© Ed Seykota, 2003 ... You may not reprint without permission.

Ed Seykota's

Frequently Asked Questions

Trading Tribe Home Page  ∑∑∑  FAQ Home Page & Ground Rules

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Workshop

 

 

August 20-31, 2003

 

Questions

(Quotes from Ed in Red)

Answers

Sat, 30 Aug 2003


Ed:


As the experience of managing a tribe has been positive, I would like to encourage other traders from South America, who might have problems to set up a physical intentional community, to make contact with me. So you might add "Traders from South America may also consult this contact", or something like that, just below my contact information for Palotina Brazil.

Best regards,
OK.

Sun, 31 Aug 2003

 

Now

Dear Mr. Seykota,

I was reading Dale Carnegie's "How to Stop Worrying and Start Living", and in the first chapter he mentions the importance of "now." He uses the example of "Give us this day our daily bread", that the prayer Jesus taught us was to ask only for --- today's --- bread, the beauty of living today fully and not being anxious for tomorrow.

Immediately I remember your quote that we are all a "now" person, in the "now" moment, now and forever. I have such a rush and just go online right away and want to share it. Now let me get back to the book ...

ciao,

OK.

Sat, 30 Aug 2003

 

FAQ correction

Hi Ed,

I sent in a check for the remaining balance for the October workshop. Also, the date on the most recent FAQ says August 17-31; however, the FAQ posts begin on August 20, which overlaps the previous FAQ which ends on August 20.

Thanks,

Thank you for the correction.

Sat, 30 Aug 2003

 

Trading Tribe in Vancouver, B.C.


Good Afternoon Ed.


I live in Bellingham, WA. I am interested in joining a tribe in the Vancouver, BC-Bellingham, WA area. I am aware that there is not currently any Trading Tribe groups in the Bellingham, WA or Vancouver, BC area. I am an individual who is willing to be a charter member of a chapter in the Vancouver, BC area.

Please post this message on FAQ. If you are willing, you may also pass my contact information on to the FAQ poster from Vancouver, BC who wrote "Trading Tribe in Vancouver, B.C." on August 20th.

Thanks, Ed.


Sincerely,

P.S. I have had some amazing changes in my life over the last several months. I expect that the changes are a direct result of principles I learn from reading your website. I appreciate your generosity in providing this forum and your willingness to share your insights.

OK.

Sat, 30 Aug 2003

 

FAQ Error

Hello Ed,

Thank you for the reply titled Jealousy from 25 Aug. You left my name on the email when you posted it to FAQ. Please remove it from the post.

Done. Thank you for catching the error.

 

 

 

Skillful Receiving

Can be Transformative

 

http://brujosdoblea.com/

images/catcher.gif

Fri, 29 Aug 2003

 

Drawdowns and Losses

Hello Ed,


I have a question, concerning drawdowns and losses. I apparently do not understand the differences between the two!


How can one endure a drawdown of a given magnitude, and at the same time "employ" a cutting your losses strategy, the two ideas / concepts seem contradictory to me, therefore I must not understand the distinction between the two concepts! Can someone enlighten me?

Love your site, and am very grateful for your it, Thanks so much!!

You cut losses on individual trades.

 

The reduction in value of your total equity, from a previous high point, is your drawdown.

 

If you find yourself enduring drawdowns, you might take the feeling of having to endure into TTP.

Fri, 29 Aug 2003

 

Attending Workshop

Hello, I recently passed my series 3 brokerage exam. I was pursuing employment as a broker to learn the ropes. But the more I learned the more I didn't like what I saw.

 

I have many people waiting to drop money on me to invest. For now I have them in a holding pattern. I would like to learn and train to start my own hedge fund. I am in my infancy but I'm willing to do what it takes to learn and be successful at it. I have a vast pool of clients from athletes, entertainers, club owners, small business owners, and everyday people wanting me to do something with their money.

 

Instead of me opening accounts for them with other firms and letting the reap the profits of my clients. I desperately seek the knowledge to do this myself.

 

I used to be a rapper in the music industry (Tag Team / Whoomp There It Is!) and still have all the ties because I DJ in the hottest nightclubs in Atlanta.

 

Can you please steer me in the right direction. Whatever sites I can go to, reading material, trading seminars, anything you can recommend would be greatly appreciated. I definitely would like to attend your workshop. I am 100% dedicated to achieving this goal. I graciously ask for your help.

Instructions for attending the Workshop appear on the Workshop page. 

 

FAQ does not endorse commercial products.

 

You might find lots of free basic information about trading at www.turtletrader.com.

 

 

Thu, 28 Aug 2003

 

Workshop

Dear Ed:

I would very much like to attend your workshop October 24--26 at Reno/Lake
Tahoe. I sent you an email the other day and thought I would wait for you
to reply before committing. However, I'm concerned the workshop might fill
up. So please, reserve me a spot.

I am printing and signing the workshop page and sending you $1000 as you
request. I very much look forward to meeting you and the fellow attendees.

