches Another

 

Good morning Ed,

I hope that everything is fine with you as you don’t answer FAQ for several weeks.

The trouble with my girlfriend moves further.

 

We were in a disco and she wanted to smooch with her best girlfriend.

 

We begin to argue and she ignores me the whole night. A few days later we have a talk about our relationship. She tells me she doesn’t know what she wants - in every aspect in her life. Our relationship, what subject she wants to attend in university and so on.

As she tells me all those things I really don’t know what I want too. Her “I don’t know what I want” begins to start feelings in me that let my trust in our relationship fade slowly away. Some times I feel really sad, sometimes I’m angry. I am really confused too. But I don’t want to give up!

You might consider taking your feelings about <what you want in a relationship> to Tribe as an entry point.

 

You might also ask your girlfriend about her intentions - and go from there.

 

 

 

When Your Girl Starts Making Out

 

with her best friend

 

you might wind up going home

 

with one, two, or zero.

 

 

Clip: http://www.usgirl.org/american/

mississippi-girls

Saturday, September 13, 2008

 

Confusion

 

Dear Ed

I hope your trip to England went well.

I want to look at probability in the market so picked an index (FTSE 100) and three ‘random’ stocks (the first three that came to mind) BARC, RIO,VOD and gathered OHLC data for them from April 1981 for the index and Jan 2003 for the stocks.

I measure the probability of an up, down or no change day, and compute the average probability over those four instruments.

When I looked further and measured the magnitude of the up and down days in absolute terms and as a % of the previous day the numbers were very closely together. I.e. most of the time the average up day was very closely the same as the average down day.

I then looked at a few other factors, for example on the ‘X’ day high what was the probability of the next day being an up day. I tried 1, 2, 3, 4, 5, 10, 20, 50, 100, 120 day highs to see if the next day is a any more likely to be an up day or a down day. To my untrained eye nothing seemed more likely than a coin toss.

When I added any exponential lag longer than 100 period it increased the probability of an up day to around 53% versus 47% for a fall. The average magnitude moved a long way on the FTSE of an average gain on 12 points 53% of the time versus an average fall of 22 points 47% of the time.

When I extended this idea to stocks it didn’t seem to show any clear move in favor of an up day when a stock was above its 100 exp lag.

To conclude this disjointed thinking.

I feel predicting the market direction on any given day based on the few crude factors I’ve looked at seems not a lot more certain than starting the day trading session with a coin toss. ‘Heads I buy, Tails I sell’.

I also wonder if not having formal math training, I am overlooking the importance of a 52% chance as being a lot better than a 50% chance if implemented over long periods of time, maybe this is an ‘edge’.

My returning thought is that because of the way the FTSE 100 is evolved by culling weak constituents and adding strong ones each ¼ does it represent a slightly skewed and beneficial trading opportunity, using what I ‘know’ through math to take the other side of trades that people are putting on as hedges or for reasons other than they think that market is likely to fall.

If the market is random, zero sum and a 50/50 bet, how do some people make millions or billions consistently over time?

Is the only way to make money out of the markets to be lucky or to sell the dream of being lucky to other people?

God I’m confused and frustrated.

You seem to conclude that

 

(1) you can't predict day-to-day price action and

 

(2) some people make lots of money by riding major trends.

 

Your confusion might arise by assuming a connection between the two conclusions.

 

To sort this out further, you might consider taking your feelings of <confusion> to Tribe.

 

 

 

Feelings of Confusion

 

One positive intention

is to motivate

further thought.

 

 

Clip: http://plattsburgh.neric.org/library/

library/htmls/confusion.htm

 

 

Thursday, September 11, 2008

 

Resentful about Inability to Sell Medication

 

Ed,

 

If all the reaction I get [from sending cheer-up videos] is a little smiley face ... then you may be worse off than I thought.

 

I might consider [sending you] a double dose ...

 

Also, maybe you could use some nice music.

You might consider taking your feelings about <allowing other people to feel what they are feeling> to Tribe.

 

 

 

Drug Dealers

 

appear in many forms.

 

The largest,

and arguably the most successful

may be the FED.

 

 

Clip: http://www.keepachildalivestore.org/item/

apparel/drug-dealer-tank

Thursday, September 11, 2008

 

Growth Engine

 

Hello Ed -


I've been re-reading the FAQ and saw the "Trading Tribe Growth Engine" mentioned. How can I access it?

The Growth Engine is part of a suite of software I use to help clients develop and implement trading systems.

Thursday, September 11, 2008

 

Gray Items

 

Ed,

 

Are these gray items on your TSP page ...

 

Acknowledging Limits

Equity and Margin
Trend Definition
Testing Platforms
Bliss Functions
Optimizing a Trend System
Dynamic Portfolio Selection
Dynamic Risk Modification
Pattern Recognition
Presenting the Results
Forming a Fund
Compliance
Marketing
Operations


... topics that are no longer available? Topics that may be? Topics that probably won't be?
 

These items are section titles for which no content currently appears.

