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February 15 - 28, 2009

 

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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

Saturday, February 28, 2009

 

Surviving Collapse - Some Profiles
 

Ed,


On Thursday, Ed made a comment that since I have a personal familiarity with the fall of the Russian Empire, I can look into examples of
winning strategies for surviving that collapse.

 

The idea intrigues me. My initial premise is that no such strategy existed in country and one could only preserve his wealth (and possibly life) if one left the country, the sooner the better. I attach two profiles. I have a number of other profiles in mind if there is interest.

 

-----

 

Fyodor Afanasiev is my maternal great-grandfather. Fyodor is born in 1883, fights as a second lieutenant in Russo-Japanese war of 1904-1905 and earns decorations for bravery. Earns decorations for planning and bravery on the Eastern Front in WWI. He is chief of staff first of an infantry division, then an army corps and finally an army. In 1917 he is a colonel when communists take over Russia, withdraw from WWI and disband the military and abolish officers' rank.

His career path continues seemingly uninterrupted. In 1918 he joins the new Workers' and Peasants' Red Army. In 1919 he is the chief of staff of the Caucasus Front in Russian civil war. In 1920 he is the chief of staff to Commander-in-Chief, Siberia.

CnC Siberia's main task is to extract enough grain from Russia's bread basket to feed Bolshevik government in Moscow and Bolshevik armies on North-Western front as they invade Poland. In 1921 Fyodor he writes a 15-page report on his military operations against "armed bandits" in Siberia. He notes that the "insurrection" has no political motivation except for peasants' dissatisfaction with taxation policies. As an example, he cites a decree to fleece sheep, issued the previous winter, which leads to flocks freezing to death. He reports success in restoring "socialist order" and enforcing soviet laws.

In 1922 he is deputy head of WPRA Military Academy in Moscow. In 1924 he is no longer in active service. In 1935 he dies in a "communal apartment," in which the government had given him one room.
 

-----

 

 

Mikhail Tukhachevsky is born in 1893 to an impoverished landowner. His father sells his land to repay debts when Mikhail is young. In 1914 Mikhail fights as a second lieutenant in WWI. In 1915 he is a POW in Germany.

In 1918 Mikhail returns to Russia joins Workers' and Peasants' Red Army. Leon Trotsky notices Mikhail's resolve in dealing with enemies, and he rises quickly through the ranks. Mikhail arranges the arrest of current owners of his childhood home and confiscation of their land. The farm becomes state property, and it becomes Mikhail's "dacha." His mother and sisters live on it full-time.

In 1919 he commands an army on Eastern (Siberian) front. In 1920 Mikhail is CnC Western Front and leads Bolshevik invasion of Poland. The offensive suffers a crushing defeat at the hands of Josef Pilsudski. Polish success in fighting back Bolshevik invasion encourages popular protest against Bolshevik policies. Mikhail becomes famous for "liquidating" workers' insurrection in St. Petersburg and peasants' rebellion in Tambov region. In Tambov, he air-sprays villages with poison gas. In 1921 Mikhail is the head of WPRA Military Academy. In 1925 he is Red Army Chief of Staff. In 1931 he is deputy minister of defense. In 1935 he is Marshal of the Soviet Union.

In 1937 Stalin sends him to command an out of the way military district. Mikhail pleads with Stalin to bring him back to Moscow. Stalin says he will. Two weeks later Stalin orders Mikhail's arrest. Mikhail stands trial in Moscow and Stalin orders his execution a month later. Stalin orders arrests of Mikhail's mother, four sisters and two brothers, wife, daughter as well as brothers' and sisters' spouses. The women go to concentration camps. The men and Mikhail's wife go before firing squads.

Thank you for sharing your research.

 

When a government takes more than the people can produce, shortages develop, personal survival becomes the main concern and humanity disappears.

 

 

 

Russians Shearing Their Own Sheep

 

make sure the sheep

can make it through the winter.

 

Russians Shearing Russians

are typically not so careful.

 

 

Clip: http://www.serpukhov.su/museum/

gonch_sheep.jpg

Sat, Feb 28, 2009

 

Tribe Report - Huge Changes


Ed,

today I talk to several members of the [City] Tribe. They report huge changes.
 

- After almost 9 years and several hundred hours of psychotherapy, my mother was still grieving my father. After her first hot seat, she accepts the
inevitability of death and realizes that the grave contains just his rests and that he is still present in us.

 

She stops feeling guilty for not visiting his grave regularly. She also worked on "frustration", "loneliness" and "anger"; she observes a completely new attitude to family members and problems and enjoys a substantial improvement in her quality of life.


- My sister and her husband understand their need for a second child and start working on it ... well ... very regularly.


- Several members mention a very different approach to "anger" and not getting involved in drama for the first time after years.


According with their reports, the members spread the word and several persons are interested. I expect this Tribe to grow fast.

I remember my graduation in IV and enjoy being a healer.

Yours,

Thank you for sharing your process.

 

Grief is intense sadness, such as that arising from bereavement.

 

TTP can help in the transformation of grief from intense sadness to joyous remembrance  of meaningful connections.

 

 

 

The Kubler-Ross Stages of Grief

 

Denial and Isolation

Anger

Bargaining

Depression

Acceptance

 

 

Clip: http://dying.lovetoknow.com/images/Dying/

thumb/d/d4/Grieving_loss_of_a_child.jpg/

200px-Grieving_loss_of_a_child.jpg

Sat, Feb 28, 2009

 

Pendulum Model

Ed,

 

My earlier version shows an error in units. The units of velocity should be meters/(second*second), not meters/second.

I assumed that the motion of the pendulum is essentially horizontal in order to simplify the equation and not have to deal with arcs but can just deal with some simple triangles. There are two equivalent triangles. One for the displacement of the mass and one for the change in velocity. The gap represents the horizontal displacement of the pendulum from its equilibrium position, and it forms a triangle with the length of the pendulum. The other triangle is formed by the vector of gravity and the change in velocity. When I simplify them I get an equation for change in velocity that says change in velocity = gravity*gap/length of pendulum)

You might consider striving for extreme accuracy in assigning your units of measure and in describing its structure and behavior.

 

For example, resistance does not return the pendulum toward zero. It decreases the amplitude of the oscillation toward zero.


The position of the pendulum returns to zero
and leaves zero repeatedly, in normal back-and-forth operation.

 

You might also consider deriving a more accurate formulation for acceleration.  Your linearity assumption makes your solution accurate only for a pendulum with an arc of zero - essentially a motionless one.

 

 

 

A Pendulum Obeys the Linear Model

 

only while at rest.

 

Clip: http://www.sedona-hi.com/store/imgs/

pendulum.jpg

February 27, 2009

 

IVTT - Memo

Progress with Goals

 

Ed,


Ed Says:

 

Thank you for your note with photos of your airplanes and mosaics.
 

You mention some hesitations at and around the point of sale / collection / receiving acknowledgment.
 

I wonder what, if anything, is standing between you
and picking one of the many options you enumerate and committing to it and realizing it
and receiving acknowledgment for it.

 

Thank you for your encouragement. Untying k-nots is the work of a tribe. I may associate accomplishment with guilt, and stall or sidetrack when I sense accomplishment (or acknowledgment) is within reach.

My mosaics page no longer says "I will upload photos next week." It is far from complete, but now displays a dozen works more than it did. As I add more images to it, I want to ask your permission to use your portrait on my site.

Yes, You may use my portrait on your site.  If you send me a copy of it, I can post it here as well.

 

 

Pixilation of Photo

 

Method: drilling holes in wall board.

 

Image from dust jacket of The Trading Tribe

 

 

Detail of Face

 

February 27, 2009


Correcting the Teacher


Ed,

Thank you. Note the spelling of my first name: [Name].