Sincerely,

OK.  At this time, the Workshop still has room.

Thu, 28 Aug 2003

 

Starting a Community

Dear Ed,

I would like to start an Intentional Community. I feel I could gain a lot of insight and understanding about myself using TT.

I live in Cumbria in the UK (a long way from London). I don't know of any traders locally apart from a friend, who have asked to look at your site and let me know if he is interested.

A truly enlightening site.

yours sincerely,

 

 

Welcome

Cumbria, UK!

 

You are on the directory page.

 

 

Thu, 28 Aug 2003

 

Satellite View of the Blackout

 

I thought this was interesting and hope you will as well.

 


Thank you.

Thu, 28 Aug 2003

 

I Don't Get It

How come you trade daily bars and how come you use Donchian's stuff? Don't you know better?

 

About 4 years ago - when I started trading the concept of trend following helped a lot but to TF with daily bars is NOT the best solution.

 

You have to find out which markets vibrate on a daily basis and which base on an intra-week basis.

 

I don't day trade. I follow as many as 18 trends a year in 4 dif markets. One of them I trade with pure swing methods. Either you don't know or you are no big deal despite the advertising and press coverage. Hey! I could care less. I find your site an exercise in mirroring (read Lacan to find out).


Me thinks you are quite vain and arrogant.
Study the enclosures and progress man. You're still in the pre-history of psychotherapy man - Fredian s---!
ah ah ah Tried some Gestalt man?

You might consider taking some of your anger into TTP and allowing it to convert to good vibrations.

 

 

 

Staying in Touch with the Markets

with Daily Vibration

 

ask about our slip-on attachments

for CBOT, NYSE and NASDAQ.

 

Thu, 28 Aug 2003


E-community

Ed:

In our tribe we have been practicing the TTP by e-mail, as we live far apart from each other. Basically we use SVO-p in our sessions and verbal mirroring and pacing. Below is an example with a fellow member, where I am receiving.

As the experience has been positive, I would like to encourage other traders from South America, who might have problems to set up a physical intentional community, to make contact with me. So you might add "Traders from South America may also consult this contact", or something like that, just below my contact information.

Best regards,

----- some interchange, below ----


Very well!!!

 

-----

Exactly. My Ego is an obstacle to follow the trend and being disciplined. My Ego wants to be right not wrong. In the flow there are not right or wrongs ...there is only flow...
I feel better now.

 

-----



OK. I think I get it. When I have to take a loss it hurts my ego and it makes me feel depressed.

 

-----

 

I feel depress in this situations specially if I have to take a loss. I recognize my Ego working here. Taking a loss hurts my Ego.
It is different with the e-banking sistem. No humans, I am alone with my ego, nobody cares what I am doing ... is much easier...

 

-----

 

OK. I think I get it. I don't like to speak with my brokers and listen to them, and so I have problems calling them to place my orders.

 

-----


OK lets go!

 

-----

I don't like to phone to my brokers. Generally i don't like to speak with them and I don't use their opinion. But they are necessary to execute the trades! . But generally I have problems to pick up the phone and give them the order. The whole action of executing the system seems in those moments like a big and heavy stone to lift. My feeling is like not having energy to phone. Just opening the address book to find the phone number is a big work to do. Instead of this when I use another brokerage account which is e-trading (no humans ) I execute the stops loss very fluently...

OK

Wed, 27 Aug 2003

 

Blindfold Trading

 

Dear Ed,

I only recently started trading a newly developed system when I went onto a long and hard-earned vacation. It has been suggested time and again, that you should allow for your holidays to be a time away from the markets. Since I am trading a completely mechanical approach, for which I need less than 10 minutes a day to evaluate a few numbers and place an order, I decided to blindfold-trade during my holidays. That means I would follow my system without giving attention to the markets or evaluating my performance. Of course my system got built-in risk and money management, so I know I will always stay on the safe side.

Now, I am finally back home and I am more than pleased with my results. Actually I didn't make too much money during this time, but the statistical properties of my system are slowly converging to their back-tested values. To me, this is much more important at the moment - proving the validity of my system. If my system proves valid, its money-making aspect will take care of itself later.

I can wholeheartedly recommend this experience to anybody with a suitable trading approach. It's not only about not losing time during your holidays, but also about giving you confidence that it doesn't make a difference idly watching them quotes or relaxing in the sun.

Thank you for freely sharing your trading experience with us

OK.

 

 

 

Essential Trading Gear

 

for the fashion conscious

Ninja Trader

 

 

Clip: http://www.in-focus.org/

in%20focus%20site/

dossier%20images/blindfold.png


Wed, 27 Aug 2003

 

Math

Hi,

I'm just wondering how much science, mathematics, calculus and statistics background is necessary in order to
understand some of the dialogue that I read in regard to trading.

 

It seems to me after having read the section on risk management, that one definitely needs a stronger background in these and other subjects than I have.

 

Maybe I should break out the books huh?

Thanks for your consideration of this e-mail!

