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December 11-20, 2003

 

Questions

(Quotes from Ed in Red)

Answers

Sat, 20 Dec 2003


US-Canada Borderline Follow-up

See: US-Canada

Hi Ed !



News on TV:

Scare at the Vancouver Airport


Looks like just the wrong time to be there for me and many other good people.


BYOD - looking for it ... still haven't found it ... except wrong time at the wrong place and many insights as a result.

PG Tribe Process went great yesterday, I was a sender and a receiver learning a lot on both sides ... got lots of encouragement and provided myself with lots of good advice.

The best,

You might check for traces of BYOD (Bring Your Own Drama) in the way you behave at the moment you encounter resistance.

 

You might get irritated, argue with the immigration agent, act out anger in various ways.

 

Alternatively, you might acknowledge his positive intention, take a moment to receive his feelings (likely he is going through his own drama) and assist him in calming down, perhaps even to the point he awards you a flight pass.

 

Your real intentions not only effect your internal experience, they effect everyone else, too, and the ripples soon splash back on your own shore.

 

 

 

 

 

The Law of

 Inevitable Transference

 

If someone has a stomach ache,

you can get it directly

(by receiving it and disappearing it)

or indirectly (by falling into their drama).

 

Clip: http://home-1.worldonline.nl/

~ac29096/gr/dorx02b.gif

Sat, 20 Dec 2003


Kinds of People

"There are two kinds of people: ones who divide things into two types, and
ones who don't." - Ed, 12/19/03


I thought there were 10 kinds of people: ones who understand binary, and ones
who don't.

Merry Christmas !

Q: How many mathematicians does it take to change a light bulb ?

 

A: Ten - One to do it and eight to watch.

 

 

Binary Indicator

 

 

Clip: http://familytreemaker.

genealogy.com/light.jpg

Fri, 19 Dec 2003

 

More About Ugly

See: Ugly Update


Ed,

I read this post and would like to share more. Although this is also DIM, perhaps we might get half a DIM if we sum up both.

The fellow's drama rather mirrors mine, although my issue has something to do about disliking and avoiding rejection and lack of recognition.

 

I also give off a vibe of being mad at women. Actually, in the past few years, I have been really mad at some girls who "messed up" with me.

 

I even got to the point of wanting to feel feared by some of them. Strong judgments, prejudices and drama fueling more drama were the results I could get.

The judgment that there was something wrong with me has also occurred to me. I felt somehow trapped as I could not find a way to break free from the cycle of drama and it seemed that I was somehow doomed to failure in my emotional life.

And, now, switching to SVO-p, all I can tell you is that I am starting to practice TTP with my family. I am also receiving people in the process of life itself. And if the trend develops, I might even set up a tribe nearby, like the Austin fellow did. I am finding great joy in the experience.

Best regards,

You might try substituting the word "markets" for the word "women" - and see if it rings a bell.

 

As you receive others, others  receive you, you receive yourself, and the drama factor decreases.

 

 

 

When Fred and CM Communicate,

you receive yourself

 

and drama tends to disappear.

 

See link to TTP, above.

 

 

 

 

 

Fri, 19 Dec 2003


Incline Village Tribe Membership


Ed


As you remember, we visited on a few occasions as I was Chair and President of [XXX].


I am currently, President Emeritus and on the [XXX] Board, on the Board of the [YYY] association and chair a PR communications committee as well as being on their long range planning committee.


I would like to join your Tribe with those commitments required.


If you require more, I will email over the Bio from the [XXX] newsletter.


Looking forward to hearing from you.


Best Wishes,

To Apply to

the Incline Village Trading Tribe:

 

Email resume and

 

1-page essay describing your understanding of TTP.

 

Include your phone number and times available for telephone interview.

 

Full participation, including consistent attendance, is essential.

 

The Incline Village Trading Tribe

meets every two weeks.

 

See Ground Rules

 

Fri, 19 Dec 2003


Pre-Defined Risk

Hello!

A suggestion to the Risk Management paper. "Risk is the PRE-DEFINED possibility of loss". Understanding the difference between uncertainty and risk may cause an AHA.

Merry Christmas from Finland

Perhaps you could re-write your suggestion in SVO-p; you might clarify:

 

1. Exactly whom you recommend to do the defining.

 

2. Exactly when you recommend doing the defining (pre-what?)

 

AHA's, in the TTP sense, rarely result from transference of understanding from one person to another; AHA's typically arise from internal communication between Fred and CM.

 

Transference of understanding can easily become an element of drama.

 

You might like to take a look at your comfort level about expressing feelings as well as ideas.

 

 

The Wheel of Definition

 

Define follows Analyze,

follows Verify,

follows Prioritize,

follows Measure,

follows Define.

 

So Definition is also Pre-Definition

 

 

 

Clip: http://www.webcriteria.com/

images/wheel/define.gif

Fri, 19 Dec 2003


Can't Get Across US-Canada Border

Hi Ed !

intentions = results ?


My intention was to share myself with the tribe and I was stopped at the US-Canada border, at Vancouver.

 

[The immigration officials do not accept my going to see my mentor as a valid reason for entry.]

 

I have never been in any conflict with the law in my life in any country in the world and have traveled freely anywhere I wanted to until yesterday. Did terrorists succeed freaking US people out ?

 

I'm thinking about finding a good lawyer and suing for damage done, will talk to my lawyer today about it

One thing that came clear yesterday (I thought that I've been mentored to learn how to help myself and others through TTP).

 

You said, few people get together to discus markets and how it works, no mentorship, thank you for clearing it up

feeling disturbed about it and empowered at the same time for I know who I am and am clear on my intentions

intention = be a great husband

I have been married for 18 years, not without ups and downs but with lots of love and support from my wife.

intention = be a great father
have two boys 14 and 15 years old , they say I'm the best father in the world. One son was talking today about going snowboarding in two weeks which is about five weeks before the doctor said he'll be able to do it, [I encouraged him to experience his pain] TTP works.

intention = help others
been coaching soccer been teaching at the local college for over six years as a volunteer been on the board of directors of CFDC (Community Futures Development Corporation) for more than five years and too many other things to mention here.

intention = financial freedom
been owner of [Name] franchisee rights for northern B.C. until sold; own a hotel which produces passive income for modest retirement now.

intention = be one of the best traders in the world

on my way there one day at a time in this ever evolving moment of now one of the customers accounts up last year over 3% ( when most people lost $ ) and 62.8 % so far for this year.

My calendar today says : Good intentions are no substitute for action ; failure usually follows the path of least persistence.
Love is life ... and if you miss love, you miss life

Thank you for teaching me so much. I'm going to have my tribe meeting tonight (with my family) where we'll teach\mentor and learn from each other.

The best to you and yours,

Yes, family is the essential tribe.

 

It appears you also have an intention to create drama at the borderline and then have many insights.

 

A mentor is a wise and trustworthy counselor, typically advising on your career.

 

Tribe members rarely advise each other; they generally provide encouragement ... to experience your feelings, connect Fred and CM and provide your own advice.

 

 

 

Canada - US Borderline

 

BYOD

(Bring Your Own Drama)

 

 

Clip: www.othergallery.com/

images/simon%20hughes/

canadausaborder.jpg

 

 

Fri, 19 Dec 2003


SVO-p

see: The Future Dec 18, 03

 

Dear Ed,


thanks for your comment on The Future.  I am trying to understand it now and come to some conclusions. But in the mean time, could you write few sentences to explain the SVO-p technique?

Thanx

SVO-p grammar starts with the S-ubject, follows with the V-erb (in -present tense) and ends with the Object.

 

Examples:

 

SVO-p: I drive the car.

 

SVO:  I drove the car; I will drive the car; I have driven the car.

 

OV: The car was driven. (hides the subject, avoids taking responsibility for driving)

 

OV: Trespassing is forbidden. (hides the subject, avoids taking responsibility for implementing the rule)

 

 

 

Warning !

This Sign Breaks the Rules

 

Spectators are not permitted beyond this point. Any spectator entering the prohibited area will be regarded as a trespasser.