I write this correction with hesitation and I feel that I am edgy and sweaty. I stop writing, feel my feelings and I realize that this is just a simple correction. Thinking further about it, my culture forbids a student from correcting a teacher which may be why I offer no correction in July 08!!.

 

I notice that offering the correction avoids ambiguity in my identity. I am aware of the dangers of deferring to authority figures even in events where such authorities are in clear error, sometimes in life threatening or fatal situations. I can see with this simple exercise how that can be feasible.

Thank you for teachings.

Thank you for sharing your process.

 

In TTP we have senders and receivers and we are all teachers and students.

Friday, February 27, 2009


IVTT Rocks Process Summary:

Sisyphus and Trading

Dear Ed,

 

Last night was my first time on the hot seat for a Rocks Process. At the beginning of the meeting I did not have an issue to discuss with the Tribe.

 

During the opening drumming I fell into introspection and self-chastisement over a bad trade. That evoked a series of images in my mind. Initially I saw a red and white bull's-eye painted upon my forehead at which I pointed a gun.

 

Although the image of a bulls-eye on my forehead and a gun in my hand was novel, for years I have wondered why my personal achievements always seem to foreshadow pain and loss. To my amazement, I sometimes see disaster coming at me like the headlight on a railroad engine speeding down the tracks at night. Even though I see that light and know the consequences of staying put I do not step off the track just stand there and take it, getting tossed aside or flattened by the oncoming train. Afterwards, I rise up, recover and start working to achieve a new level.

 

I expressed to the Tribe my tendency to undermine or "kill" myself whenever I experience success. The Tribe offered insights.

 

Ed proposed the image of Sisyphus, a cruel king in Greek mythology whose punishment for hubris was consignment for eternity to a frustrating and pointless task: repeatedly rolling a huge boulder up near the of a hill only to have it roll back down again. Similarly, I seem driven to experience pain in order to justify success. Upon achievement something triggers Fred (my subconscious actor) to  motivate actions or decisions guaranteed to undermine each success.

 

Is this pattern just my life "returning to the mean" after a strong uptrend?  Or am I actively destroying gains to satisfy some deep psychosis? As a trader, a new equity high in my account encourages me to take larger risks  followed by massive drawdowns.

 

Of course I consciously know better. This  is followed by aggressive trading to win a new equity high. The cycle then  repeats. It is a painful, stressful, but strangely satisfying route to trading success. This pattern of success, destruction of gains and  struggle to higher achievement has played out repeatedly in other aspects of my  life  too.

 

Through a series of questions Ed and the Tribe led me to recall a time 56 years ago (at 4 years old) when I was about to get a serious bottom  spanking with a wooden spoon.

 

My mother had caught sight of me darting behind a bush down a nearby hillside where, I later learned, my older pre-adolescent playmates went to share a sneak inspection of one fellow's sister's vagina (voluntary on her part it seemed). Although at 4 it was  puzzling (I think) why this might be of interest, I wanted to do anything these older friends did and eagerly sought to join in, as I had seen them run down the hill to the bush.

 

As I started down hill, I knew that something was going on that Mom would not like and felt dramatically torn between a "new high" (older kids  allowing me to participate in their forbidden activities) and "drawdown" (loyalty to restrictive family values).

 

Mother must have missed me and knowing where we played, spotted me heading down the hill, somehow  assessed  the illicit situation going on behind the bush, broke up the party and hauled me back home for punishment. I did not feel that I had done anything wrong, especially since I did not get that sneak peak! My pleadings to Mom fell upon deaf ears. I recall her saying "This will hurt me more than it will hurt you." and then laying into my bottom with that wooden spoon.

 

After a few swats I decided to stop crying and shut up and I did so. The paddling I received was the first of several as a child. It was not unusual in those days. But I never cried out loud again that I recall. That cold silent toughness in the face of pain became my Rock.

 

At the Tribe meeting I found myself believing that whole experience was behind my Sisyphus-ian problem. It was the Tribe that helped me to identify cold silent toughness as my Rock. It works like this. Ascending a "new high"  (achievement; recognition; big wins) triggers a fear that I may destroy valued relationships or be at odds with authority (family or friends; a boss; a relationship partner; or the market). To compensate I seek punishment. My Rock is an ability to shut up and take my punishment in silence, thereby justifying my success to myself while paying penance to whose who may have been offended. I then feel free to again prove my worthiness to myself and others by achieving yet another new high. The cycle then repeats.

 

I indicated willingness to take the hot seat.

 

Ed queried the Tribe whether they believed me serious about this endeavor. They did and we went into role  playing. The process is known to Tribe members. I will not recount the details but rather convey my impressions and the summary.

 

It was a surprisingly powerful experience and a very counter-intuitive journey. The scary aspects that I anticipated before beginning included embarrassment at acting out in front of people, revealing to others a situation in where I was not in control and exposure of weak willpower that has resulted in trading, business and relationship losses. All concerns vanished quickly once I made the internal commitment to proceed, expressed that to the group and we got underway.

 

After repeating the event we discussed how I might have handled the situation differently.

 

Rather than just shut down and hold all response inside me at the onslaught of punishment and pain I might

 

1) avoid punishment altogether by being more discreet at the outset,

 

2) consider my mother's feelings (and forestall punishment) by asking her how my actions and her resort to corporal punishment made her feel,

 

3) express my own feelings of distress over the conflict between my desire for inclusion in other kid activities (driven by loneliness) and her belief that their activities were contrary to family moral values and her performance as a mother,

 

4) express my growing desire for sovereignty over my actions as a growing, responsible and loving child,

 

5) step back to assess the situation, buy time and consider all options before resorting to some radical action (denial, lying, pleading or loading up on some risky trading position) and finally,

 

6) keep the existing resource of cold silent toughness as a percent solution" when all else fails. We made a new Rock with these resources.

 

Both tired and energized, we all checked out and Ed adjourned the Tribe sometime after 2:00 a.m.

 

This morning, a bit later than usual, I was back at my trading desk. Did my memory of that Rock slip into oblivion? No! To my pleasant surprise, as I scanned the 10 markets I normally trade I had a new feeling of calm detachment. I entered and exited trades calmly, less frequently, with tight stops, smaller position sizes and better results. I also feel a new depth of resources to deal with relationships, commitments and obligations in the future. Importantly, these feel like appropriate resources that are closely linked to the resolution of my K-not about success.

 

Like Alexander who severed the original Gordian knot (the mythical knot that could not be untied) our Tribe cut the K-not that undermines success with a bold stroke of its collective sword. I am very grateful to Ed and the Incline Village Trading Tribe for helping me make important psychological progress toward right livelihood, right relationships and right self-image.
 

Best regards,

Thank you for sharing your process.

 

 

 

Sisyphus

 

can serve as a model

for traders.

 

 

Clip: http://www.indorphyn.com/wp-content/uploads/

2007/01/Sisyphus.jpg

Friday, February 27, 2009l

 

IVTT - Meeting Report

 

Ed,

 

One of the most powerful things about the Rock Process, is that it continuously brings up, and address rocks WE ALL HAVE.
 

When someone has the courage to take the Hot Seat and fully commit to the process, they not only heal themselves, they heal all tribe members pre to some degree.

 

We ALL HAVE SIMILAR if not THE SAME rocks.
 

When tribe member X released a Rock originating out of being punished for a healthy childhood sexual exploration, ALL members present could relate in some way... I could relate COMPLETELY as THE SAME event happened to me.
 

Tribe member X "carried the torch" for us all, and especially me.

 

His healing was "contagious" and helped us all.
 

Thank you Tribe Member X.

Thank you for sharing your process.