If you feel inadequate to the task of understanding the risk article you can (1) lease some more brain power (2) wear a fancy math hat, or (3) take your feelings about not understanding things into TTP.

 

 

Neuron Farm for Sale or Lease

 

Clip: http://www.educause.edu/pub/

er/erm99/images/erm9902_thompson.gif


 

 

Fancy Math Hat

 

Clip: http://www.fbi.gov/hq/cid/fc/

fifu/intellectual/images/ipcmural.jpg

Wed, 27 Aug 2003

 

Risk Management

Hello Mr. Seykota!

I have found your essay on risk management most interesting. Is it possible to get that document mailed to me as a file?

I would be very grateful!

Best regards

You may reprint the article if you credit Ed Seykota's FAQ and include the URL to the site.

 

Yes, I would be willing to mail it to you, anywhere in the Continental USA for, say $1,000.00 per copy. Let me know how many you want.

Wed, 27 Aug 2003

 

Anxiety

Dear Ed:

A few months ago I discovered your web site, found it intriguing, followed it for a while then quit reading it. My style of trading has been scalping stocks.

 

Sometimes I hold to the end of the day -- I rarely hold overnight.

 

I was pretty successful 1998 through 2001 -- made about 600k through that period, including what my wife made trading my system.

 

Not bad for a former stockbroker with three kids, $50K equity, trading out of the spare bedroom. I used a completely mechanical intraday system, developing a program to search the stock universe for certain setups.

 

Rules for everything. Of course, by mid 2001, the system had stalled out. Tight disciplined stops ensured that I never lost much (although our lifestyle did eat into the profits). After breaking even for 2002 (I paid my broker something like $125K in commissions!) waiting for my system to resume its profitable ways, I concluded that my system was, for a variety of reasons, obsolete.

 

This year I've tried several intraday approaches with little sustained success. Couldn't identify an edge. I finally reached the point where I needed to prove I could consistently turn a profit--any profit. I found that by focusing on one symbol and using very tight stops I can consistently scalp for small profits. Small gains. Small losses. Small profits. Lots of trades/commissions.

Cutting to the chase, I think I have an ulcer. Yeah, I know they're not supposed to be caused by stress.

 

Nonetheless, every time I even think aboutsitting in front of the screen, my stomach churns and my legs get jumpy. One of my molars recently cracked from clenching my jaw at night.

 

I work out regularly, watch my diet, concentrate on my breathing, yet the adrenaline inexorably creeps into my day. When I traded my system, I used hard stops & each trade was essentially meaningless. I knew that over the course of 100 trades I would make money. Now each trade feels important. Yesterday I made a few hundred bucks staring at the monitor open to close. Felt tired buy pretty good afterwards. Today I lost a hundred bucks after commissions running some forty trades. I felt completely spent, emotionally drained.  I'm up like $10K for the year. I might as well have a paper route.

My wife, after being my trading partner for several years, now has a good non-trading job, so I don't have so much immediate financial stress anymore. (Sold our house, paid off all debt.) However, I hate trading now. When I quit the brokerage business just six years ago, I was so in love with the idea of independent trading, I had limitless energy for research and back testing. Now I can't muster much enthusiasm for the trading game. It's become a detestable job.

So this afternoon I was clicking around and changed a 5 minute chart into a weekly chart. Stared at it a while. Looked at more weekly charts. There and then I said to myself, that's it, I can't continue with the tick by tick trading. My only hope for trading survival is to lengthen my time frame, get away from the screen. A trend following system of some kind. Build it from scratch. I'm pulling the plug on the tape reading and day trading even though it's the only way I've made a living since 1997.

As I was walking upstairs last might, I thought of your site. I remembered you said something like "all successful traders eventually turn to trend trading." I logged on and read it all. Good stuff. You seem to have no conflict of interest-- you seem to genuinely want to help people. Not sure what I'm asking from you. A pat on the back? A kick in the ass? Maybe tell me it's time to get a real job. Can a burned-out day trader successfully convert to trend following. How do I proceed?

A thought or two from you would be great. Thanks.

When you learn to experience the feelings of stress and anxiety directly, you no longer need to day trade to feel them.

 

 

When Fred Wants You to Feel Anxiety

 

You can go direct ... with, say, TTP

 

or get there by trading.

 

Clip: http://www.ericfox.net/

images/anxiety.jpg


Wed, 27 Aug 2003

 

Highbrows


The "process" which you describe as "Trading Tribe" would raise the highbrows of many good psychotherapists including some of the finest psychoanalysts with several years of doctoral and post-doctoral experience both in the UK and at your own country.


You need to read quite a bit more to get to the door of the role of the unconscious as you have attempted (but failed) at describing.


Basically, the most successful approaches to pathological behaviour and phenomena (see what pathological means in a good specialized encyclopaedia because it doesn't necessarily mean "sick") involve a mosaic of theories without giving any a presidential role.