 

Thus, the penalty for breaking some secret guy's rules is that some other secret guy (maybe even the same secret guy) intends to regard you as a trespasser, in the non-existing future.

 

Clip: http://www.carsrally.ca/

images/Prohibited_Area_Pink.jpg

 

 

 

 

 

 

 

 

 

 

Fri, 19 Dec 2003

 

Whys and Wise.

Hi Ed,

Here is an idea I have:

The whys trader thinks "price moves, there must be a reason, until I know the reason I refuse to buy/sell". If I know as much as the person moving the price, then I can participate and (vicariously) feel powerful and influential. I want to be one of the leaders and not feel inferior following an unknown. I want to be wise.

The wise trader knows "price moves, someone is moving it, let me move with it and make what money I can". I do not know who moves the price, but it is not important for trading. I do not want to ask whys.

I can get a prize either for

 

1. Knowing the whys of price moves or for

 

2. Wise trading to make money,

 

but I cannot do both at the same time. Nor should I confuse either one with the other. Indeed they each require me to think in opposite directions, and if I do one, it is not a guarantee I do the other well!

This appears to be one more example of duality : each is incomplete without the other but neither implies anything about the other.

Regards,

There are two kinds of people: ones who divide things into two types, and ones who don't.

 

 

 

 

Some Things are Black and White

 

Under magnification,

various shades of gray

resolve to black and white.

 

Clip: http://marvin.mrtoads.com/

halftones.html

 

Fri, 19 Dec 2003


Stress

Dear Mr. Seykota,


You're cool! (first rate). Thank you for your interest in helping other traders deal.

My problem is that I feel stressed when I study the commodity markets. I can feel the tension in my head, chest, and tightening in my breathing. I also get these feelings when I click and refresh to watch live quotes and my constantly changing equity.


I'm only 25 yrs old, yet have had periods of occasional chest pain, which I attribute to stress.

 

Do you feel that the TTP can help with decreasing my stress response?


Do you ever feel stressed about your trading, Mr. Seykota?

Incidentally, about your history. You mentored Michael Marcus, who in turn mentored Bruce Kovner, who's on the Forbes 400 !

Kind regards,

You might like to consult with a medical professional about chest pain.

 

FAQ does not recommend TTP for people with pre-existing medical conditions, particularly ones in which stress, strain and emotional intensity may aggravate the situation.

 

 

 

Warning !

 

Good Risk Management

is Essential to Healthy Trading

 

and to Health in General.

 

 

Clip: http://www.clipartguide.com/

clipart_halloween_pics/skull.gif

Thu, 18 Dec 2003

 

What Do You Think #2

See: #1


Browsing thru the www.turtletrader.com
  site I came across this info: "Trading correctly is 90% money and portfolio management, a fact that most people want to avoid or don't understand." I also came to the conclusion that the entry point is only about 30% of the remaining 10% of trading.


What do you think?

regards

I think you like to come across things on the net and then ask me what I think about them.

 

You might check your feelings about making decisions, on your own, without first consulting an authority figure.

 

FAQ is a classroom forum in which traders can ask questions, become examples, and support each other. FAQ does not offer instrument-specific trading advice, or recommend specific trading system parameters,  See Ground Rules.

Thu, 18 Dec 2003


What Do You Think?

Hi Ed,

Recently I came across a statement on the web:


"[XYZ] expects mature markets to behave in a more choppy fashion. Today's major currency markets (EUR, JPY, CHF, STG) are mature and too random for conventional trend-following methods.

 

The 'baby' markets of the Pacific Rim currencies, on the other hand, behave today's like mature currency markets did as "babies" of the early 1970s."


Do you agree with this? I mean, I know you "should go fishing where the fish is", but do you think trend following is not for "mature" markets?

All the best ...

Attempts to predict which markets have better trends, by bifurcating them into Baby and Mature, may be an attempt to apply "fundamentals" to trend following.

 

You can also bifurcate markets, by beginning letter, into A-M & N-Z.  You might even like to make a special group for Co-type Co-moddities:  Cocoa, Coccoons, Coffee, Coke, Copper, Corn and Cows.

 

Another bifurcation (consistent with Trend Trading) is: markets that are trending (by your definition of trend) and markets that are not trending.

 

 

 

Things Go Better with Coke

 

like smelter ovens

 

Clip: http://www.ciicarbon.com/

images/left.gif

Thu, 18 Dec 2003

 

Discouragement

I am extremely discouraged in my attempts to learn how to trade. I have studied many methods, most of them trend following in nature.

 

I don't trade anything until it shows me profitability in my back testing, but there is nothing that is showing positive results.

 

I have been trying and testing things for a year now non-stop and nothing is looking good. I am sure following and dissolving feelings is something important, such as my feelings of being discouraged, but no amount of releasing is gonna make up for the fact that I can't find anything that works.

 

Most of the questions and talk here seem to address "sticking" with a system and the feelings that surface. But none seem to address system itself, which I understand. I have read books that tell you the system itself is not important and the feelings are more important.

 

Have I gone berserk here? If I don't have something that works, then the plan is doomed from the start. I think I need to experience my feelings in relation to system development rather than to trading.

 

I got no problems with trends. I am a big fan of following them up and down. Sure, no one knows where they go so we just follow them. The only problem is that it doesn't work in my testing. So what's the deal? What am I missing here?

Your drama seems to involve not being able to find something that works. 

 

You may have feelings about your drama that you do not like.

 

Fred, in order to get CM to experience these feelings, may be purposefully entraining your drama.

 

To the extent you can connect Fred and CM, and experience these feelings, you may be able to  transform your feelings from enemies to allies, and proceed with less drama.

 

Releasing is not about making up for the drama, it is about disappearing it.

 

 

 

 

When you Fully Experience

the feelings about your drama

 

The feelings tend to transform

and the drama tends to disappear.

 

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

portfolio/corp_id/gone.gif

Fri, 19 Dec 2003


Hello from Singapore - part 2

See: Part 1

Dear Ed,

Thank you for your comments. In reviewing my trading history, there were several episodes of near "blowouts." As a young trader on the CBOT floor, I can still recall making highly emotional and rash trades. The basis behind these trades were:

1/ A strong opinion on market direction.

2/ No sense of money management...no mental or actual stop loss points.

3/ A feeling of "going for broke."

In a nutshell, I wanted to be vindicated as opposed to making money.

Having re-started my floor trading career in Singapore, I have turned over a new leaf so to speak. I am extremely disciplined about taking losses ... in fact I am one of the most disciplined traders on the floor. It is the flip side of letting profits run that seems to be the problem. I am too impatient to let the winners mature properly.

I read the original Market Wizards when it was first published in 1989 and it was the Rich Dennis chapter that inspired me as a 21 year old to move to Chicago. Having been in the business for over 10 years, I consider my winnings to be paltry, almost embarrassing (based on the opportunities I have had.) With the aid of hindsight, a lack of consistency, resolve and discipline can be attributed to my meager track record.

To sum up: I want to improve myself as a trader and understand that the "you" aspect, the organic part of trading is so terribly important.

 

It may also mean facing up to some unpleasant truths about myself. As my Buddhist teacher would say, "no one likes to be told of their short comings."

Regards,


P.S.  Why did you make the suggestion in the first place?

TTP does not tell people about their short comings (or long comings, either).

 

TTP intends to encourage people to connect Fred with CM, experience  feelings, and replace drama with right livelihood.

 

FAQ does not make up reasons for things or answer "why" questions.  See Ground Rules.

 

You might consider taking your feelings of impatience into the process.

 

 

 

Trend of Impatience

 

Time people are willing to wait and

Distance people are willing to travel,

1650 to 2000.

 

 

Clip: http://www.ietf.org/proceedings/

98aug/slides/roberson-opening-

slides-98aug/img003.gif

Thu, 18 Dec 2003


DIM Process
Re: Dream Terror 2 Tue, 9 Dec 2003



Ed says:

DIM means Do It Myself; the results you are getting are consistent with the DIM process.