Friday, February 27, 2009

 

Progress Report - System Development

 

Ed,


As I have vacation now I am resuming my programming. Currently I added short-going to the EA system, an ATR optimizer (period and multiplier)
and a Monte Carlo Simulation.


I'm looking forward to add hard stops to the EA system and to test different position sizing methods (for example core equity instead of daily equity).

Thank you for sharing your process.

Friday, February 27, 2009


Important Puns
 

Ed,

 

The roundest knight at King Arthur's round table was Sir Cumference. He acquired his size from too much pi.

 

I saw an eye doctor on an Alaskan island, but it turned out to be an optical Aleutian .

 

She was only a whisky maker, but he loved her still.
 

A rubber band pistol was confiscated from algebra class because it was a weapon of math disruption.
 

The butcher backed into the meat grinder and got a little behind in his work.

 

No matter how much you push the envelope, it'll still be stationery.

 

A dog gave birth to puppies near the road and was cited for littering.

 

A grenade thrown into a kitchen in France would result in linoleum blown apart.


Two silk worms had a race. They ended up in a tie.
 

Time flies like an arrow. Fruit flies like a banana.

A hole has been found in the nudist camp wall. The police are looking into it.

 

Atheism is a non-prophet organization.

 

Two hats hanging on a hat rack in the hallway. One hat said to the other, 'You stay here; I'll go on a head.'

 

I wondered why the baseball kept getting bigger. Then, it hit me.

 

A sign on the lawn at a drug rehab centre said: 'Keep off the Grass.'


A small boy swallowed some coins and was taken to a hospital. When his grandmother telephoned to see how he was, a nurse said, 'No change yet.'

 

A chicken crossing the road is poultry in motion.

 

The short fortune-teller who escaped from prison was a small medium at large.

 

The man who survived mustard gas and pepper spray is now a seasoned veteran.

 

A backward poet writes inverse.

 

In democracy it's your vote that counts. In feudalism it's your count that votes.

 

When cannibals ate a missionary, they got a taste of religion.

 

When cannibals ate a clown they said it tasted funny.

 

Don't join dangerous cults: Practice safe sects!

OK.

Friday, February 27, 2009

 

Wants Advice

Dear Ed Seykota,

 

I read all your opinion on thise site even onother sites.

 

Some times my family at home call me Seykota-Man ;-). Becouse i respect you mucd make myself to implement all your advise.

 

Becouse as you know from my first letter i " find out and understand through my resarch, trend following possibility. not by anyone advise and after saw your opinion on reading Market Wizards .make desicion that man with whom need to learn.).

 

What about how i find your web site? Very simlpy. Finishing a the book ,start to looking for ahything about you about yor opinion on "search enginee" and finaly find you. I was happy when i saw you give advise. And i appy that i have chanse to write you.

 

What about you thought that i confused on my last letter. I dont think so. I just try to tell more on one letter becouse you can answer just one time on month. Exept it you just one man but we who write you so much.

 

In that is why most of time i just try to ask more. and quetsion qhich not concerning each other topics. But any way i am ready to accept any advise from you. But i could be happy more if i find answer direct to my quetsion.

 

By the way i also play m not on pianino and accordion. What about me i choose my way. It is to become good trader. That is all / But i know one thing also if you want to become good in some business ,you need to study evrything about that field.

 

By the way. I think you was very busy on february. Becouse you could answer at the end of the month in spite of you put time zone from 1-14. Except it your answers was very small. Again i understand you one man we are so much.

 

I read the book wich you advis eon web site .Espec the book about Cessy Livermore. I think if any body make desicion to be trader first book which him need to read is the that book.

Thank you Beforehand .

 

I am happy that you make thise FAQ.


Best Regards

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

 

 

 

Health Expert

 

 

Clip: http://edrumline.com/edrumline/

images/a-advisor.jpg

Friday, February 27, 2009
 

Feelings Questions

 

Ed,

1. When you feel a feeling where are your thoughts (future, or present)?
 

2. Where do the feelings you are feeling come from (past, future, or present > events)?
 

3. Which feelings occur when you are in the present moment?

1. A feeling is conscious awareness of an emotion.

 

Experiencing a feeling may lead to AHA's and wisdom, particularly if you integrate the experience into pro-active responses.

 

You might be likely to have thoughts about your experience and to think of ways to implement your learnings.

 

The TTP Rocks Process is one way to support and to focus the transformation of emotion into wisdom.

 

2. Feelings, like everything else, exist only in the ever-evolving moment of now.

 

3. All feelings occur in the now.

Friday, February 27, 2009 9:10 PM

TSP

Ed,

 

What are "Dynamic Portfolio Selection", "Dynamic Risk Modification" and "Pattern Recognition" in the context of trend trading? I mean:

1) is there a way I can mechanically choose the the "best performing instruments" upon which to place the next trade, other than objective functions like liquidity, volatility, recent historical performance, momentum, etc.? I notice that many traders refer to "dynamic portfolio selection" as a kind of magical filter;


2) things that come up to my mind are only overall open or total risk, group or sector risk, etc., other than the conventional volatility based position sizing;


3) any example of a pattern recognition algorithm other than standard indicators such as highs, lows, averages, slopes, etc.?


Do you know of any resources for study?

We are currently examining Dynamic Feedback System Models as possible predicates for trend-following systems.

Thursday, February 26, 2009

 

Politically Incorrect Video

How to Make Mo Money Without Using Yo Money

 

Ed,

http://www.youtube.com/watch?v=7jukQX2pl2Q

It works for me.

Thursday, February 26, 2009


Stonehenge Mystery Solution

Ed,


For hundreds, maybe thousands of years, people have been trying to figure out how primitive people could build huge structures such as Stonehenge and the pyramids out of stone blocks weighing thousands of pounds. Scientists have been stumped.


Then along comes a normal guy, a retired Michigan construction worker, and he says, "I would do it like this." And he does. This guy uses the simplest tools known to man and shows how simple and easy it would have been to create Stonehenge.

http://j-walkblog.com/index.php?/weblog/posts/

moving_big_rocks

Thank you for the URL.

 

I can identify with this guy. 

 

My essential apparatus for demonstrating the principle of Radial Momentum is a paper tube and a paper cone.  You can get the effect by blowing through them and noticing the results.

 

 

Friday, February 27, 2009

 

In Gold We Trust

 

Ed,

 

You might like to see this, our latest research report: In Gold We Trust, February 23, 2009.

Thank you for the report, and for the astoundingly accurate trade timing signal.

 

 

April Gold

 

The red circle

shows the report publication date.

 

 

Friday, February 27, 2009

 

Hardware Abuse


Ed,

 

If you ever feel frustration about your computers, You might like these videos.
 

1. Blow them up:
http://www.youtube.com/watch?

v=drQlSptFXXI&feature=related
 

2. Burn them up:
http://www.youtube.com/watch?

v=6fUK9CZ9LPI&feature=related
 

3. Shoot them up:
http://www.youtube.com/watch?

v=FhlZ7wAAc74&feature=related

Thank you for the URL's.

Friday, February 27, 2009

 

Embarrassing Video

Hi Ed,

 

I want to send you a video from YouTube - it seems is no longer there.

 

As this was a Congressional panel asking the SEC people why and when they knew about / had been warned many times about Madoff's Ponzi scheme,
they had done nothing.

 

[Name] really grilled them over this, but they
simply had no answers and looked just like the idiots /that they are.

I guess it was so embarrassing to the SEC / and YouTube probably got enough Government pressure from various related departments, they took it off.


Sorry they removed it - as you would have really enjoyed seeing it.

Best regards,

Thank you for the notice.

 

See Embarrassment, below.

Friday, February 27, 2009

 

IVTT Meeting Report:

Drama About Being Late

Ed,

My flight to IV is beset by delays. At first, I am not worried as I believe I have full intention to make it to the meeting on time. As the day progresses, I am surrounded by outwardly nervous travelers whose "late" dramas are building.