I have shown some of your writing to senior researchers including some of the brightest doctoral students at my University here in London and they tell that the information is actually wrong. As I have indicated to you I'm a doctoral student in the social sciences and my thesis deals with "trading".


I can quite understand if you don't wish to reply to my previous questions:


- How much do you charge to manage money
- Do you make only 60% a year
- has the book by Schwager helped your business sine you were unknown prior to its publishing ...


I have interviewed a number of traders in Europe and have seen their statements. I have a small group of people who make a lot more than you (60% a month) and who dispute your methodological opinions entirely. In any case your replies aren't essential to my research.

Kind Regards,

TTP protocol does not include telling people what they need to do.

 

You might consider experiencing your feelings of inadequacy, with TTP, rather than having to act them out.

 

 

 

Doctor Doggie Highbrow sez:

You're barking up the wrong tree ...

 

'cause I already marked it as mine ...

and it's growing faster than your tree ...

and I don't even care, anyway.

 

Clip: http://www.lilaclane.com/

americaneskimo/alex/intellectual.jpg


Tue, 26 Aug 2003

 

Tingling

 

Hi Ed,

Just started with the [xxx] tribe a while ago and had our second meeting tonight. Even though I felt like I had some knowledge in this area, still pretty surprised by results. I was the sender and thought (or at least CM did)

 

I had a trading issue to discuss. Instead of my "issue", out came a story about my dad!!! Even writing this, I'm experiencing tingling (mostly on the right side) of my body.

 

This is kind of scary, seeing "right out there" what Fred's really thinking ...

 

thanks Ed, looking forward to continuing the process.

TTP has a way of moving your attention to the real issues.

 

 

I really like it when

you talk about naked options.

It gives me the tingles.

 

Clip: http://www.seenit.com/

shopping/HB1.gif

Tue, 26 Aug 2003

 

Trading Tribe Workshop

Mr. Seykota,

I wish I had discovered your process sooner. But it is never too late. I still have time and things to learn from someone like you. After a decade of investing, I have come to realize the importance of trend following and have become a firm believer.

 

I was a proprietary trader on Wall Street and
a portfolio manager at [XYZ] and [XXX].

 

Currently, I run a hedge fund in San Francisco. I studied chemical engineering and earned a graduate management degree (SM) at MIT.

I would like to attend your October workshop. Please let me know so I can
mail in the payment. Thank you.

Welcome!

 

 

Some of it  

 + the rest of it  

 -----------------  

            all of it  

 

 

First Law of Thermodynamics

 

more or less

Tue, 26 Aug 2003

 

Permission to reprint?

Mr. Seykota,

I knew you were a famous trader when I read Schwager's book years ago. I mentioned you in one of my earlier letters as someone worthy of great respect in the trading world.

 

But I had no idea you had done such deep thinking about the psychology of trading -- to the point where you could so successfully communicate to others the way you do on the Trading Tribe Process web page. I am no expert, but I think that when someone can convey something to others in simple and understandable terms, it means they have a true and profound grasp of the subject.

I have a little newsletter I began to write July 2001.

I would like permission to reprint with attribution of course, some of the wonderful ideas you have about the psychology of trading.

 

I write a four page letter every month ... since I don't get to talk too much about the details of the proprietary system, I discuss things like getting into a good mind-set for money management, finding the discipline to save money and adhere to a system, things like that.

Your understanding of psychology as it relates to these things would be a wonderful thing to pass on to my subscribers. You're an inspiration to me. I'd be happy to send you a copy of the market letter if you wish to see it.

Thank you.

Yes, you may reprint an occasional sample from FAQ, such as a line or two, if you credit Ed Seykota's FAQ and include the URL to the source page.

 

If you sell your newsletter as a commercial product, you may have to pay license fees to reprint internet clips.

 

I offer no opinion on this so you might do well to seek advice of counsel.

 

 

The Trading Tribe

 

Mon, 25 Aug 2003

 

Jealousy

Hello Ed.

I got a job in the industry. After a year of self-trading. It is in sales. I'm OK so far. I didn't tell them about my personal trading until after i had started. They were impressed and put me on the fast track for my series 3.

I feel jealous when i am with my girlfriend. Anything to do with others sex or music makes me jealous. I always hated feeling jealous. I would avoid relationships when i felt jealous. Break up with the girl, move on. I would stay in relationships when i was not feeling jealous, but i never cared. What could be the positive intentions of jealousy? It is a terrible feeling in the pit of my stomach. It makes me angry, cynical. I love her but i can not stand feeling jealous...

I am debating attending the workshop. I want to go. I need a tribe. I want to learn about TTP first hand. Since starting trading I have withdrawn about 10K. I started with 16K. I now have about 25K. It is not all my money, only about 7K is. I spent money paying off debt. I dropped one client. I want to let my equity build, but i want to learn too. I have always had a problem with procrastination.


Thanks for listening Ed.

Whatever feelings you can't stand wind up running your life. Whatever feelings you like become your allies.

 

One result of TTP is conversion of feelings from enemies to friends.