Yup, they sure are. Community effort always outperforms what the individual alone can accomplish. As Dickson G. Watts says, “The self made man is proud of a very poor job”. One person does not constitute a tribe. My posts are not intended to take away from what FAQ intends, TTP, and the importance of the tribe. My apologies if they do.

I do intend and will continue to be aware of what I feel at all times. It has made a profound difference in my life over the last few months. My practice of staying in the now, paying attention to what I’m feeling inside, and being aware of my thoughts and emotions as they arise without judgment has given me a sense of peace. I feel at ease and things that before were bothersome to me, now seem less formidable and not really that important. I intend to accept what is … right now. My life is much better now that I practice not struggling with what is.

My friends notice and comment on the change they perceive in me and my relationships with these people have improved greatly. Money is not so important anymore. Nor is “success” in the sense most people perceive it to be. Something infinitely more important and real lays waiting behind the veil of thought and illusion my mind projects when I choose to be fully here and now.

But that is just the way I see it. For me, to live is to love and life is good.

PS: Re: Teachers Fri, 12 Dec 2003 … I think the contributor quotes Eckhart Tolle.

The DIM (Do It Myself) process seems to guide many people.

 

TTP (Trading Tribe Process) works in an intentional community or Tribe.

 

One difference: when you are on the hot seat, your tribe members can encourage you and keep you on task, experiencing feelings you might not be able to transact on your own.

 

 

 

 Intentional Community

 

Sometimes your support team

can help you go the extra mile.

 

 

Clip: http://www.restonrunners.org/

jfk50/Photos/2001Photos/Mark%20

and%20His%20Support%20Team.jpg

 

Thu, 18 Dec 2003


The Future

Hi Ed,


Ed Says:

Everybody gets what they want out of the market.

(I assume out of life as well)

TTP is an inner evolution process. It promotes the flow of feelings, the contact of CM with Fred.

But it's all in your head.

intention = results

I want to be a great trader and be able to make a living out of that.

Could You give your opinion on this:

Is it a true statement, that everyone who will be "in tune" in the CM-Fred relation, gets to the "zero point", and wants to be a good trader, will eventually become a good trader?

My doubts here:

- zero point - it's a state of mind

- to be able to trade successfully you have to have a lot of knowledge; conduct a lot of research, back testing etc.

- you have to present a certain level of intelligence and deduction skills

Different people have different predispositions; some learn faster, some
slower, one will trade better than the other. But what if both of them have the same intention? They want to make a living by trading the markets and have the same living standard. Will they get to the same place? Are all individuals able to possess the needed knowledge?

When I think of trading for living, I have the feeling that I don't know enough to trade successfully. When I think of the future I feel an overwhelming uncertainty, fear etc.

I will graduate from a University soon, so I have to make some choices, and the time is not in my favor ... I would like to trade successfully, but I feel I won't be able to make a living of that, so I need to look for a job first. But I know I want to trade, so why bother doing something I don't want to do (job) and be unhappy? And the jobs aren't that easy to find as well. I know I won't change myself instantly, but I want to work on myself. I feel a bit lost, and I have an emotional roller coaster and a day-to-day basis when I think about the future. One day I feel depressed, the other optimistic. I am losing my integrity. Is my attitude wrong? Where should I start? I don't have a lot of time for mistakes and experiments.

I don't know if this all I am writing here, makes sense to you. If you understand me - what and how do you feel about this? I would really appreciate your comment.

Thanx and all the best

Merry Christmas

You seem to have emotional connections to the (non-existing) future.

 

You might notice you tend to use the future tense in your send, even ask questions about the (non-existing) future.

 

You might try re-rewriting your send in SVO-p. (Subject, Verb, Object - present tense).

 

 

 

Even Our Visions of the "Future"

 

Occur Now

 

 

Clip: http://www.historyof

theuniverse.com/images/future.gif

 

Thu, 18 Dec 2003


Stock Market

Hi. Ed, I recently read the interview you gave in Market Wizards. You mention that the stock market is not only different than every other market, it is also different from itself.

 

Do you mean that trend following systems do not work as well (or at all) for the stock market?

One thing that seems to stay the same: prices keep changing and markets keep changing, ever continuing to be different, now.

 

Axiomatically, if you make money on a trade, the trade has a trend.  Riding a trend is sufficient and necessary for profit.

 

 

Trend Accompanies Profit

 

Clip: http://www.ci.hialeah.fl.us/

library/images/profit.jpg

Thu, 18 Dec 2003

 

More Dreams

See: P | !P = TRUE

Hi Ed,

Hope I am not boring you, but as I am typing this stuff anyway, may as well send it to you / FAQ, may or may not help but can't hurt.

 

OK. So I write to you earlier describing what happened in the early morning. Then, in the night, I read more of the FAQ and I reach 31 May with that TTP transcript with H and R, who appear to be English blokes : "And I've had some VERY funny recurring "flashback" type experiences to when I was a kid / adolescent over the last few days ... but they seem totally unrelated to anything mentioned here or before ... What are they?"

Seems to be like what I describe below as #5 happening to me last night. What are they indeed? I do see however that they are incidents that are some kind of source of my feelings. Interesting. And yes I can totally associate with his procrastination, in fact at the moment I am up late at night reading FAQ rather than sleeping or working on my thesis, but "Fred exorcises CM of past ghosts" is too fascinating to ignore. Ah, now there is another problem: this stock is too good to ignore.

Tomorrow I read June 2003. Let us wait and watch for what that brings. Also maybe I can sleep better tonight. Or worse. Maybe there are monsters under the bed.

Regards,

You might consider taking your thoughts and feelings to a Tribe meeting, as an entry point for TTP.

 

Trying to analyze feelings by email is part of the DIM (Do It Myself) process.

 

 

 

TTP Intends

to reframe monsters

as allies and friends.

 

This is generally much easier to do

with a support team.

 

Clip: http://sweb.uky.edu/~cmitc0/

Monsters.jpg

 

Thu, 18 Dec 2003

Portfolio Selection for Stocks

Hi Ed,

As you indicate in your risk management report, portfolio selection is critical to overall performance. My tests also confirm this belief.

I continue to test the importance of price strength prior to entering the market, as well as, price strength after market entry.

My portfolio selection tests lead to further investigation into various exit methodologies.

 

What I find is that "cutting losses short" seems to be of secondary importance to "letting your profits/positions run."

 

I trade a diversified basket approach to the stock market meaning I buy and sell a bunch of stocks simultaneously when I get a signal to enter or exit. I find it more important to assess the performance of the overall basket then of the individual stocks in the basket when making decisions. Therefore treating the basket as I would a stock. You also refer to this in the diversification section when you say "The strategy relies on the average security having a profitable expected value." Obviously, the better my portfolio selection is, the higher my total profitability.

Can you provide guidance as to how I can improve my portfolio selection techniques?

Happy holidays to you and your family and thank you for helping to make this year one of my best ever!

FAQ does not offer instrument specific trading advice, See Ground Rules.

 

You might answer your own question about portfolio selection by simulating various strategies over historical data.

 

Note: managers who select on strength and buy upside breakouts may currently be sitting with profits on some nicely trending stocks. 

 

At the time of the breakout, some fundamental analysts may not yet be aware of the reasons for a move, and see relatively high prices, so they do not recommend breakout stocks.

 

They might not do so until they fully understand the fundamental reasons and arrive at their AHA.  At that point, the discount may already be in place.

 

 

 

Selection Strategies

 

are an important part

of portfolio management.

 

 

Clip: http://www1.math.uni-augsburg.de/

Mondrian/Selection.gif

Thu, 18 Dec 2003

 

TTP for Non-Traders

 

This weeks FAQ's were great. Sometimes i read your answers first, sometimes the submitter's. questions, Holding the concept of intention = result in mind, both work.

 

I am still very interested in experiencing the TT process but wondering how that can happen as I am not a trader.

 

Maybe there are other non-traders who read FAQ and want to learn the process ... Are you considering expanding your work in this way? Sometimes I feel frustrated with the work. It feels like I'm in a game with a sketchy abstract of the rules. If I could see it, I might understand the actual group process more clearly.