Wednesday, September 10, 2008

 

Wants to Know the Right Way

 

Hi Ed,

Do you still conduct the Snapshot Process at the IV Tribe as you describe in the 1/29/06 FAQ "My Old Snapshot and Developing a New Snapshot"? Any modifications or other evolution to the Snapshot Process? In these two plus years, what are the results you observe?

Also, I am not quite sure about the "Circle of Champions." You say "each member takes your snapshot and also presents it as if it were his own. In this way, each member gets to hear the other members champion his snapshot." My understanding is that snapshot is something quite personal for each person, and that my snapshot could mean the world to me while it may not mean much to you. So when other member presents my own snapshot, he is unlikely to match my intensity level, or maybe even no emotional intensity. I don't quite understand the idea of circle of champions.

In addition, when someone presents another person's snapshot, is he to mirror the tone of voice and body language of the original snapshot owner? Or is he to present it according to his own interpretation? If it is the latter case, since that is "present it as if it were his own", does it mean that we encourage the presenter to add his own bias and judgment (good or bad) to other people's snapshot?

Thanks.

You might consider taking your feelings about <doing it right> to Tribe.

 

 

 

The Right Way

 

depends a lot

 

on your intention.

 

 

Clip: http://commons.wikimedia.org/wiki/

Image:%22The_right_way%22.jpg

Tuesday, September 9, 2008

 

Tribe Meeting

 

Ed,



You might enjoy these links about  the physiology of mirroring.

 

http://en.wikipedia.org/wiki/Mirror_neuron


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

Mirror_neuron#Theory_of_mind

 

 

They rings a bell in me.


Our Tribe keeps growing in size and deepness. We progress fast and discover a lot about us. I have a hot seat the day before my birthday. The issue is “A month ago I do not follow a sell signal of my system”. The result: my relationship to my wife and my children improves substantially. TTP is a gift. Thank you very much.

Cordially,

Thank you for sharing your process.

Tuesday, September 9, 2008

 

Dealing with Violation

Dear Ed,

Thank you so much!!!


For the TTP web page for it resources, inspirations and teachings - the Tribe, the Essential Card - they all help enormously.

Snapshot after one year of tribe work:
Our tribe is small, mostly only two people. We meet once a week. A small tribe is better than no tribe.

Meeting outside in nature on a big field provides privacy and I find it easier to access feelings in nature than in a closed room.

Every tribe meeting we still start with your warm up exercises: What are you thinking, feeling, show me a form.

 

For me they are essential to position myself for the Hot Seat. Also I feel an incredible “privacy” with myself –I can say / feel / do what I want and other people only acknowledge it.


We added a fourth warm up. One form to the fullest. This exercise releases random anger and tension not associated with the Hot Seat topic.

 

Often we do breathing exercises instead – meditation breathing or fast breathing in the direction of Holotropic breathing.


During these exercises I feel I am incredibly in the now. Sometimes “break outs” occur and lead, with encouragement of the other tribe member, into a Hot Seat.

Regular Tribes help to maintain positive livelihood, big problems occur less and less.

A couple of weeks ago my girlfriend’s place was burgled the same evening we have a tribe meeting. I have the feeling of rage, helplessness, anger, fear, hate, and loneliness before the tribe. My thoughts go into the direction of “crushing the burglar.”

After an intense Hot Seat of screaming, punching the ground, and crying, my thoughts and feelings are focused on solving the problem. I feel calm, facing reality in the now. I listen to my girlfriend and acknowledge her feelings.

Two days later while shopping for security items my measure tape gets stolen out of the shopping trolley. The pictures of the burglary come up again. I feel the still unresolved bigger picture of the racism and violence here.

 

I feel insecure and inferior. Now I have problems acknowledging my girlfriends feelings. I tell her what is the best thing to do. My stomach cramps together tight. My tribe partner is [on Continent]. I try the DIM process without success.


At one of the “what are you thinking” warm ups I say: I am thinking how to measure the Tribe work. Goal achievement comes up.


After this intense drama situation with and without the Tribe I can say: the Tribe is an essential tool for right livelihood.

Visiting other tribes [City] teaches different techniques and is fun.

Thank you again,

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

 

 

 

 

Resolving K-Nots

 

about feelings about violation

can remove them

as violation attractors.

 

 

 

Clip: http://stuorgs.uidaho.edu/~flame/Power.html

September 7, 2008

 

Blows Up

 

Dear Ed,

I been trading for 10 years and just blew up my account. A relative suggested you might be able to counsel me regarding my inability to create and adhere to a coherent trading plan. I heard that you offer private consultations in Lake Tahoe and that you are a very insightful man. Would it be possible for me to have a meeting with you ? Thanks for your time.

See the Ground Rule Page for information on private consulting.

 

 

 

You May Have To Do a Lot of Setup

 

to get something to explode.

 

 

Clip: http://www.pixaloons.com/pop_balloons.html

September 7, 2008

 

System is Ambiguous

 

Hello Ed,

Forget about the system I emailed to you last week. I went over it after not looking at it for a couple of days and it turns out that it had a subtle bug. It used future data to place trades in the present. Maybe when scientists invent magic I'll try it out with real money. Until then I'll try out some of the other ideas I have. And here is one of them I have for the FOREX markets:

Monday (assuming the market opens at midnight) go long if the market goes up X pips, or go short if the market goes down X pips. X is the same for both trades. When a trade is entered, place a stop Y pips away. If a stop isn't hit, exit the trade when the market closes on Friday at 4PM(Eastern). If a stop is hit, you're done until Monday. The next Monday you do everything again.