 

Note: when you think about joining the Workshop, your unresolved feelings may come up.

 

 

Even Jealousy

has Positive Intentions

 

 

Ckip: http://www.sullivanet.com/

pirateisland/myart/jealous.jpg

Mon, 25 Aug 2003

October Workshop

Ed,

I will be attending your October Workshop. I have booked my flight and will be mailing my check today or tomorrow.

OK.

Mon, 25 Aug 2003

I wanna go!

Ed said: Books Work Better when you read them.

I am somewhat a compulsive buyer of books. I buy a lot of books I never read completely, from beginning to end. I only read the very few ones I consider to be the best and essential reading, and keep the others for reference.

 

I keep searching for the best book, information or knowledge. This need or feeling of wanting to have the best, perfect book, knowledge or information is so great that I seem to be in a perpetual, never-ending quest for the Philosophical Stone.

 

I look everywhere and can't find it, but I need, I have to and I want to find it and so I keep searching voraciously, intensely.

(Continued)

The feeling is greater than me. I feel like being into high gear, into hyperactivity. I urge to be into high gear, like the frantic rhythm of trance music. And it's pervasive to many aspects of my life.

You might try taking your frantic feelings into TTP.

 

 

 

Please oh please help me

 

I need the perfect book.

 

 

Clip: http://www.conterra.com/

bookter/loni/frantic.jpg

 

Sun, 24 Aug 2003

 

Trend Following Startup

Mr. Seykota:

After working as a high yield analyst for [XYZ] ('96-'99) and launching my first startup hedge fund ('00-'02) through the tech bubble peak/crash, I have learned firsthand the value and opportunity in systematic investing. I am contacting you regarding a systematic "trend following" strategy that I have developed and my efforts to raise seed capital for a startup hedge fund or to bring said strategy in-house to a larger firm.

Early this week, a full PowerPoint presentation including a back test over 11.6 years will be available. Please let me know if you have any interest.

Thank You,

Good luck with your start-up. FAQ does not endorse Traders or Products.  See ground rules.

Sun, 24 Aug 2003

 

Report from a Visitor

to the Incline Village Trading Tribe

Ed,

... It was nice to meet you and the other tribe members and to so closely experience the Incline Village version of the Process.

Yes, I did significant work that night. I am already noticing some changes and there are more to come in the coming weeks I am sure.

 

At the end of the process when my awareness turned more towards the group, I was struck by the warmth and caring I felt. Pretty amazing since I had only known most of the members for an hour or two!

Thanks again and thanks for the invitation. Please know  that you are also welcome any time that you are in [my] area.

 

All the best,

OK.

Sun, 24 Aug 2003

 

People of the Lie

Hi Ed,

Thought you might like this link:

http://www.turtletrader.com/

people-of-the-lie.html


Thanks for the book recommendation.

Yes.

 

 

Knowing How to Deal with Evil

 

can help you select

good people into your network.

 

Clip: http://64.95.118.51/images/opti

/e9/eb/0684848597-resized200.jpg

Sun, 24 Aug 2003

 

Finally feeling it

Dear Ed,

The stock market has been chopping me back and forth for weeks. I am paying close attention however, and am faring O.K.

 

I was long a few issues that broke out, and reduced them immediately as the market deteriorated. I ended up taking some small profits. I usually like to hold at least a few weeks for a larger profits. As you can see, the long positions I have taken seem to breakout and fall right back down with good volume. I have not been able to hold long positions with any confidence recently. I am finding myself weighted towards the short side again. The healthcare providers are in my focus.

 

Shorting is becoming more frequent and comfortable for me lately. These are my latest positions below. The charts of the healthcare providers that I shorted below look like they may have some good profit potential again. I e-mailed you how I shorted them a few weeks ago. I now have reestablished some of those short positions. They are beginning to fall from the first base established after the first drop from the all time highs for this group of securities.

It is really nice to see the news talking about a rebound in the job market and stocks and the economy getting better while I can think independently and short stocks that should go up according to the news. It is obvious they are on a downtrend! If these stocks take a significant fall some investors will know the reasons why too late.

If these fall even a few points I will have broken a monetary range that I have been stuck in for a few weeks.

It is really nice now knowing that all I have to do is go along with the market and cut the losses quickly. I can always reestablish my positions. I just need to latch on to a sustained move in a trading vehicle and the little losses will be taken care of. I feel I am flowing with the market now! I worthy of good trades and deserve to make significant money trading (Re E-mail Tuesday August 19 2003 Titles "Cutting losses and feeling foolish").

 

I have worked hard enough for years at trading / investing to deserve the rewards.

Thank You

If you are relying on confidence as a trading tool, you might be risking jumping your system.

 

 

Hard Work does not Guarantee Profit

 

and one man's hard work

might be another man's recreation

 

Clip: http://harkin.senate.gov/images/

bio/work-day-construction.gif

 

Date: Sat, 23 Aug 2003

 

Tribe essay

Dear Mr Seykota,

Attached is my resume and a brief essay of my understanding the tribe process.