 

I can not resist the urge to follow this strong force, and my uneasiness/late drama grows during the course of the day.

I miss my connection to Reno. I decide my best alternative option is to book a flight to another city and drive to IV. On the flight I feel a "washing machine" feeling in my stomach as I realize this result is my intention, and everyone else's intention collectively. I feel considerable resistance accepting this. As I process this, my warbly stomach segues into a feeling of tightness in my chest. I am now worrying if I am allowed to attend the meeting, and if I am to be rejected by the tribe.

I race 200+ miles to IV [by car], arriving halfway through the meeting just as the group is about to break for dinner. I feel fatigue from travelling by air and car for nearly 15 hours, though I am excited and eager to work. I discover I miss a rocks process; this saddens me as every rocks process I observe gives me great resources and strength.

After a fascinating foray into system dynamics, we move onto the stated objective of this IVTT session: goal setting. Prior to the meeting we work on formulating goals that are (1) very specific and (2) measurable.

 

We each stand up and proclaim our goal, then each tribe member responds if he/she is able to support us on that goal, and any comments associated with the goal. Lack of specificity is a common comment.

 

After the tribe reviews the goal, the goal-proclaiming tribe member repeats back what he/she heard.


I find the tribe goal-setting technology like no other goal setting techniques I encounter. I previously set goals by setting aside a few moments of quiet thought to what I want, and writing the goals down.

The tribe goal-setting technology is RIGOROUS and demands very serious thought, time, and constructive debate on behalf of the goal setter as well as the entire tribe. It is very hard work, and I sense the magnificent results it produces.

Best,

PS: I enjoyed one of the best ski-days of my life this morning at Mt. Rose. Warm, sunny, no crowds, & real snow! (not like that manufactured stuff they got back East) Thank you again for your hospitality.

Thank you for sharing your process.

 

 

Running Late

 

can entrain lots of drama

 

that can mask other issues.

 

Clip: http://www.bombenglish.com/wp-content/

uploads/2008/03/dept-finance-images-bursar-

running-late-pic-tm.jpg

Wednesday, February 25, 2009

 

Latest Research on Diets

 

Ed,

we discussed different dietary approaches. You might be interested in the newest research about diet.

http://content.nejm.org/cgi/content/full/

360/9/859?query=TOC

Conclusion: It does not matter WHAT you eat, but HOW MUCH you eat.

I LOVE to be faster than science!

Best regards,

Thank you for the URL.

Wednesday, February 25, 2009

 

IVTT - Memo: Goals

 

Dear Ed,

 

I am reporting my experience in the IV tribe.

 

Ed tells us to work on writing down our goals.

 

Surprisingly most members seems to have hard time deciding on the goals. I realized its something that I avoid a lot.

 

Ed goes around each member and discuss each member's goals. Soon most members come up with negatives on why he might not be able or want to achieve the goals.

 

Obviously this is my case also.

 

The whole time I was thinking this goal exercises might not be best thing for me. Came up with billion reasons why it might not work for me. Wave of negative ideas was flowing in my head. Then about few hours after the meeting, some how I started to write goals and actually enjoyed it.

 

I feel its a realistic goal and some thing I could actually achieve if I work on some issues. I know it might not be a perfect goal but I feel its one of the best ones I ever come up with so far. I wonder why we come up with negative idea and reasons about goals first.

 

During the meeting Ed says "we all do this, we always do this" Now I feel I enjoy writing down my goals and working on it. I must say though, I was shocked to feel the negative flow about goals in the beginning in my thought, I hope I don't experience that again.

 

Thank you for your sharing and showing us steps to work on goal setting.

 

Sincerely,
 

Thank you for sharing your process.

 

In this series, we are balancing goal-centric living with process-centric living.

Wednesday, February 25, 2009

 

IVTT Memo - Goals

 

Ed (and others),


Greetings.

 

Hope you are well. I just wanted to share my goals with everyone before the meeting. I thank you for your attention.


GOALS: 

 

Right Livelihood:

 

Turn my System that I have been following into a Computer Program Model by end of May 31st, 09 ...

        

Relationship and Body:

 

A. I will be 205 by May 31st and maintain the weight.

 

B. Take a long weekend trip to Florida with my new girlfriend by last IV meeting. Bring pictures.

OK.

Wednesday, February 25, 2009

 

IVTT Memo - Goals



Hello Ed (and others),

Here is a first draft of my goal document. Comments welcome! See you all tomorrow evening.

Goal Statement:


Design an innovative winning trading system that fits my personality. Leverage same into a vehicle that provides me with right livelihood and a lifestyle balanced among travel, work and service.

OK.

Wednesday, February 25, 2009

 

Self-Worth

 

Ed,

You are right. There is a self-worth issue (re: see below). It is holding me back, I can feel it, and I think I know what to do about it.

I wish I could take it to Tribe, but no Tribe around here.

Thank you for the input.

Hopefully, I will see you in April.

Kind Regards,

Thank you for sharing your process.

Wednesday, February 25, 2009

 

IV Tribe Meeting - Experience Report

Productivity Increasing & Noticing Synchronicities

 

Ed,


I entered the tribe meeting interested and excited to see how the new format ( working toward attaining a MEASURABLE goal) would work.


I left the meeting confident that the "tribe was really on to something here" as the idea of having something "measurable" truly forced responsibility and accountability.


Through viewing other's challenges in simply stating EXACTLY WHAT THEY WANT & the tribe forcing me to clearly articulate EXACTLY WHAT I WANT I realized the gap between "spoken intention" and TRUE intention.


When I made the clear, articulate and measurable description of my goal, I physically felt more aware and motivated. Resources to aid in accomplishing this goal flowed into my consciousness. Nothing had changed, except the introduction of a measurable goal.


I returned home that evening to find my girlfriend, visiting her mother in [City], had sent me an e-mail. She stated that she "just had the feeling some big and great things were about to happen for me ..."
 

How do you explain this? I can't. But I have experienced and heard shared experiences so frequently now that I know it is real.


Since that meeting I have completed more tasks toward accomplishing that goal in the past week than in the past YEAR. Incredible people and resources showed up in my life within days of that 1st Tribe Meeting.


I am excited to hear other's experiences since the initial meeting.

Thank you for sharing your process.

 

I have no convincing explanation for the synchronization effect, although I see it often, and even expect it.

 

I do have a name for it: The Under-Fred Network.

Wednesday, February 25, 2009


Temper Tantrums

 

Ed,


When my children have a temper tantrum, I support them in experiencing more anger or shouting louder.

 

It is astounding and fascinating to see how they fully release the whole tension and carry on in a quite different mood.

 

However, what to do if a child starts biting me or scratching my face with his finger nails (it happened indeed)?

 

To ask him to do more of it implies the risk of permanent damage. Can you imagine some course of action?

Anger is a feeling associating with violation of boundaries.

 

Frustration is a feeling associating with inability to reach a goal.

 

If you assist your children in coming to know and celebrate their feelings, they are likely to respond to them earlier, before the underlying situation deteriorates.

 

To assist people to experience their feelings, you might like to set some ground rules, like during your work with them, anger is OK and violence is not OK.

 

 

 

Anger is a Feeling

(conscious awareness of an emotion)

 

that informs us about boundary violation.

 

People who celebrate anger

by setting and observing

clear boundaries

 

may have less occasion to encounter ...

 

 

Violence

 

 

Clips:

http://www.businesspundit.com/wp-content/

uploads/2008/09/anger.jpg

 

http://www.duhaime.org/Portals/duhaime/

images/family-violence.jpg

Tuesday, February 24, 2009

 

New Family Member

 

Ed,



[Name] joined our family today. She is a 10-week old female German Shepherd mix adopted from the Humane Society of [City].