I'm having trouble testing this because on a daily bar both entries might be hit and you can't tell which one was first. Only the first one is taken.

You can use inter-day data to resolve these ambiguities.

 

My guess is you are likely to confirm that day-trading, like resisting the Borg, is futile.

 

 

 

With One Eye on the Screen,

 

one eye on CNN

and an earphone

to cover the Bernanke speech,

 

Borg-Trader prepares

to day-trade the S&P.

 

Clip: http://tallteacher.wordpress.com/

2008/05/08/you-talking-to-me/

Sunday, September 7, 2008

 

Inconsistent Information


Hi Chief,

 

On one hand you say, you are a long term trend follower. On the other you say you were short on the day of the crash in 87.

 

How is it possible?

 

In general, thanks a lot for everything.

 

Warm Regards,

I do not recall saying these things to you.

 

I wonder where you get your information.

 

You might take your feelings about <relying on second hand information> and <inconsistency> to Tribe.

Saturday, September 6, 2008

 

Tribe Meeting / Best Day Trading

 

Ed,

 

Thank you for the outstanding technology, your support and advice to all the Tribes and all the work you are doing.

When I think about our last Thursday Tribe meeting, I feel elated, warmer and full of insights.

I feel a sense of joy, support and commitment spread among the participants which I am still embracing.

I notice the difference between figure out and feel in.

Finally, I feel having the checkout process after each hot-seat very helpful for all Tribe members.

It helps connecting stronger and deeper with the “hot-seat” person and his feelings.

Thanks you for the present of being present in the present.

The day after the meeting, I had one of my best day in trading.

Thank you for sharing your process.

September 6, 2008


Wants Help

 

Hi Ed,

I find your process and FAQs very interesting.

 

I plan to attend a meeting / workshop.

 

The nearest TT appears to be in [City].

 

You might check to see if anybody is serious enough to meet up and try the process in [Country], preferably within reasonable travelling distance from [Location].

 

Perhaps, this is better attempted after a workshop, in which case anybody interested might consider attending one, knowing there are others to meet and 'receive' after the event.

I am finding it very hard to write in SVO-p. Are any corrections required to the above text? ;)

Thanks,

Your statement, "You might check ..." implies that people are not serious, unless they devote themselves to making your life convenient.

 

You might consider taking your feelings about <doing things for yourself> and <respecting others> to Tribe.

 

 

Anyone Can Don a Crown

 

The trick lies

in getting subjects to bow.

 

Clip: http://ngfl.northumberland.gov.uk/clipart/

People/pages/royalty_jpg.htm

Thursday, September 4, 2008

 

Missing FAQ

 

Hi Ed,

 

I think of you from time to time. You have not updated the FAQ pages for awhile and I find myself hoping you are doing well and that you have peace with your issue you were dealing with.

Thank you for your support.

Thursday, September 4, 2008

 

Wants Someone to Indulge His Folly

 

Ed,

 

I believe I have a day trading method which will make positive returns most every day. Note that it is a trend following method which I believe can overcome the relatively excessive costs inherent in day trading.

 

The security I prefer to trade is the E-mini S&P contract. I wish to set up or have you set up a simulated trading account to show you the results. If you approve of the results,

 

I am looking for funding from you for real money trading. I do know your views on day trading, but perhaps you may indulge me as an experiment on the folly of day trading.

 

Sincerely,

Your need for funding seems inconsistent with your having a  system that wins "most every day."

 

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

 

 

 

Indulgence

 

In TTP we support

taking forms wherever they go.

 

Taking a form to term

and expecting someone else

to pay for the setup

may indicate arrogance.

 

If you wish to indulge

in arrogance

on a regular basis,

you might consider

seeking a position in government.

 

 

Clip: http://www.blogtext.org/CABAnata/

article/15055.html

Wednesday, September 3, 2008

 

Going Drug-Free

 

Ed,


I am:


Learning required calculus


Charting and identifying trends


Trading with patience, in the black (some sideways movers, a couple of losers, a couple of big winners)
 

Not smoking (over 3 months)


Free from ADHD medications


Learning to live my feelings instead of living to not feel

I sit with my father-in-law as he holds the hand of his brother as his brother's life vacates his body. I visit my father-in-law daily and today I cry. I am sad that he may soon follow his brother. I talk to my wife and her brother. I fell sad and I feel alive.

Thanks,

Thank you for sharing your process.

Wednesday, September 3, 2008

 

Likes the Charts

 

Dear Chief Ed,

Thank you for updating these charts on a daily basis.

For several months / years I have been viewing these books - and have observed that just watching the trends here - is an education greater than all the information that one can take in from all the several high brow, in-depth business reporting magazines, newspapers etc..

I have always maintained your website is the best resource available to all traders; and others too who are brave enough to journey within themselves ...

I wish you well - always

Thank you for your support.