Thank you in advance for your consideration,

Sincerely,

-----


Everything in life moves in cycle and everything is in life in one way or another is trading , but almost nothing in life and nature cycle on there own.

Birds cycle to different areas together, they are stronger together and can help guide each other.

Waves are collective drops of water that together can be powerful force, one drop on its own can create so much force but millions of them in one collective harmonic movement create incredible force, incredible power.

Even some of the oldest and strongest predators move together, nothing in the world can survive on its own, even in this day and age when you can be in constant contact with fellow traders, fellow doctors and any other profession, working in isolation will often not work, the information is there yes, however application of that information often involve emotions and is no different today than thousand of years ago; the more advance we get the more we don't change as human beings we are still emotional and still need each other to overcome problems, grow and prosper together, it is the life experience and the assurance from each other that make us grow, gives us confidence and inspire us to move on.

I would be happy to be in such a group and this is precisely why I am writing this letter,

Thanks again,

If you wish to join or start an Intentional Community, see the Tribe Directory page.

 

 

 

A View of the H20 Collective

 

Clip: http://www.washington.edu/

computing/windows/issue18/graphics/

rain.gif

 

Fri, 22 Aug 2003

 

Freud & Ed agree on wish fulfillment

"Everyone has wishes that he would prefer not to disclose to other people, and wishes that he will not admit even to himself." -Sigmund Freud

"Everyone gets what they want out of the markets." -Ed Seykota

Taken together, these two quotes have very interesting implications on the behavior of market participants, i.e. everyone gets what they want and those of us who lose typically do not dare venture into the abyss of our minds to check whether we might wish loss upon ourselves. (Monetary Masochists)

If we equate money with value or worth, and we tend to feel that we ourselves have little value or worth, then we will either consciously or subconsciously make attempts to eliminate our wealth, and to bring our internal view of self into the external world as a dramatization, realizing our objectives thereby and subsequently validating Ed's and Freud's theories of wish fulfillment.

Indeed, I have observed these behaviors in my own actions throughout the course of my life. In general, during periods of intense self-depreciation, I have tended to sabotage my own efforts so as to bring about failure. I would even look down upon myself for looking down upon myself.

I have taken these feelings of low self-worth to the process, and I am on the road to recovery from self-sabotage.

 

In addition, I have recently considered another issue that I had not originally accepted as plausible. After investigating my childhood, I now consider it a possibility that parents, friends, relatives and teachers may have even fostered my self-depreciating tendencies beginning at a very early age.

 

Whether this was consciously intentional does not appear to be a useful point upon which to speculate.

Being that you recommend Toxic Parents I thought you might share some thoughts on this topic.

Experience your feelings and they tend to disappear. Repress them and they tend to run your life.

 

 

Elmer "Sigmund"  Fudd

takes his childhood bunny into TTP

and, presto, it disappears.

 

Now where did that pesky wabbit go?

 

Clip: http://www.qsl.net/fudd/fudd2.gif

 

Fri, 22 Aug 2003

 

Choices

Ed Said: You might notice you can control risk by stop placement and position sizing.

Yes. And not least important by portfolio selection. I have a tendency to shrug off markets which I consider to be too "slow" or boring, and long for the wild action. Indeed, sometimes I do succeed in getting it.

Inability to tolerate boredom can lead to jumping your system. You can take the feeling of boredom into TTP to find out more.

 

 

Ho Hum ...

 

Now I wonder what I can do to make things a little more exciting around here?

 

Clip: http://www.outofbodies.com/

sketchbook/bored.gif

Fri, 22 Aug 2003


Believe

Do you believe that your trading system surely makes money in long period
(for example, 10 years and 20 years)?

I can't believe that my trading system surely makes money in long period. I only think that it is profitable.

A Trend Trading system guides a process. It does not predict profit or generate assurances.

 

 

Standard Guarantee, from

Ed's Stock Exchange

 

If you don't like a trade, even after a few weeks go by, simply bring it back and get a full refund.

 

Clip: http://pandecta.com/guarantee.gif

Thu, 21 Aug 2003

 

Necessity as a Trading Metaphor

I use Necessity (me) and the weird sisters (computer system), her daughters, as a trading metaphor.


Mythology is abundant in scenarios in dealing with markets.


I love your site.

Thank you.

Thu, 21 Aug 2003

 

Trading Tribe Workshop - MIT alum

Mr. Seykota,

I wish I had discovered your process sooner. But it is never too late. I still have time and things to learn from someone like you. After a decade of investing, I have come to realize the importance of trend following and have become a firm believer. I was a proprietary trader on Wall Street and a portfolio manager. I run a hedge fund in San Francisco. I studied chemical engineering and earned a graduate management degree (SM) at MIT.

I would like to attend your October workshop. Please let me know so I can mail in the payment. Thank you.

Instructions for attending the Workshop appear on the Workshop Page (see above).

Thu, 21 Aug 2003

 

New Emotions and Labels

Ed,

I made my first successful trend following trade today after struggling more than six months unsuccessfully day trading the forex market ...