 

 


 

Congratulations on your new family member.

Tuesday, February 24, 2009

 

System Questions

 

Hi Mr. Ed,

 

I am deeply impressed by your philosophy and wisdom on trading and human life.

 

Your thought reminds me of the modern rebirth of the ancient oriental gurus' wisdoms. Especially, you have made me to think about the concept of "right" newly and again. Thanks a lot.

 

I have questions on your "exponential average crossover system."

 

1. Why should it trade from the long side only?

 

Let's see your sentence, "A sell signal issues when the Fast Average crosses below the Slow Average." I think selling-my-position and short sale have the logical consistency between them.

 

2. Again your sentence, "it executes buy orders on the open at a price half-way between the open and the high of the day."

 

If the high were the close of the day, how could I buy my order at a price half-way? I might not study your teaching fully yet.

 

Pls give me your answer.

 

Kind Regards

1. FAQ does not answer "Why" questions.  See ground rules.

 

2. The simulation adds some "skid" to acknowledge execution costs.

Monday, February 23, 2009

 

IVTT Inter-Meeting Memo

Goals-Draft

 


Hi Ed (and everyone),


Here are my goals drafted. Any inputs, suggestions are greatly welcomed.

 

-----

 

I have two areas where I would like to set goals for me:  relationships and trading.

 

First of all I would like to start where I see my problems are:

 

It is very hard to talk about them, because I am ashamed of my faults, defects, shortcomings.

 

I have always had lots of pain, and frustration arising from my encounters of the other gender.

 

Never was able to develop a satisfying relationship with a woman. The ones I really liked usually did not care for me, or in the rare occasion when they did, they proved to be a disappointment.

 

I am very insecure, and feel defective especially when in the company of an attractive woman.

 

At the same time I crave to have a mate, and who is fun, beautiful, healthy, happy, and want to have family with me.

 

My goals are:  

 

1. to recognize my gifts, to start appreciating the good things about me, and also discover the areas where my shortcomings are, and see if they can be improved, so I can gain a strong self esteem. I have to decide whether my poor self esteem at least partially a consequence of the certain things I do which I feel ashamed about (more details at the TT meetings).

 

2. Also I have to find a way to meet this woman I described above.

 

I really liked the goal of getting engaged by the end of the 10 meetings.

 

Another area where I would like to set goals is in my trading.

 

I have been trading for about 2 yrs. I only trade 1 instrument the Russell 2000 index future on NYBOT. I divided my trading account in two halves.

 

One half is being traded by an automated system on a 6 minutes timeframe chart, using RSI and momentum to enter and exit trades, starting at 7:20 am, closing out by 13:05 pacific time: day-trading only. It trades once or twice a day.

 

I bought the raw system, and optimized it  for the last 100 days. This system trades since Jan 2nd this yr and my system account is up about 10%. It has been struggling the last 2 wks.

 

The other half I trade discretionally, when ever I can. It requires my undivided attention, while the market is open.

 

My job ... would allow me to trade maybe once a week all day, and another 2 days for just a fraction of the day. There are 5 setups I use. They have a luck of greater then 50%, and a payoff of between 1:1, and not infrequently 1:10 of more.

 

If I hit my full stop 3 times in a row I am supposed to stop trading for the day: 3 full stop loss is  1.2% of my equity.

 

With my setups, I trade between 2-5 times a day, if I am able to stay with the market the whole session.

 

There are two problems with my discretional day trading:

 

1. When I get interrupted by my other obligations, it hurts my trading, because I lose opportunity.

 

2. My entries are usually great, but my exits are very erratic, I tend to cut my profit short, very short, and this is what hinders my performance the most. I  am able to not move my stops, but I have a trouble to quit trading after 3 losses: 3 losses in a row occurred only once this year, but I lost 2.5 % of my equity that day, because I broke my rule and could not stop until the market closed, and I was certainly not in the right frame of mind the whole time.

 

Despite of all this  my discretional account is up 3.5% since Jan 2nd.

 

I was not trading methodically before Jan 2nd, I was just doing all sorts of  undisciplined instinct trading.

 

As far as the whole with the gains this year  I am a little above break even now compared where I started 2 yrs ago.

 

Sometimes I feel if I could do the day trading every day all day, I could do really well, I could make a living. Sometimes I think, that I am so new and inexperienced to trading, that I might be delusional just to expect that I could be successful in it.

 

My common sense though is very scared, and unsure about it, and suggesting, that I am not ready to give up my job. Financially I am not prepared to give up my job.

 

My goal with the trading is to find a way to trade in a larger timeframe, diversified in 4 different markets, so I can review my signals, and manage my trades after hours, so I can keep my job.

 

I might have to save up more money to increase my equity to accommodate the larger stops necessary with the position trading.

Thank you for sharing your process.

February 23, 2009


Ride of a Lifetime

 

Ed,

 

Trend traders are having the ride of a lifetime. Is it going to get better by getting worse or better by getting better??

Trend Trading concerns with identification of trends and placement of orders.

 

It does not concern about better and worse.

Monday, February 23, 2009

 

Pre-Workshop Correspondence

 

Ed,

Thank you for the reply (and your suggestion to notice what I find important about the performance)

I recall when I watch the performance I am struck by the lyrics. Specifically, I remember the performance bringing up feelings of anger and lack of trust at the current policies of the US government. These policies include the idea that government, (with taxpayer money, or debt, or fiat currency) can and should prop up companies. Also, that the government can and should prop up the price of houses. I remember my thinking is, “this will fail and the US / world economy will recede further and longer with these polices.” Then the feeling shifts to fear when I remember reading that many leaders / advisers believe that the way to bring an economy out of a large recession is with a world war. I remember being fearful what these new government programs mean for our children and if we are heading to ever increasing war.

Right now I feel this fear again and realize I am thinking about the non-existent future. I watch the video again and notice I really like the sounds of each instrument including Jackson Browne’s voice. I notice the feelings of anger, fear and lack of trust are less intense this time.

Thanks again for the email.

Thank you for sharing your process.

 

Monday, February 23, 2009

 

Training Emotions & Experiencing Feelings

 

Dear Chief and "FAQ" Tribe Supporters,

I learn of being laid off from my piloting job, for a third time in my 20+ year career.

I pick up "The Trading Tribe" book once again, and begin to read for a second time, only this time with my wife. Old Freds need reinforcement.

I read FAQ, frequently.

I listen to "The Whipsaw Song," repeatedly.

I learn of prominent motivational speaker, [name]. He seems to provide genuine and very useful encouragement. Many reputable leaders seem to greatly value his work. His message is received well by me, a person with very low self esteem. His message seems to include training my emotions. I prefer the TTP method, of feeling my emotions.

I hope that your life and Essential Tribe are well, Chief Seykota, and thank you for your impact on my life. I try to follow your example, and spread the good will.

Thank you for sharing your process.

 

Some theories suggest you bend your emotions to your will using some form of discipline.  In TTP we come to find the positive intentions of our feelings, such as they are, and to discover our natural gifts.

 

 

Monday, February 23, 2009

 

Intention = Result

 

Ed,

This confirms my intent to participate in the TTP Workshop. Registration and payment to follow by US mail.

Welcome to the Workshop.

Monday, February 23, 2009

 

Workshop & Progress Update


Hi Ed,

Thank you for the TTP Essentials card and for your generosity. Attached is a copy of my registration materials for the Workshop of which the originals are in the post.

As an update to progress on the system development following my email of 25th January please note that the system is now finalized in Excel with the help of a programmer.

 

The objective of this work is to validate results between Excel and the back testing software and to ensure that the system trades according to the rules.