You can begin by receiving, just in the process of life itself. 

 

You may wind up attracting a tribe in your own image.

 

You do not have to refer to the Trading Tribe or to TTP or to this site.

 

Ed's intention for TTP is for people to experience it, and for it to disappear and become just another passing AHA.

 

 

 

Aha !

 

 

Clip: http://www.the-scientist.com/

images/yr2002/mar18/aha.gif

Wed, 17 Dec 2003

 

Trading Approaches

Hello Ed,

A brief question about your preferences regarding basic trend following approaches.
Which do you prefer and primarily currently use: a) Breakout with x number of days for entry and exit b) SMA or EMA with different MA for entry and exit c) SMA or EMA with the same MA for entry and exit?

 

I'm trying to fine tune a trading system and determine if breakout or MA is superior and if EMA is better than SMA. If you have a clear favorite what are the main reasons.

I very much enjoy your Q&A wisdom and humor. Thanks for providing such valuable insight to laymen like myself.

Best regards,

FAQ does not  recommend specific trading system parameters ... or make up reasons for things.  See Ground Rules.

 

Making up reasons is part of the Fundamentalist process. 

 

 

 

Reasons

 

1. Their Voluptuous Voices

2. They have International Appeal

3. They are Fun to Snuggle With

 

My favorite, at the moment, is #3.

 

Clip: http://www.horsedesigns.com/

goatsandllamas/reasons.gif

Wed, 17 Dec 2003

 

P | !P = TRUE

See also: Non-random?


I think about my non-random question, and realize that I did not introduce myself! So I write this mail. (I am a student of computer science at [XXX] working in verification -- mathematically showing that computing and computer systems are correct.)

I have the tendency to ask too many questions, esp. "why?" questions. This carries from my science background perhaps.

I am looking forward to the Austin area tribe starting off. Meanwhile I am reading the entire FAQ again and thought I'd write to FAQ about a couple of things.

A few years back, I indulge in some ad hoc "stock market investing" based on fundamentals, without risk management.

 

I find this period as not only unprofitable but also stressful. Eventually, I lose a lot of money and I stop trading and decide to learn. After quite some research, a light bulb goes on in my head (AHA?): "Systematic Money management is key". I also find the phrase "Percent volatility based position sizing" in Van Tharp's book and the same basic idea in the Turtle System. (both websites.)

 

On the risk page, you say at the bottom:

 

For very close stops, and for a high risk allowance, the number of shares indicating under Risk-Basis sizing may even exceed the purchasing power of the account.

 

After my losing streak, when I have the money management is key aha, this is my exact conclusion -- if working with stocks, and a medium to high risk, then the margin rules in stocks are set up with such low leverage that I cannot do effective pyramiding -- if I put on just 4 positions in one stock, then the entire capital is invested, though on risk basis I am only partially invested! This is when I decided to really stop and learn before continuing.

At about this same time I realize that "The psychology of trading is as important as, if not more than, the mathematics of it." Having a system is not the same as being able to stick with it. I must say I recognize some personal problems like 1. lack of disciplined systematic approach, 2. no patience to wait for results, need for instant gratification, 3. need for constant activity as a proxy for progress, 4. over-analysis when any decision is to be made, 5. laziness.

I seem to have above problems arising from feelings of 1. not being good enough, wanting to be better (perfectionism?), 2. non-entitlement to success, 3. pessimism, lack of confidence in being able to get to the top even when I put in effort -- in fact this makes me abandon putting in efforts, procrastinate, sabotage etc., -- even though I know that with even a little bit of effort, I often do very well, 4. excessive skepticism, unwillingness to go with the flow unless I find a reason explaining the flow. (Next time I fly, maybe I should ask the pilot if he thinks Bernoulli is the reason for the plane lifting off! :-) )

Until I resolve some or all of these issues, I am a non-trading trader! It is better to be out of market two years than to pay excessive tuition to the market for teaching me through my own drama about myself!

Also, here is an interesting event -- I wake up very early today morning with a strange confused feeling. I never ever remember dreams and it feels very odd when I wake up in the early hours of the morning. Then I realize that it is not a dream but actually the memory of a series of incidents from my past, about 8-9 years back. Almost suddenly I feel that I am aware of the source of some of the feelings above.

 

The first few minutes I am in a trance like state, but as soon as I try to feel these fully and pursue further, the conscious mind takes over, I feel very tired and I go back to sleep. I don't know if this is a mini-aha, but it seems like I have partially learned something that my subconscious is trying to tell my CM.

For now I stop here. I am happy to get any comment from you or any FAQ reader about any of this. I am happy to not get any comment also.


Logically p or not p always evaluates as true, so I can just say that I am happy just to write the email, and the outcome does not matter.

Regards,

You seem quite developed in the area of logic and analysis.

 

Something likely drives you toward intellectual excellence.

 

You might consider figuring out the feeling of wanting to figure it out.

 

 

 

P OR NOT-P

is TRUE, you see

then, TT AND P

is LET IT BE

 

Clip: http://www.tamano.or.jp/usr/

osaka/pages/image/let.jpg

 

 

 

Wed, 17 Dec 2003

 

UNCLE Point and Lake Ratio

Hello Ed, hello traders

I like the UNCLE point and Lake-ratio. (See Risk Management link, above)


After trading futures for my own account or a few others I now help an asset management company.

They are going to trade "managed futures accounts". I helped in setting up the technical infrastructure, such as software, hardware, brokerage etc.


The partner which I work with is looking for a good (what is good) system(s) in the following way.

He takes intraday data of the last 2 months or so and optimizes a system so that he sees very small lakes (Lake ratio).


Then he begins trading and of course gets a drawdown. He cannot even make a "Lake". I mean trying to go through a drawdown period.


He first gets to his Uncle point. Then he tries to find a better system ... and so on.

First he wanted a system that had a high profitability. I told him profitability (%winners) was not enough. Finally he believes that lower probability and high average winners are ok too.

I traded for him (not yet for his clients) and won 20% in the first 6 weeks. Than the next six weeks I lost this 20%. First he was very (too) excited, now he is too fearful. But he likes the round turns.

For me it is nice to have colleagues (because I'm quite extrovert, and trading is a lonely job), I cannot prove to him that he won't find the system he wants.

What is your advice to ME? In Holland it is impossible to find a place with colleagues to work with if you are not grown up in the banking arena?

Best Regards,

You seem to be working the DIM (Do It Myself) process, rather than TTP.

 

Your drama seems to include emotional engagement with a short-term trading system.

 

Your boss appears to be the action addict and you appear to be the enabler, although sometimes you may trade roles.

 

You and your boss seem relatively content with your current situation, so you might like to think it through before you attempt to change anything.

 

If you wish to remove some drama, you might consider assembling a Tribe and implementing TTP.

 

 

 

Problems

 

People tend to have

the problems they want.

 

Taking someone's problem away

without an invitation to do so

is generally impolite.

 

Even with invitation,

it can still be risky

since people sometimes ask for advice

as a way to enroll you in their drama.

 

Clip: http://www.swepcousa.com/

bpsite/solution.htm

Wed, 17 Dec 2003

Are Prices Non-Random?

In your risk management article, you say:


"In non-random processes, such as secular trends in stock prices, pyramiding and other trend-trading techniques may be effective."

Are prices truly non-random?

Thanks,

Prices are things, so are neither random nor non-random.

 

Price behavior is random in ways, and non-random in other ways, depending on your definitions.

 

For example, price tends to be about the same value as the immediately preceding price, so a price chart appears as an improbably contiguous wiggly line across the page, rather than as a randomly scattered mist of points.

 

If, however, you consider the price change, or deviation (dp/dt) from the preceding point, you can find methods that show random behavior, particularly in the short term, most of the time.

 

Secular means occurring once in an age.  You can certainly find non-random periods, at least once in an age.  Such periods sometime attend major break-outs.

 

You might check the recent trend in Eurodollar / US Dollar, to see if it looks random to you.