How do you deal with new emotions called: joy, excitement, exhilaration and happiness? The same as fear and greed?

Kind regards

If you are having trouble passing feelings, even excitement and joy, you can take them into TTP.

 

Exhilaration, fear, greed, etc. are generic labels ... for feelings that people seem to experience in very different ways.

 

With TTP, you can experience the specific properties of your feelings (size, color, texture, temperature, pressure, etc.) rather than just apply a label to the ensemble.

 

 

Labels are Great for Shipping

 

and not so good

as a substitute

for fully experiencing the contents.

 

Clip: http://www.intel.com/support/

processors/sspec/label.gif

Thu, 21 Aug 2003

 

Goal Setting and Visualization

Hi Ed,

In your Market Wizards interview you said 'One of the best ways to increase profits is to do goal setting and visualizations in order to align the conscious and subconscious with making profits'.

Would you care to elaborate on the technique used?

In our group we think it is a good idea to incorporate visualization in our pre-TTP relaxation routine. So I asked everyone in the group to come up with their individual goals. From what I understand emotion is a key component of effective goal setting. We are excited about our goals and are able to see, feel, smell, taste and hear the end results.

For example my goal is a house by the beach in Northern California. I am able to see the glistening blue water from the rocky shoreline, hear the crashing waves and the seagulls flying above, smell the salty air, feel the sand beneath my feet and taste success.

What do you think Ed, are we doing it right? If you could kindly refer us to any book or material it is greatly appreciated.

Whatever you think you can do, begin it. Boldness has Genius, power and magic in it. -- Goethe.

You can find many books and articles on Goal Setting and Visualizations.

 

You might notice your goals are a bit ambiguous ...

 

You say: Goal = House. That might mean you want to own the house, rent the house, live in the house, build the house, paint the house, continue to have really good tasting thoughts about the house.

 

You might take the "taste" of success into TTP and track it towards some clarity about what you really want.

 

 

Engaging Your Senses

 

in a house by the beach.

 

Clip: http://www.travelbuddiesworld

wide.com/images/Out-House.gif

Thu, 21 Aug 2003


I Will Be Back

Hi Ed,

I hope all is going very well with you and the Tribe. I just got back from France, where I got married in Normandy. It was as beautiful as one could imagine with the only exception being the heat was a little much.

Iím making every effort to get right back into the swing of things and schedule time to make it to the Tribe every other week.

I will let you know as soon as I can actually make it back, but Iím shooting for the end of October. (I believe on October 30th)

Please give my best to everyone at Tribe and let them know that I will indeed be back as soon as I can.

Thanks Ed, and I certainly appreciate you taking the time to talk with me after my market thrashing last month. Thanks!

Congratulations on your marriage.

 

Your note seems to convey the same degree of commitment as (1) your intermittent attendance record and (2) your intermittent ability to stick with your risk control. 

 

Intention equals results, effort does not equal performance and soon is somewhere in the non-existing future.

 

The members of the Incline Village Trading Tribe rely upon each other for steady attendance and for full participation.

 

I suggest you write a letter to your new wife, describing your view of what your marriage vows mean ... before you apply for re-admission to the Incline Village Trading  Tribe.

 

 

The Prodigal Son Returns Home

and receives a welcome.

 

He still has to re-apply, however,

 to the Trading Tribe.

 

Clip: http://www.persianwo.org/35.jpg

Thu, 21 Aug 2003

 

Wizards

Mr. Seykota:

Can you confirm the following please?

1. Your average annual return is 60%?
2. Your account is sized USD-100M?
3. You charge more than 10% commission every year?
4. Have you or have you not benefited from having been included in Schwager's book?

Also, what exactly is your formal training in psychotherapy, psychology or social work?
Please be as extensive as possible.

I am a PhD candidate at U. of London, in Social Sciences. My Thesis is: "Trading the markets: a paradigm of the 20th century?"

 

I do not hold myself out to the public as a money manager or solicit accounts.  I do not offer or promote any funds for sale. I do not endorse products.  I do not discuss my own trading results or track record on FAQ.

 

My formal training in TTP is zero ... as I am its inventor. My in-formal training comes from working with the process, sometimes as leader and sometimes as a participant ... and from reviewing the emails to FAQ.

 

If you consider trading to be the paradigm of the 20-th century, I wonder what you consider the paradigms for the 19-th and 21-st.

 

 

 

Given a stack of N dimes,

 

how many different

pair-of-dimes

can you make?

 

Clip: http://www.ofpp.org/pages/

financial.htm

Thu, 21 Aug 2003

 

A Short Paranoia

I havenít seen this mentioned in the FAQ. It is not in the class of frequently asked questions but in the class of frequently experienced non fills.

I assert that short positions are more risky than long positions. Short positions depend on how many shares are available to borrow. When plungers load up with shares there are no shares available to short; however when there are shares available to short, the short positions seem to have a higher probability to whipsaw. I did not see this mentioned in the risk management, and was thinking that is would be worthy of a comment or not.