 

I identify a number of issues with regards to the missed trades, timing of trades taken and others which I am currently working on to further understand and clarify. I also continue to work towards programming the system in VBA.

 

My initial observation on multiple instrument tests I run is that the additional rules used to minimize trade frequency and whipsaws also inhibit the system’s ability to be profitable over time. I attach the Excel document for your review. I learn a lot from this exercise which has been an eye opening experience. I enjoy this process and continue work to find solutions and validate if the system idea is could be further developed into a profitable trading strategy.

Thank you for putting up information on learning systems dynamics as I feel that this may be very helpful for non engineers / programmers such as myself. I recently read Principles of Systems by Jay Forrester which was the source of some ideas in writing my system description.

Kind regards,

Thank you for sharing your process.

Sunday, February 22, 2009

 

IVTT - Inter-Meeting Memo:

Finding Right-Livelihood


Ed (and others),


My main goal for this IVTT series is to figure out what I want for my livelihood. I do not know how to measure this goal. I choose a smaller goal that I do know how to measure. In the past, I start from a feeling I want to avoid and search for profitable activities that do not generate that feeling. My goal now is to take an activity I enjoy and make a meaningful profit from it.

Over the last 5 years, I develop an image rendering technique that uses physical objects as pixels in mosaics. In one variation, I assemble an image from a large number of discrete elements, such as dice or bullet casings. In another variation, I use a CNC milling machine to drill out dark pixels in contrasting material. Second variation lends itself to automated production. Both variations use my custom software. As an artifact of relatively low resolution, this technique works best with easily-recognizable images such as portraits, airplanes, cars and animals.

This goal is a useful stand-in for my larger goal of finding a right livelihood. To achieve this goal, I need to overcome two important limitations, and I expect that if I can overcome them here, I can overcome them with other career choices as well. One limitation is making career choices as a way to avoid experiencing feelings.

 

I become a software engineer to avoid awkwardness I feel in social interaction. I start trading as a way to avoid sharing credit and blame with associates, and as a way to prove that I am intelligent enough to predict the future, i.e. to avoid feeling wrong. Another limitation is a block I hit when I can see a clear path to success. I make good, enjoyable progress on my mosaics, right until I see a possibility to profit from them. I then freeze the project and can make no progress on it.

I see several paths to my goal. They are not mutually exclusive.

1. I can market my CNC technique as a type of limited edition printing technology with comparable prices: 16"x20" photo prints retail for $100. Using public domain images, my costs are $2 in materials and $10 in machine time per image. Many suitable public domain images exist, especially of airplanes.

a. I can meet my goal by selling 500 stock image renderings, or 6 per day, directly through a website. This has the added potential of up-selling frames and accessories, at the cost of maintaining a relatively expensive inventory.

b. I can sell 1,000 stock image renderings to a retailer for $50 each.

c. I can contract with a distributor to act as a printer for other artists' and photographers' work.

2. I can produce custom photograph renderings. I can charge 2 or 3 times the price of a stock image to custom render a portrait or another photo a customer send me. This requires a web application where customers can upload photographs, preview renderings and place orders.

3. I can produce larger custom images on commission. I can produce these either using CNC techniques, or by assembling discreet objects into mosaics.

a. I can capitalize on the current green trend by recycling refuse as pixels. One idea for a billboard-sized mosaic is to use discarded CD-ROM disks as pixels.

b. I can produce promotional mosaics for manufacturers or distributors that celebrate their products. Examples: Mars, Inc. (M&M candy), Crayola, LLC. (crayons, pencils).

Thank you for sharing your process.

 

 

Sunday, February 22, 2009

 

IV Tribe - Inter-Meeting Communication

 

Ed (and other IVTT Members),

 

Thanks, [Name] for your sharing your systems dynamics work, and Ed for your comments. I completed a few simple examples in Vensim PLE (free, light installation, light learning curve).

OK.

Saturday, February 21, 2009

 

TTP Workshop

May I ask how long is a series at the IV Tribe?

Also, I'd like to register for the Workshop. I have made flight reservations already, and I plan to mail you the check and the Workshop Application once I complete the one-page essay (definitely before March 15th).

Thanks, and I look forward to seeing you. I am very excited to learn more about dynamic feedback models.

I am currently hosting a 10-week series of meetings at the IV Tribe.

Saturday, February 21, 2009

 

IV Tribe Progress Report: Fund Marketing

 

Ed,

 

Yesterday I tested the fund concept verbally on about 10 CEOs at [a meeting in City].

 

The response was positive. People found it easy to understand the general concept. All are concerned about the impact of recession and govt. policy changes on their businesses and personal finances. Nearly all asked me to keep them informed on our progress.

Good Work !

Saturday, February 21, 2009

 

Radio in His Head

Dear Mr. Seykota,


I struggle with a problem for many years now. I wonder if TTP might be a way to solve it.

I want to stop my obsessive thinking; a deeply ingrained habit which harms my confidence, my creativity, and my mental clarity. Needless to say it has a negative impact on my trading.

Between age 5 and 8, I suffer from seizures in the form of a horrifying altered awareness. Seizures happen when I am in a deeply relaxed state. At age 8 I discover that I can suppress an upcoming seizure by means of mental activity like singing, or strongly focusing the mind. Basically anything but relaxation.

 

I decide to make it a habit to be singing (in my mind), or thinking all day long, and not to fall into a relaxed state of mind for a single moment.

Forcing the mind to be active all the time is very hard and it takes a lot of will power (or fear), but it works.

 

After some time I do it automatically, subconsciously, all day long. It becomes a radio in my head, switched on all the time, no matter what. Even when I sleep the radio is still on. But the forceful mental activity crowds out my other senses. I become introverted, less aware of my surroundings.

 

One day, at age 11, I realize I am never as happy anymore as I used to be.

At age 35 a therapist makes me realize that the underlying cause for the seizures in my youth is not the relaxation, but my frequent thoughts about ‘not wanting to live’ or ‘wishing to be born in a different family’, due to serious domestic problems at the time. Apparently my fears for seizures have subsided on a deep level, because virtually overnight, for the first time in more than a quarter century, I am able to sleep well and wake up rested. The obsessive thinking doesn’t change, however.

Now that I have dealt with the root cause (or so I think) I decide to get rid of the 'radio' by means of meditation. I practice daily for years, I go to a Thai monastery, and I spend a month in a log cabin.

 

Especially the long secluded stretches of meditation give amazing results. It feels natural and it reminds me of whom I really am. But unfortunately it doesn’t stick. After a week I relapse into the old state. Apparently some part of me still decides I am better off with a forcefully hyperactive mind.

Meanwhile, people who ‘know’ me consider me a relatively successful person, or at least someone with a great lifestyle.

Do you think that validating my deeper feelings via TTP can address my problem?

Thank you for sharing your process.

 

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

 

If your therapist concurs, you might consider turning up the volume, again and again until you find you actually enjoy the sound.

 

You might also consider tuning in some other channels, ones that might have important information for you.

 

 

 

Mr. Radio Head

 

has a little human in his mind

 

who refuses to stop chattering.

 

 

 

Clip: http://www.thumbtackpress.com/browse/

images/bobdob0003.jpg

Saturday, February 21, 2009

 

For Love or Money

 

Ed,

I think about being extremely wealthy (let's say, having 300 M EUR or something) and do not feel well about this. It is curious (I don't like being extremely wealthy??). Though it seems to be a minor issue to me, I bring it to the hot seat.

Immediately after explaining the situation to my Tribe I put both hands with the palms together (like in praying) on my nose. It seems a casual movement, but it is the entry signal. (I suggest Process Managers to use absolutely every body motion as an entry signal; sometimes they are not the right one, but if you suggest Hotseat to repeat that movement, he gets disoriented, does not think about the feeling, and frequently the body starts starts showing a form spontaneously).