 

 

 

March Eurodollar / US Dollar

November 7 - December 17

 

The existence of occasional non-random price behavior follows from Sir Francis Bacon's observation that in nature things move violently to their place (big trend) and calmly in place (random dithering).

 

Dither: to act nervously or irresolutely, from the Middle English didder, didderen, to tremble. Trembling in place tends to meet many tests for randomness. Some return-to-the-mean statisticians tremble in place at the thought of buying strength and selling weakness.

 

 

Sir Francis Bacon

(1561–1626)

 

For honor is, or should be, the place of virtue; and as in nature things move violently to their place and calmly in their place, so virtue in ambition is violent, in authority settled and calm. from: Essays, Civil and Moral.

 

Clip: www.dergi.org/202002/1502.htm

Wed, 17 Dec 2003


Wanting a Better Stock Picking Method

Ed,

I recently enrolled in a course that teaches a trend following system and started trading for the first time this week.

 

Since I am familiar with the stock market more than any other market, I started trading stocks. My risk management seems to be fine. I have no problem exiting a trade that is going against me, even the day I enter it.

 

However I am having trouble picking winning stocks.

 

I only traded stocks that hit 55 day breakouts but they all reversed either the day of the trade or within a few days.

 

 It seems that this alone is not enough of an indicator.

 

Can you give me specific advice for picking winning stocks?

 

Thank you.

FAQ does not recommend specific trading system parameters, See Ground Rules.

 

Since so much of trading is about your ability to follow your system, a good system generally resonates with your gut approach, and evolves through years of trading.

 

The chances of finding a system, off the shelf, that works for you are slim to none.

 

Before you do much trading, you might like to study your system's historical performance to help you set your expectations, about how you might feel following it.

 

You might also take your feelings of discouragement to a Tribe meeting, to see if you are just using trading as a way to justify them.  You might even have an AHA about the positive intention of discouragement.

 

 

 

Discouragement

 

may associate with

unrealistic expectations.

 

You may have little interest in setting realistic expectations if your real goal is to justify discouragement.

 

Some people may attend courses on how to trade, in order to find new and exciting ways to run their disappointment dramas.

 

Clip: http://www.youthchg.com/2nws2.html

Wed, 17 Dec 2003


Poem?

There is a trader named Seykota,
who doesn't have to drive a Toyota.
He has a friend in the trend
and from that he won't bend
For market news he doesn't care one iota.

The same man's first name is Ed.
He conceived a concept called FRED,
which comes from the brain stem,
which interacts with the CM,
showing all drama makes it's bed in your head.

As the TTP founder,
he won't let us flounder.
With a Hot Seat to see our drama,
without having to meet the Dali Lama,
and without therapy from some shrink bounder.

(c) DumbPoetry Productions
May reproduce in any media whether or not for commercial gain.

Hmmm ... you seem to have the essence of FAQ ... including giving no advice about whether to be a short or a long fellow.

 

 

 

Henry Wadsworth Longfellow
(1807-1882)

 

Longfellow writes poetry as a bird sings, with natural grace and melody, that clings to your soul and confers a sense of joy and a spirit of optimism and faith in the goodness of life.

 

Example from

 The Village Blacksmith

 

Thanks, thanks to thee, my worthy friend,

For the lesson thou hast taught!

Thus at the flaming forge of life

Our fortunes must be wrought;

Thus on its sounding anvil shaped

Each burning deed and thought.

 

Clip: http://www.epdlp.com/

fotos/longfellow.jpg

Wed, 17 Dec 2003


Ugly Update

Ed,

Thanks for your insights and I have an update for you.

You are right Ed, even my own feeling about my appearance of my face was part of the drama.

 

The bigger drama though is my whole life I give off a vibe of being mad at woman and am afraid to get involved in relationships. I have never really known why. I did know that deep down it was a problem with me though, not the world.

This morning a couple minutes before my alarm was set to go off, I was semiconscious and Fred (I was kind of in a dream state or something), told me that the positive intention of avoiding woman and relationships was to protect me from getting hurt like I was in childhood. This just popped in my head and I had instant understanding. You see a lot of schoolgirls had made hurtful comments and teased me about my appearance all through childhood.

My appearance has changed drastically since childhood, and I know that I am not THAT ugly anymore. At my 10 year reunion no one even recognized me I have changed so much, and a lot of woman even thought I looked really good. But for some reason I am just not able to get into relationships.

This morning after Fred told me the positive intention of avoiding woman and relationships, I feel a huge weight lifted off my shoulders. It has to be an Aha, since I feel a total understanding about the issue now and I no longer seem angry at woman in the present moment. I feel closure. I feel the drama is gone and I feel excited to get the day started and to go talk to woman.

A year back I even played out a funny drama where I thought I was gay, even though I knew I always liked woman. But either Fred or my conscious mind had to try to justify the reason that I avoided getting into relationships with women.

This stupid DIM process took me 10-15 years (or more) before Fred told me the positive intention of what was going on. Your insights a few weeks back really helped me work through the process. Even though everything in my last post was a drama, for some reason everything worked out.

I started following FAQ to listen to your insights about trading on a psychological level. I am a good trader though and have no problem with successful trades. In fact I usually skip those posts involving trading. Instead FAQ is helping me dissolve the dramas in my personal life.

Thanks again,

Yes.

 

 

 

Beauty is in the Eye

of the Beholder

 

For example, some may find

how the light plays on the water

 rather attractive

while others may not see it at all

that way.

 

Clip: http://www.cpcug.org/user/

jlacombe/tahiti1.html

 

Tue, 16 Dec 2003

 

Denver Tribe

 

I want to talk with other traders in my area that are willing to go through TTP.

 

I consulted your directory and do not see Denver listed. I am a novice - I found FAQ only a few weeks ago and have never tried anything like TTP before. I do not know how to organize a local Tribe, but I'm willing to try.

 

 

Welcome

Denver, Colorado

 

See the Tribe Directory Page

 

 

 

Denver

 

• Denver is the nation's most highly educated city with the highest percentage of high school and college graduates.


• Denver brews more beer than any other American city.


• Denver is the "Baby Boomer" capital of America with the highest percentage of boomers of any major U.S. city.


• Denver citizens contribute more public funding for the arts per capita than any other U.S. city.


• Denver has the thinnest residents of any U.S. city, according to a federal study.


• Denver really is a mile high. There's a spot on the west steps of the State Capitol building that is exactly 5,280 feet above sea level.

Clip: www.remotegasstrategies.com/

msgr2001/denver.asp

Tue, 16 Dec 2003

 

Feeling of Emptiness as a Catalyst

Ed,

I have been using some of your very insightful inputs from a month or so
back.

 

I mentioned I was "stuck" with respect to some of my goals of developing a trend following system. This has been something I have wanted to do for a long time and you have been very instrumental in pointing out some very meaningful things I can do! I really appreciate that.

 

Specifically, you mentioned that some of my drama "seems to revolve around the conflict between 'I'm supposed to do it' and "i don't want to do it." (Monday 10/20 email response from you!)

 

And the last comment you gave me was "More direct, still, is for you to experience the feelings of putting the whole thing off for a while."

 

WOW, that really hit me. I almost immediately "felt" what you meant. That has been very helpful in getting me going.

 

That feeling of emptiness and incompleteness of not accomplishing what I truly want to do has been a real catalyst at accomplishing a lot in the past two months.

Once again, thanks for all the helpful insights you have provided me and many others.

Regards,

Yes.

 

 

 

Emptiness

 

Not Even the Human Imagination

Satisfies the Endless Emptiness

of the Soul -- Allen Ginzberg

 

Emptiness, Fully Experienced

Has a Positive Intention

 

Clip: http://www.drowtales.com/

~workandduty/sketch/emptiness.jpg

 

Tue, 16 Dec 2003


Supportive Family


Mr. Seykota,

I very recently discovered your site and FAQ. It's fascinating. It seems I am ready to learn about the most important step in trading - dealing with it. Over the past 5 years, I've had a general interest in trading. I tried some futures, some stocks, and options in both. Over the past 18 months, I've had a very serious dedication to trading.