I enjoy the tribe website ó fun and informative!

In general, over the life of a winning trade, long positions increase in volatility while short positions decrease in  volatility.

 

So, for equal price moves, the long trade has a higher signal-to-noise ratio at inception.

 

Risk has to do with many factors, including how compatible you are with your system.

 

 

Computing Risk

 

can be dicey.

 

Clip: http://www.zurichkemper.com/

planning/risk.asp

Thu, 21 Aug 2003

 

Going With The Flow


Ed Said: You might find some joy in the process of allowing feelings and markets to come and go as you experience them.

Yes. When I started participating in the Trading Tribe community I already had an understanding that the outer world is usually a reflection of the inner world. Then, instead of working with trading issues, I went the other way around and worked primarily with dramas in the context of my relationship with myself, other people and life.

In the Process I have learned to re-frame feelings as friends and it feels really good.

 

Unfortunately I also found that I have some history of emotional invalidation and that I've been carrying out this drama into my life. So, when comes to going with the flow of my true feelings, I feel like a baby making his first timid, hesitant steps to discover a whole new life.

I also feel that Ed, just as Fred, is a great friend. Thank you for you support.

Yes. Re-framing feelings as friends is a big step.

 

 

When You Can Experience

Your Baby Shoes

 

You leave them behind.

 

 

Clip: http://www.infanttoddlerconsortium.org/

work/bsteps.html

 

 

Wed, 20 Aug 2003

 

Rewarding Myself

Dear Ed,

Regarding my e-mail to you entitled "Cutting Losses and Feeling Foolish." on Tuesday August 19, 2003.

You are right about the self worth. I always had an inferiority complex when I was a kid. It sometimes comes back to haunt me ... I think you might have hit home on something! I feel an "AHA" may be on the way. I need time to think about this in more detail. I feel one coming but not here yet ... like some positive excitement or pressure building. Could this be true? Thanks again.

I decided to reward myself with a possible nice trade in xxx today. The short and long term chart look very good to me. I have not seen one like this in a while. One of my brokers bought this one several times and had to sell out and cut his losses. About a week ago he said he hated the stock and would not buy it again because of how many times he was stopped out. He just went on vacation today. I figured his betrayal of the stock and many insiders selling the stock might make the stock a good buy here  ... not to mention the trend. I will make sure not to punish myself too much by holding if it reverses on me.

Thank You

Using the markets for reward and punishment might interfere with your sticking to your system.  Use TTP to experience the game and let it go.

 

 

 

Using the Carrot

and the Stick on Yourself

 

makes you into a donkey.

 

Clip: http://www.epmbook.com/donkey.gif

 

Wed, 20 Aug 2003

 

How Do Stick to a System?

I am assume you design a system and trade it. I've tried to design a system many times but I can never seem to trade by it.

 

I have been a professional trader for 5 years and every time I've tried to design a system and trade it, things went wrong. Either the system stopped working or I couldn't follow it. The only thing that has worked for me is to trade using experience and use my fear by managing my risk.

 

How do you go about designing a system?

 

There so many little things that the mind seems to overlook when designing a system. Sort of like trying to design a system to play basketball or play music. Don't you think?

Perhaps you could take the feelings you have at the time you jump your system ... into the Trading tribe Process.

 

Designing systems and then not sticking to them sounds like drama ... coming up with ways to force yourself to stick to your system is just more drama.

 

 

 

Maybe glue can Help

you stick to your system

 

 

 

Maybe if you get a glue associate

to help you put on the glue ...

 

 

Clips:

www.hi-flyer.com/Order/ orderng

http://puppy52.com/2002/g/oekaki/glue.gif

Wed, 20 Aug 2003

 

Trading Tribe in Vancouver, B.C.

Good Morning Ed.

 

I live in Vancouver, B.C.. Are you aware of any Trading Tribe groups In the Bellingham, Wa or Vancouver, B.C. area? Maybe any contacts who are looking for other people to start a chapter?

As well, I seem to remember some time ago on your site that there was mention of a home study course you were preparing. Any plans on a release date yet? Thank you.

Sincerely

See the Tribe Directory Page for instructions about locating and starting intentional communities.

 

I am planning to write a book about TTP.

 

Wed, 20 Aug 2003

 

What Does Fred Want?

Hello Ed Seykota,

I find your FAQ very useful and I use many of your insights not only in the trading room but for life in general. Thanks for sharing them!

From your saying that "everyone always gets what they want, or at least what Fred wants", I wonder if there is a method to identify what Fred wants.

 

Sometimes, my results are not in line with what I consciously want and, consciously, I can't identify Fred's wishes. I would appreciate any additional insight about this matter.

Thanks in advance

Fred wants to communicate new experience to CM, so that CM can help re-program Fred for optimal response, in case the situation arises again.

 

Fred does not "want" anything else, like cars, jewelry, a better job, a nice dinner or a great trade.