The process manager commands "Feel that you have loads of money in your account." I find the feeling very fast. After a few seconds I start crying and say "I don't want to be rich!". I realize that I don't want to be rich: I just want somebody who loves me.

 

But since my wife is in the room, I do not complete the sentence.

 

I remember starting trading after the birth of our second child, as my wife is completely absorbed and shows almost no interest on me for several months.

I work further on the form. I realize: "I am a trend trader: I am going to make a killing and leave most traders who do not have a system behind me!" I feel annoyed about guys who are in the market only for the money. They lose the best part: the rewards of accepting the reality, of going with the trend, of doing what is right (increase wealth), of serving other people ...


Some guys just want to have money -> to buy goods -> to medicate their feelings of lacking something essential.

While I thing about this, I start scratching my head. I decide to use it as another enter signal. I keep working on the new form for several minutes and get loads of insight:

- It is foolish to plan a return from a system: I can only decide how volatile it is going to be. As I accept more volatility, the return increases. The design of a trading system, hence, consists for me only in planning how volatile it will be.

- I also realize that it is foolish to try to beat other traders. I would start making mistakes, trying to outguess the market or my system. I just can design my system, apply it and follow the signals. If other guys have better systems, well, I can work on the issue "envy" on the Hotseat and keep pulling the trigger! But as I accept volatility, I include all factors which I can handle (position size, number of positions and so on). I CAN NOT program return.

- I see that I like trading, but due to tax regulations in our Country, it can be more convenient to invest in a fund. I see that to me, trading is just a way of increasing our wealth. If a manager can do it better than I, he should do the job for me. I don't need to play games with the market anymore. But maybe I can do it better than most managers. Anyway, it is a completely rational and mathematical decision based on calculations, not on unfulfilled needs. It is curious: two days ago I did not even consider investing in a fund - and now I am completely open for a discussion about it.

- I see that I don't need to dislike being extremely wealthy. I realize that I will achieve EVERYTHING that I really want and deserve. If I have a very huge amount of money in my account, it is exactly what I wanted. Do I need to feel bad about things that I want? And if I don't have it, well, it means that I didn't want it or didn't deserve it. Should I feel bad about things that I don't really want? Being rich is not relevant, it happens or not. I can use the feeling of "being too rich" or "not being rich enough" or whatever to medicate other problems.

- Finally, I see that there are no "minor issues" on the Hotseat. A small problem shows to be related to my basic needs, to existential questions, to the search for myself.

The next day I do not feel well. I feel like having a hangover; I relate it to interrupting the first form as I see that it is a "love" issue and my wife is in the room. I learn that it is necessary to work on any form until its very, very end. In the morning, I discuss the issue thoroughly with my wife. We have more and more understanding of the needs of each other.

Warmly yours,

Thank you for sharing your process.

Thursday, February 19, 2009

 

Receiver Gains by Helping Hot-Seat

 

Ed says: we are all connect. If one tribe meeting has a feeling in a k-not, we all have a similar feeling in a k-not.

In my Tribe meeting this week, a member takes the hot seat. His issue is that he runs his account up to a certain size, and then loses 9/10 of it by abandoning his system and increasing position size. He reports losing trust in his system. He has gone through several cycles like this.

The tribe asks him to show the feelings that come up when his account reaches his critical size. He shows some forms but has difficulty staying with any one of them.

 

PM asks if Hot Seat remembers a similar feeling in his earlier experience. Hot Seat remembers civil war breaking out in his home country when he is a child in the 1970s. He recalls opposing forces taking and retaking his hometown. He recalls people switching allegiances overnight. He recalls watching in disbelief as people he looked up to torture POWs. He recalls warlords confiscating from the population everything above the bare essentials for "the war effort."

The process goes on longer than I have ever seen in this tribe. I have never been to Hot Seat's country. I have no experience living through a civil war. Yet I feel very connected to the feelings I receive from Hot Seat. I accept his feelings of pain, betrayal, fear and validate them. The Hot Seat has an AHA. He makes a connection between his feelings in war and his experience with his co-workers many years later. He makes another connection between trusting his neighbors in war and trusting his system in trading.

As the Hot Seat describes his AHA's, I notice that they apply to me equally. My experience is different, but my k-nots are the same as his. When receivers help Hot Seat untie a k-not for himself, the Hot Seat unties a k-not for each receiver.

Thank you for sharing your process

Thursday, February 19, 2009

 

Progress

 

Dear Ed,

 

Here is a progress report on choosing my goal.


Thank you for your guidance. Your analogy of "being in the flow" in a state similar to a musical jam, where I experience bliss, the notes are perfect and natural, the crowd is engaged and the music is magical, is what I want to achieve in my career.

In considering which direction to go, I feel formidable resistance. What do I want? What makes me happy? What special light do I possess that I can share with others?

Unconsciously I am satisfied living my life well below my potential. Perhaps I feel I don't deserve it?

 

When I go on a trip I dream of for years, I feel a sense of doom leading up to departure. During the trip I come down with a high fever. Rather than acknowledge praise from others regarding my talents, I usually minimize it, brush over it, or make a joke about it.

 

I feel great fear when I am faced with making a decision on a goal which is leads me closer to right livelihood.

 

On some level, I really enjoy complaining about doing something that makes me unhappy. It's so much easier for me to stay put, anonymous and "hanging on in quiet desperation1.", than do something about it. I want to break the cycle. I want right livelihood. I want to, in your words, "find something I like to do and do it really well (and) directly increase quality of life on the planet and receive rewards in the process2.."


It's been an emotional week. Emotions are tough - tuning out is easy. I come up with several options that feel right. I narrow my choices.

Regards,


(1) "Time", Pink Floyd, 1973

(2) Ed Seykota's FAQ, 11 June 2003

Thank you for sharing your process.

 

You might consider taking your feelings about <not being good enough> to Tribe.

 

 

Right-Livelihood

 

has a lot to do

with sharing your gift,

 

whatever it is.

 

 

Clip: http://www.idealgiftguide.com/

unwrapped_gift.JPG

Thursday, February 19, 2009
 

System Testing Software

 

Hello,

I have been developing a strategy based on the SP500 and energy markets. I need to do system testing and would like some recommendations on system generator software programs.

Respectfully,

FAQ does not recommend commercial products.

 

You might consider starting off with a pencil and paper, and moving up to a spreadsheet program, so you get a feel for the process and a feel for what kind of software fits you.

Thursday,  February 19, 2009

 

Catch the Wave

 

Hello Mr. Seykota,

I think you and the readers of FAQ may find this video interesting:
 

http://www.youtube.com/watch?v=s0Pw7vKtqpo


 

The video features legendary big wave surfer Laird Hamilton. Laird, along with his friends, developed tow-surfing which provides them the opportunity to ride some of the biggest waves in the world. One characteristic worth noting about tow-surfing is that it is a collaborative effort where a group of surfers assist and support each other in riding giant waves.

The massive waves contained in the video are seasonal and appear primarily during winter storms.

 

Currently, there is a colossal storm forming which may generate huge price trends (i.e. big waves) for able trend followers to ride.

Ed, once again thank you for the Trading Tribe website.

Perhaps you and some members of your Tribe can form a Wave Ride Group to assist each other in getting a piece of the ride of a lifetime.

Thursday, February 19, 2009

 

Bailout Dynamics

 

Ed,

 

Here is a pretty good model of bailout dynamics.

 

Bailout - PDF file

 

Thank you for the model.

Wednesday, February 18, 2009


TTP Workshop - Wave Photo

 

Ed,

 

Thank you for inviting me.