 

I am programming continuously and back-testing a system for the FOREX markets. It's an automatic program that can receive quote feeds, look for a trend, put on trades in a pyramiding scheme, and stick to stop-loss points for risk management. I rolled up my sleeves and did the hard work myself. I didn't buy anything pre-packaged. It's 5000+ lines of Visual Basic.

The first version of the system went live in September. After a couple hundred positions, the account balance went nowhere. (You can easily tell this is intra-day trading, a la fractal scaling.)

 

The balance didn't go up, but it didn't go down. After altering the algorithm and doing more back-testing, "version 2" went live in October. Same result. "Version 3" was released in November - no profits; no losses.

 

The problem all along was not risk management. The drawdown was never greater than than 20% and always recovered. After 800 positions in three months, the account was down 5% from the "version 1" starting balance. It was easy to optimize the past and show a profit for those parameters. But using those parameters for the present only kept the account at break-even.

 

The problem was bet size. I was too diversified for my account size, so the bet was always getting capped by (1/N)th of the account, where N was the number of assets available.

 

The bet size was never large enough. Now I stick with just one asset, and the system can make as large a bet as it needs to when the trend signal arrives. I ran the back-test to see whether it could handle two assets, and it can't until the account grows by at least 20%.

I'm writing to thank you, since it was reading FAQ that helped me figure out where the problem was. I also improved the pyramiding scheme; I followed the instructions on the back of the dollar. I made the adjustments and back-tested again. The parameters are more robust. "Version 4" went live last week.

 

The system is running smoothly, and has drastically reduced the number of trades. Since it just went into production, I can't say that it's making money yet, but it isn't losing money either. The bet size works perfectly and risk management is protecting the principal.

I believe I have a trading system that works.

 

My wife and my father are phenomenal support. I've had several AHA moments in my regular conversations with them over trading. My kids are also inspirational.

 

They don't know what failure is, so they taught me to get up after every "bonk". They feel everything in a raw state since they do not have blocks between Fred and CM; they don't know HOW to block that! In this sense, I already have a tribe helping me through my feelings.

After reading FAQ, I found that I am a very boring person; I don't know how to set up a drama. Trading mechanically is the perfect fit for my personality.

 

I know drawdowns are built a priori into the system, and I know the significant profits happen rarely and only when they have room to run. My feelings on these points dissolved very early in creating the system.

 

Long ago, my goal was to make a system that could run on its own without intervention so I could spend time with my family. I am married to the most wonderful woman in the universe, and we have two beautiful children with a third due next June. Trading is a way to pay the bills while enjoying the life I want with my family.


Thank you for being out there.

Sincerely,

Yes.

 

 

 

Family

 

The Essential Tribe

 

 

Clip: http://www.soton.ac.uk/

~plf/images/family.gif

 

Tue, 16 Dec 2003

 

Austin Texas

Intentional Community Update


Hello Ed,

I am writing to inform you about my experiences with the intentional community in Austin, Texas. When I first write to FAQ in September, 2003 to begin an intentional community in my area I am not sure what to expect. I have many questions about TTP and I am not certain about how to begin the journey, so I just begin and decide to leave the "how to" question aside, as it does not seem as important as just starting right now. If I come to a point that something needs an answer, I ask.

As of October, 2003 I receive no correspondence from others in my area that are interested in TTP. I wonder if I might find a way to "solicit" others in order to build a group. I decide against this, as I believe that the most appropriate group will likely self-select.

 

I decide, rather, to practice being a good receiver in my everyday life and in trading, and I decide to wait patiently for a trend to develop in the area of the Austin intentional community.

 

 I think, "Perhaps if I make myself available to participate in it rather than attempt to create the trend myself, something interesting may develop."

As of October, 29th I receive the first correspondence from someone interested in participating. The beginnings of a trend appear, or perhaps it is a "whipsaw." As more messages come in and I respond to them, a trend is definitely underway. I commit to it, and a fledgling intentional community exists.

As of December 2003, not only is the Austin community building momentum, a relationship with another intentional community develops and is quite productive. Many of my original questions are answered, and I experience a large degree of personal development and growth before I practice a single session of TTP. Imagine the growth when TTP is underway.

Thank you. I continue to ride this trend and profits (monetary and otherwise) continue to accrue. I am very committed, and it feels nice. This is time and energy not spent, but conserved, multiplied, and transformed.

Thanks again, and best wishes to you and yours from me and mine.

Yes.

 

Good example of starting a Tribe and good example of using SVO-p.

 

 

Austin, Texas

 

Plenty of people show up

when you intend to receive them.

 

Clip: http://www.colorado.edu/

geography/gcraft/notes/remote/

gif/austin.jpg

 

Tue, 16 Dec 2003

True Meaning of Jihad


Dear Ed -

Just wanted write you to mention how well you recently explained a recent situation to me on 10/7/03.

My first email mentioned how I was contemplating when I was going to quit trading and start fighting the Islamic Jihad which is about to start a Second Jewish Holocaust.

 

At that exact moment, I found some Nazi swastikas drawn on a bench. Your reply was that when Jew haters and Jews become "senders and receivers for each other, the drama tends to dissolve".

A few weeks later, I read the speech of PM of Malaysia that he made at the Organization of Islamic Conference where he called for genocide of the 18 million Jews left on the planet.

 

You were right!!!!! My drama was resolved as I became determined to teach the Jew haters the true meaning of Jihad.

Keep up the great work.

Determination to teach others a lesson may just extend the drama.

 

When you fully experience your feelings, rather than act them out, the drama tends to disappear.

 

Folks with strong feelings on both sides of an issue may find they actually have a lot in common; they may have the key to each others' dilemma.

 

 

 

Communicating

 

One way to teach people

is to listen to them

while they teach you.

 

Clip: http://www.stjosephs-

highland.org/listening.gif

Tue, 16 Dec 2003

 

Now

Hi Ed,

I find I trade more profitably and see the present more clearly when I refuse to justify or defend prior trades or decisions. Thank you for your freeing emphasis on "now."

OK.

 

 

 

It's Still Now

 

 

Clip: http://now-zen.securesites.com/

cgi-bin/orders/perlshop_mhi.pl

Mon, 15 Dec 2003

 

Prerequisites to Private Consulting?

Dear Ed,

I'm assuming there are certain prerequisites to your private consulting. Could you tell me what they are.

See the link to Private Consulting at the bottom of the FAQ Home Page.

Mon, 15 Dec 2003


Happy Holidays

from the Toronto Trading Tribe

Hi Ed!


All the best to you and your family … now!

Recently, we and our Freds crashed a great Toronto restaurant called “Fred’s Not Here” for a little holiday dinner. We thought you would appreciate a picture or two.

We are all very proud to be part of this group. We do good things.

Thanks, Ed

 

 

Fred's Not Here

 

 

 

The Toronto Trading Tribe

 

Yes.

 

Congratulations to you and to your Tribe.

 

By the looks of the clock, Fred might have the hands with him, now.

Mon, 15 Dec 2003

 

Celebration on Hold


Ed:

Exactly what is "celebrating feelings"?

Is it a concept or a process?

How is this done, when should this be done and why is this so important?

Happy Holidays,

Your real trading system comprises the feelings you are unwilling to experience. 

 

To avoid experiencing such feelings (eg: about trading with the trend, letting profits run, cutting losses and managing risk) you might jump off your system.

 

The Trading Tribe Process (TTP) intends to convert feelings from adversaries into allies, thus supporting sticking with sound principles.

 

Tribe members intend to find positive intentions for their feelings.

 

Yay !

 

 

Celebrate !

 

Big party at the Monastery

when the Monks finally discover

the original translation error.

 

It isn't celibate after all.

 

 

Clip: http://www.emoonlightcreations.com/

designs/celebrate.jpg

Sun, 14 Dec 2003


Futures Trading

Hi Ed!

As a Swedish citizen I am not that familiar with futures trading. I have read a few books trying to learn the basics, but today I only trade mutual funds, with a mechanical trend-following system. I am however interested in the potential that futures seems to be able to offer.

I have understood that the limited time span of futures contracts is a problem and that there are different ways to deal with this, with different kinds of adjusted contracts. But why could you not just test the system on the data from the cash market? And also trade the futures market based on signals from this market. The futures market and the cash market should act the same, shouldn't they?

One more thing. I have read the book "The Market Wizards" and was very impressed by your trading. But is it really possible to achieve that kind of return that you have, without overtrading?


With overtrading I mean taking larger positions than the money management part of your strategy tells you. How large drawdown, in percentage, do you have to tolerate to get such a high return?

Best regards

FAQ does not tell people what they should do. See Ground Rules.

 

You might take your feelings about what people and things should do,  setting rules and following them,  into TTP.

 

 

Thou Shalt Not Not Jump Thy System

 

Unless Thou Hast a Really Good Reason

 

Or a Feeling Thou Canst Not Handle

 

 

Clip:

http://www.mormon.org/stg/multimedia/

files/webBooks/images/2862_c14_st.jpg

Sun, 14 Dec 2003

 

Intentions =  Results ?

Dear Mr. Seykota,

From you I have learned that Intention = Results, and so there is really no need to ask why. (For whatever results we are getting is a perfect reflection of our intention) It is a powerful statement, and once I started to embrace it several weeks ago, I notice the strengthening in my commitment to the pursuit of excellence in trading through trend-following.

However, lately I began to think, what about those unfortunate people who are born without a leg or an arm? Or those who are born with mental disabilities? The result that they are getting in their life, sometimes, does not truly reflect their intention. They may also want to run like a normal person, but their physical limitations will not allow them.

Or let's say cancer. One can reduce the risk by leading a healthy life, like exercising, eating healthy food and avoid excessive alcohol or other substance abuse. Yet, one can still have cancer even though he has done all the right things that he can do. The results he is getting does not reflect his intention.

Or, the victims at WTC who lost their lives on 9/11. I used to work across from WTC, and I keep thinking, "Why are they getting such a tragic result?"

I understand that we are living in an uncertain world, and whether it is living or trading, some unfortunate and extraordinary events may happen. I see our job not as to avoid risk, but to embrace it. Take calculated risk that is. But it still does not answer my concern: does intention always equal results?

Thank you very much for all the teachings. Please note that I am truly thankful for all the lessons you have taught me, and I sincerely wish to hear your answer to clear my confusion.

ciao,

P.S.
It is my birthday today, and one of my birthday wishes is to get to meet you in person, and learn as much as I can from a master like you. When is the next workshop? Thanks.

"Intention" and "Result" are both concepts, existing as properties of mind.

 

The notion that Intention = Result, is a belief or personal decision, subscription to which invokes powerful corollaries about dealing with uncertainty, staying in the now, taking responsibility, etc.

 

If you accept Intention = Result, you see that it is your intention (and everyone else's) for events to occur exactly the way they do.

 

This attitude is particularly compatible with trend following.

 

Alternatively, you might believe in causality, and find reasons for  events, and discrepancies between intentions and results.  You might even ask the incorrigibly ambiguous question about the non-existent past: namely, "Why did it happen?"

 

9/11/2001, stunning events occur and we experience them, each in our own ways. 

 

 

 

Stunning Events Occur

 

You can come up with reasons.

(The Causal Model)

 

You can take responsibility.

(Intention = Result)

 

Clip: http://larry.911photos.com/

9-11-01_850_am_from_my_apt_3.jpg

Sun, 14 Dec 2003


Practitioner's License

Ed,

Thank you for the information regarding the Practitioner's License. I know what I need to do now to obtain the license. I also know that I do not currently meet the qualifications.

Thanks for sharing your insights and ideas. The changes in my life stand as testimony to their effectiveness.

Regards

OK. For information, See FAQ Home Page.

Sun, 14 Dec 2003


It feels good --

more lights are coming on now !

 

Dear Ed,

Thanks very much for your insights last week. While I was in the lounge at SFO (for 9 hours) I started to reflect and re-experience many things from our talks and the tribe meeting.

Then, looking into a big cloud out the window something just sunk in: Good trading is basically about "big winners".

I have heard and read for years: "cut the losses and let the profits run" but for me to "fully understand this" it needed to be turned around the other way: i.e; make as much money as possible on the few really big winners and control the risks tightly on the many small losers, while you "nibble" to find those few big winners ... It is truly quite a simple concept, although difficult to stay with of course (as you are mostly wrong.)

 

Therefore, I have designed the attached reminder for my wall to always keep me "on task/and strictly disciplined" in my future testing and trading.

XXX, YYY and I also had a nice discussion at the Hyatt on Friday morning after you left for the airport. [ZZZ Software] will do almost everything now, except that it still will not allow you to calculate any plow-back additions during a long trending market move. (Too bad, but it has been improved.)

Thanks again, so much Ed. I do hope we will be able to stay in touch periodically in the coming years ...

Kindest regards,

 


The Three Golden Rules of Trading

1.) Keep all winners, until market reverses

2.) Do Not lose (very much) equity capital

3.) Always follow the above rules 1 and 2.

Yes.

 

 

Lights On

 

Clip: http://www.abc.net.au/

international/features/

sales_washington/christmas

%20tree%20white%20house.jpg

 

Sun, 14 Dec 2003


Hello from Singapore

Dear Ed,

I am a floor trader on the Singapore Futures Exchange (SIMEX.) I consider myself to be a short-term scalper that takes rarely takes overnights. Can the TT process help guys like me?

Best regards,

Scalpers provide liquidity.

 

Scalping can be a little like grabbing nickels in front of a steam-roller, catching a falling knife, taking a sip out a fire hose, etc.

 

You might check over your trading history for evidence of drama around risk assessment, position sizing and trade management.

 

 

 

Going Against The Flow

Requires Some Skill

 

Clip: http://www.co.henrico.va.us/

fire/recruit/hose.gif

Sat, 13 Dec 2003 16:24:55 -0600

 

Psychiatrists and Psychologists

Dr. Ed,

You have much more insight into people than many of the psychiatrists and psychologists I work with! Your support TT is good therapy!

You might consider enrolling your colleagues in a Tribe.

Sat, 13 Dec 2003

 

First Tribe Meeting


Hello Ed,

I recently attended my first trading tribe meeting with great results. I think the TTP process works.

I'm wondering if its possible to carry suppressed feelings for long periods of time without release? Also, if these suppressed feelings can manifest themselves into physical illness?

I read a quote and it reminded me of you:

 

 "Great spirits have always found violent opposition from mediocrities. The latter cannot understand it when a man does not thoughtlessly submit to hereditary prejudices but honestly and courageously uses his intelligence" - Albert Einstein


Thanks for your efforts with the Trading Tribe.

Yes.  Feelings tend to remain in suppression, entraining all kinds of drama, including physical illness, until they clear.  TTP seems to contribute to clearing such suppressions.

 

 

 

Phlebitis

 

Can be a Body Metaphor

for Not Having a Leg to Stand On

 

http://www.stevevanzandt.com/

images/nixon2.gif

Sat, 13 Dec 2003


Community in India

Hi Ed,

I notice that there isn’t an Intentional Community in India. Therefore, I was wondering if it might be possible for me to start one here. My details are as follows:


I am attaching my resume to this email, if you might want to peruse it. Do let me know if there is anything else I need to know/do at this point.


Sincerely,

 

 

Welcome

Chennai, India

 

See the Tribe Directory Page

 

 

Chennai, India


Clip: http://www.jmmtravel.com/

visit-india/chennai.html

Fri, 12 Dec 2003

 

Instability


I feel that there are times in life or trading that there is nothing I can do to change a situation ... I think about the analogy of fishing ... If there is no fish I have nothing to do but go home and be patient. Yet I am also afraid that I might be insisting on a mistake and perhaps should try something else. I feel rather confused and insecure about these choices. Once a co-worker brought to my attention the fact that I am rather unstable and relating this issue also reminds me of the episode.