Ummmmm, I fear for the safety of the fellow on the wave. He doesn't seem to be in an optimum (optimal?) position ...
 

But then, neither are any of us right now ...

Sometimes the sure thing can be risky and the thing that looks riskiest to the prudent man, can be the safest.

Wednesday, February 18, 2009

 

Wants to Know the Meaning

Hello Mr. Ed,

 

I am still a under graduate student of science.

 

I am a person who is interested in the reason of life, because it is the biggest question ever for us rather then understanding other different phenomenon related to life such as science, emotion, maths etc.

 

I herad about you the you are working in a field related to human behaviour.

 

Can you suggest me direction to clear my mind about this it really matters for me because I am totally confused between life and no life.

You might consider taking your feelings about <wanting to know the meaning> to Tribe.

 

 

When You Share Your Gifts

 

you bring meaning to life

and life to meaning.

 

Clip: http://www.comcrown.com/images/

Giving%20a%20Gift.jpg

Wednesday, February 18, 2009

 

Feelings About Being Rich

 

Ed,


I realize that I have some feelings that I do not like regarding “I am very, very rich”. Most people would say “it is GREAT to be very, very rich.” But somehow I do not like the feelings associated with the idea of being very, very rich.

Hmmm…

Thank you for sharing your process.

 

In  TTP, we work toward celebrating all our feelings.

Tuesday, February 17, 2009

 

Clarifying Heat

 

Ed,


Thank you for your clarification of heat. I am clear now on the various meanings and applications of the versatile word "heat". Your explanations of core equity, and core equity risk management also solidify my understanding. I very much appreciate your writing about it. On studying this further, and while coding my system, it seems as though setting the optimal risk for a portfolio entails an optimal number of instruments to tailor to a desired risk budget per instrument.

 

If I call the fraction of my current core equity, H and the core equity, E, the next risk (R) is E times H :

 

R = E * H

 

From the "Determining Optimal Risk"  paper I see that to calculate bet size (B) for a trade, divide R by the number of instruments, N, and I write it as:


B = (E * H) / N

 

I think of N as the number of open positions. I want to set my risk budget per instrument to a fraction of core equity (r),  and write this as:

 

B = r * E

 

I set this equation for B (risk budget per instrument) equal to the one above it for B (bet size per trade): (E * H) / N = r * E. I solve for N and get:

 

N = H / r

 

If for example, I intend to risk 5% per trade and heat is set to 60%, then r = 0.05, H = 0.60, and: N = 0.60 / 0.05 N = 12 This indicates the optimal number of open positions is 12. To increase H, and keep r constant requires N to increase. To have 12 open positions, my system looks at a larger set of possible candidates (futures markets), since not all candidates will have entry signals or stay in trades. I have H (Heat) and r (RiskBudgetPerTrade) as system parameters and calculate N from them as shown.

 

My system intends to open no more than N positions, and the number of actual positions opened in simulation is frequently less than N, so the system operates below the "optimal risk". I see that to have the possibility of more positions open, requires more candidates.

You might consider, in your back-testing,  allowing the number of positions to vary and then to determine the optimal next bet fraction for an individual instrument.

 

Otherwise, by pre-determining N, the optimal number of positions you risk forcing trades to stay at optimal N.

 

 

In Designing Swimwear

 

and in designing trading systems ...

 

 

 

You Try Out Lots of Things

 

and see which works best

according to your objective function.

 

 

Clips:

 

http://z.hubpages.com/u/266633_f520.jpg

 

http://blogs.reuters.com/wp-content/uploads/2006/08/swimsuit300.jpg

Tuesday, February 17, 2009

 

Going With the Flow


Hi Ed,

Thanks for sending the message about the workshop coming up. I enjoy hearing about what you are doing. I notice I am seeing and hearing a lot of people using the word “flow.”

 

I am waking up frequently in the middle of the night and first thing in the morning with the words “open” and “flow” in my immediate consciousness. Very encouraging movements afoot in the Universe!

Wishing you the fullness of health and joy,

OK.

Tuesday, February 17, 2009

 

TTP Workshop

 

Hi Ed,

 

Did you get my workshop application?

 

Also, when we ride a rogue wave or a tsunami, what sort of surf board / surf vessel do you suggest?

Yes. I have your application.

 

 

In Surfing and in Life

 

it's not the size of your board

that matters

 

so much as it is

how you ride it.

 

In TTP, we practice riding the fine line

between goal and process orientations.

 

Clip: http://www.rothcpa.com/archives/

misc/tsunami.jpg

Monday, February 16, 2009

 

Forgiveness

 

Ed,

 

My daughter has an interesting definition for forgiveness:  Forgiveness is letting go of the hope for a better past."

In the TTP Rocks Process, we For-give the medicinal rock; we give it back to the rock donor. This typically has an enlightening effect on both the Hotseat and the Rock Donor.

 

Forgiveness (in religion, psychology, etc.) involves the conclusion of resentment, indignation or anger toward another person in regard to some offense. It may also involve release of claim for restitution.

 

In the TTP sense, we do not forgive a person for an offence; we ritualistically reject a response pattern and return it to its source.

 

 

 

In TTP, We Do Not Forgive Assailants

 

 

 

We For-Give (give back) Resources

 

for dealing with assailants.

 

 

Clips: http://www.newton.dep.anl.gov/hodgkins/rock3.jpg

http://www.readbangkokpost.com/images/

assailant.jpg

Monday, February 16, 2009

 

Dishonest Advisory Service

 

Ed,


I wonder if you have given this guy permission to use your name.

http://club.ino.com/trading/2009/02/

four-multi-millionaire-traders-share-their-

thoughts-on-trading/

 

"Ed Seykota lives on Lake Tahoe and trades from his office overlooking a view of incredible beauty.  Ed’s living his life exactly as he wants and the gentle philosopher within him wishes you to enjoy the same privilege.  To Ed, it’s a simple matter; if you have a true burning desire, get someone with skill to help you.  [Name] and the “Futures in Motion” advisory service fits the ticket."

 

I don't recall giving any such permission.

 

I wonder if the advisor's practice of misleading people (by implying some sort of endorsement or fit) carries over into other areas of his business.

Monday, February 16, 2009

 

Losing weight and TTP


I find the following link with tips from the Mayo Clinic to lose weight.

http://www.mayoclinic.com/health/

weight-loss/HQ01625


They mention 6 strategies to lose weight successfully lo. It seems to me that the authors are familiar with TTP:

1. Make a commitment

2. Get emotional support

3. Set a realistic goal.

4. Enjoy healthier foods

5. Get active, stay active

6. Change your lifestyle

While a Tribe can help you with Strategies 1 to 3, strategies 4 to 6 are rather your job.

 

I observe that Strategies 1 to 3 (is to make a commitment a strategy?) are essential for most goals.

OK.

Sunday, February 15, 2009
 

Families, Fractals, and Funds

 

Ed,


I notice that your children's names are each individually palindromes and when combined are a fractal. Understanding this makes your poem "Borderline: A Fractal Poem" more meaningful to me.

 

http://www.seykota.com/tribe/fractals/index.htm .

 

May your fractal stay in a range and continue on indefinitely!

The reason I notice children's names lately is that my wife and I are having our first child in April. We discuss palindrome names briefly, but settle on [Name] as our son's name. We use basic trend following to choose [Name] by identifying names whose popularity is on the rise over a long time period. The book we use is called "The Baby Name Wizard" (this name reminds me of another book) :)

In March I launch my first hedge fund ... (long/short equity). The system I use is tops-down, long term trend following which looks first at market trend, then industry trend, then securities trend. Much of my system relies on a Donchian method, which I first learn of through the Trading Tribe site. I continue to gain insight into myself and my trading with each post of FAQ. Keep up the excellent work!

Thank you for sharing your process.