"Times there is nothing I can do"  is not a feeling.

 

You seem to be practicing the DIM (Do It Myself) process, trying to enroll people in your drama, rather than in your Tribe.

 

 

 

TTP requires a Tribe

to help experience feelings.

 

DIM craves an audience

to help act out the drama

 

Clip: www.queenstheatre.org

Fri, 12 Dec 2003


Teachers

Hi Chief !

A true spiritual teacher does not have anything to teach in the conventional sense of the word, does not have anything to give or add to you, such as new information, beliefs, or rules of conduct.

 

The only function of such teacher is to help you remove that which separates you from the truth of who you already are and what you already know in the depth of your being. The spiritual teacher is there to uncover and revel to you that dimension of inner depth that is also peace.

Yes.  Special thanks to you and to my many other teachers and receivers for keeping me on task during the ever unfolding moments of now, including my turns on the hot seat.

 

 

 

 

Fri, 12 Dec 2003

 

Tell Me More

I’m interested in your website and “tribe”. Could you tell me more about your community.

 

Thank You.

You might check if you tend to ask people to do things, without being very specific about what you want.

 

You might also gather information by following the links above and by reading read some of the FAQ's. 

 

If you have specific questions, send them to FAQ.

Fri, 12 Dec 2003

 

Tribe


Hi Ed,

I'm a trader and manager in Hendersonville, NC ... would it be possible to start a tribe in the Hendersonville / Asheville NC area?

Thanks.

See Tribe Directory link, above.

Thu, 11 Dec 2003

 

Reno Workshop Feedback

Things in my life have changed the last 2 weeks. After a year of working at home trading my own account, I am back in full time employment.

 

I started my new job ... it is a bit strange being the price maker again and having to provide liquidity as opposed to just placing orders. This caused me quite a bit of internal conflict my first week as I struggled between covering customer business and running my own trend following positions (both on behalf of the bank's account).

I nearly quit on my third day out of frustration and thinking I 'should' be back trading from home, but fortunately calmer heads and SVO-P prevailed.

I have some very intense TTP sessions with my wife. She encouraged me to attend the Reno workshop, completely buys into the process and continues to progress with me as we learn how to send and receive. I am now able to focus on my feelings at work and separate the very short term customer business from position trades. The P + L and attitude are both now considerably better.

Ultimately I will return to trading my own account, but in the meantime this enables me to build up some more capital and is all part of living my dream.

Regards,

Yes.  Family is the Essential Tribe.

 

 

 

Creating the Essential Tribe

 

Marriage provides endless opportunities

for personal growth

and / or drama.

 

 

Clip: http://www.jtmweb.com/

brendabryan/wedding.html

 

Thu, 11 Dec 2003

 

Red and Blue

Dear Mr Edward Seykota,

In an air mail on December 10th, I had sent to you an idea for writing yourself an article in the financial newspapers, it is an interesting topic.

Please note that there is probably an error in this mail : - the letter with the red plastic cover is for you - but the two letters with the blue and the green plastic covers were not for you, so please destroy the two other letters, you don't need to sent them back.

I am really sorry.

Intention = Result.

 

Fred may be setting up some dramas for you about feeling blue about what gets read.

 

You might take your feelings of sorrow into TTP, as a starting point.

 

 

 

Patriotic Cheese-Head Hat

in Red, White, and Blue

 

Ideal Headgear for Processing

Spectral Issues

 

Clip: http://www.wi-mall.com/

cheesehead-hats-2-wisconsins-

cheeses-and-gifts-sports.htm

Thu, 11 Dec 2003

 

Gigerenzer, Adaptive Thinking,

and Adrenal Response

Dear Mr. Seykota,

I enjoy your website and articles --- thank you for making this resource available to the trading community.

 

A quick question --- when forming your views on the "amygdala hijacking" and how it relates to trading (and life in general), did you come across the tactical work being done by a group called Rocky Mountain Combat Applications Training or the work with heuristics / adaptive thinking being done by Gerd Gigerenzer's group in Germany?

 

Gigerenzer's work is fairly well known, I suppose, but RMCAT is not really discussed outside of a fairly specific group of reality-based martial arts instructors.

Essentially, RMCAT and similar groups use adrenal-based, simulation training to force self-defense students to act under conditions of uncertainty and fear.

The group has found that many *highly trained* individuals are not able to access their skills when they are placed amidst the messiness of a realistic situation and its attendant shocks (perhaps analogous to a continuous-time, volatility-punctuated process like the financial markets).

 

Because they have not trained in conditions that involve the same physiological and psychological issues as a real self-defense situation will, they react as if they have no training at all.

 

A period of depression and cognitive dissonance often follows, but confidence and positivity soon rise as the drills have time to fortify the individual's capacity for "ferocious resolve."

 

Only by starting with the reality of street violence (particularly the lack of substantive information and the physiological effects of "imminent danger") can a robust, successful plan of action be formed.

Anyway ... I hoped that you might find some of this vaguely interesting as it applies to our efforts to control what we can and let go of what we cannot.

 

I no longer view the markets as a Hobbesian war of all against all, but I do feel that some esoteric battlefield training techniques have indirect relevance to trading. As Bruce Lee said, "Soon or later, the man who wins is the man who thinks he can."

Warmest regards,

Gigerenzer's "fast and frugal heuristics," is another name for "rules of thumb."  One pretty good one is:  Trade with the Trend.

 

RMCAT puts people in combat condition to simulate acting under uncertainty.  Note: system traders only have to stick with the system during uncertainty (now and always)..

 

TTP tends to reduce "amygdala hijacking."  When Fred and CM share experience, the amygdala seems to reprogram holotropically (toward health).

 

You might consider taking your feelings about the markets as war, into TTP.

 

 

 

Gert Gigerenzer

 

"What interests me

is the question of how humans

learn to live with uncertainty."

 

 

 

RMCAT

 

Stick-and Knife Training

Simulates Acting Under Stress

 

"Fitty-fi bid, fitty-fi, fitty-fi ..."

"Sold double ... at fitty, foty, thudy ..."

 

 

 

Amygdala Hijacking

 

The amygdala learns to respond emotionally and immediately to various emergency situations, and "hijacks" new information before it reaches the thalamus.  TTP tends to promote holotropic amygdala reprogramming.

 

Clips:

 

http://www.edge.org/3rd_culture/

gigerenzer03/gigerenzer_index.html

 

http://www.rmcat.com/

 

http://www.eqtoday.com/

archive/hijack.html

Thu, 11 Dec 2003

 

TTP Peels Away the Layers, #2

Hi Ed,

Thanks very much for answering my FAQ posted on 12/7/03.

My question to you was somewhat ill formed. In my case, working with TTP in a group setting I have peeled away many many layers, I have had a series of small aha's or insights that finally led to a big AHA, there is no mistake in recognizing when this big AHA happens, it felt like floodgates had opened and led to a big outpouring of emotions.

 

In my case it seems like these small aha's are judges that needed to be resolved before the big AHA happened.

Although I have reaped tremendous benefits from TTP over the months, and the frequency of self-sabotage has diminished, this 'urge' to make non-system trades still seems to show up from time to time.

I was wondering if you could please provide some insights or a time line into this process of peeling away the layers until a issue is completely resolved?

To use a hardball analogy, if the issue still remains, does that mean there are still feelings in the 'stack' between me and the resolution of this urge that Fred needs to communicate?

The time line you seek likely runs from the non-existing past to the non-existing future.  I wonder when you intend to use it.

 

You might re-write your send in SVO-p.

 

You might take your feelings of wanting to stay in control of the process, into TTP, as a starting point.

 

 

 

When You Get To the Center

Of Your Onion

 

you get another onion.

 

Clip:

http://www.dqshrine.com/dq/dq6/onion.jpg

Thu, 11 Dec 2003

 

Religion

Hi Ed,

What are your religious beliefs? You seem to have a strong element of Christianity in your writings and attitudes.

One of my beliefs about religions is that they tend to converge with each other, at their basic tenets.