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

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June 15-21, 2003

 

 

Questions

Answers

Sat, 21 Jun 2003

 

Radial Momentum


Dear Ed,

This site on Radial Momentum is very interesting. Please excuse me for not being a Super scientist or Mathematician but I have some questions.

I am moving the discussion about Radial Momentum to www.radialmomentum.com

Sat, 21 Jun 2003

 

More about expansion chambers and radial momentum

Hello Ed,

I had an hour free today so I looked on the net to see if I could find any useful articles that might help you with your theory validation ... I am assuming that this is related to your work in radial momentum, and hence maybe of help to you in some way. If it is not please let me know.

I am moving the discussion about Radial Momentum to www.radialmomentum.com

Sat, 21 Jun 2003


Overcoming Barriers

Dear Mr. Seykota:

My mate and I ... are both interested in learning more about ourselves and in trading. He's reading "The New Market Wizards" while I'm reading "Market Wizards" - which we'll then "trade" with each reading the other book - we're also reading assorted philosophy books. Anyway, during our discussion last night, it clicked for me what one of the sources of my anxiety is in using real money. It was trying to calculate "how much" money I would make in the market.

When I paper traded, I was indifferent to "how much" I made in different trades - after doing the initial calculations, I went more with "how it felt" - but with real money, it started with the innocent question from my mate one day, "How much do you think we'll make?" My desire to please him had me doing all kinds of calculations and coming up with wild sums - which all fell flat.

Two things: I thought of that post on your FAQ about how Tiger Woods said his best days are not when he says he'll hit a low score; but when he goes with the flow. I always told myself the old saying, "Slow and steady wins the race." Small, slow profits at first are right for me at this time as a novice and until I gain more confidence in myself. However, I also remember the saying, "Take as much care at the end as you do at the beginning" since I have a habit of starting out really well and then getting sloppy at the end of something, anything, in a rush to finish it.

Finally, I'm coming to realize that trading is not really about profits; trading, to me, is more a way of being - a metaphor for life. According to Don Juan, we all have four barriers on the path to wisdom: 1. Fear 2. Clarity 3. Power and 4. Death. Well, death appears to be inevitable so I might as well enjoy the journey - it seems we all reach the same destination.

Perhaps you might use Fear, Clarity, and Power as starting points for TTP.

 

One TTP process is to re-frame "bad" feelings, like your anxiety about real money, so as to celebrate their positive intentions.

 

 

 

Fear

 

The positive intention is to avoid trouble.

 

 

Clip: www.cancerhelp.org.uk/

help/default.asp?page=218

 

Sat, 21 Jun 2003

 

Trapped

You might focus on the feelings that come up during key points in the cycle, take these into TTP and go for release.

As I resolve my major emotional issues I acknowledge subtler dramas, such as:

Finding myself into an intellectual self-induced loop which translates into a necessity to be talking endlessly about feelings to others and to myself (inner conversations), precisely to avoid them;
Inducing dramas to have something to talk or think about;Self-induced workaholism;
Rationalizing the entire TTP.

At this point I see I need the assistance of a good receiver as the drama looks like a vicious circle from which I cannot break free.

I am planning a seminar on TTP in general and on receiving in particular, later this year.  Meanwhile, you can practice with your Tribe and learn by trial and error.

 

You might start with the feeling of being trapped in your own mind.

 

 

Trapped

 

Thinking of ways to escape is part of the trap - experiencing the feeling of being trapped sets you free.

 

Clip: www.heidihooper.com/trapped.htm

Sat, 21 Jun 2003

Getting to the Point

"Talking about feelings in abstract is drama."

And being fearful of talking or thinking about feelings because this is supposed to be a drama is also a drama. I am often fearful of talking about trading because I feel that talking about it leads to failure.

Try experiencing your fearful feelings, in community with others, rather than just talking about them.

 

 

Fear

 

is typically one of the feelings of being long in a bull market. Willingness to feel fear can help traders stay with winning positions.

 

Clip:

www.rom.on.ca/shops/ repro/10.html

Sat, 21 Jun 2003

 

Radial momentum, exhaust pipes,

chess and the Simpsons

have very little to do with trading ...

Hello Ed,

I was reading your experiments on radial momentum and ... I wish you luck with your research, and I find it refreshing to see someone with guts to go up against the so called traditional methods of doing things, I know what you are up against Ed, as I wrote letters the Suzuki, Yamaha, Honda, Rotax, Kawasaki, trying to explain the benefits of my "opposite exhaust port engine" that I designed and built, but that's another story.

Regarding the chess game, I would enjoy very much to play against the TT, providing the members agree not to use computers to assist them. If you toss a coin to decide who is white, I will call tails and play 1 e4, if I win.

If I lose and TT plays 1 d4, my reply will be 1.... Nf6, if TT plays 1 e4, I will reply 1... c5. I would be surprised if any other first moves are made.

Are you intending to paste and image of the game in progress? That would be very helpful to the players, in case they have lost their move records.

Judging by the highly intelligent postings on your Radial momentum site, it seems likely that if too many of the people who posted them are recruited to play, then I will be soundly beaten!

I like the use of the Simpson's pictures to make your point, it springs to mind the episode where Homer is Mr. Burns assistant and Burns says to him while having breakfast in bed, "look in the paper and tell me how my stocks did Simpson"

Homer: "They all won"

Burns: "What about my options"

Homer: " Well you can either get up or stay in bed "

The Trading Tribe is an association of traders who commit to excellence, personal growth, and supporting and receiving support

from other traders. See home Page.

 

The Trading Tribe uses many resources, including computers.

 

I offer the Trading Tribe chess playing example to show, in yet another way, the incredible power of intentional community.

 

 

White to Play and Win.

 

Tribes can generally outperform individuals.

 

Clip:

http://otcricket.beermonkeys.net/

Sat, 21 Jun 2003

 

On Diversification

Dear Ed,

In his "Mathematics of Gambling" paper,

www.bjmath.com/bjmath/thorp/tog4.pdf

Ed Thorp demonstrates optimal Kelly betting in roulette, (with a positive payoff system Shannon and he had devised) and writes:

"for the roulette single number example ... after 1000 bets you will have approximately 11.47 times your starting payroll. Suppose instead that we divided our bet among the five most favored numbers ... after 1000 bets you would have approximately 1.25 million times your starting payroll. Such is the power of diversification."

By betting on 5 numbers in each roll, you can increase the optimum amount
you bet and therefore the growth rate of the capital.

Maybe you might think of extending the diversification section in Risk Management paper to include this interesting concept.

Off course, in roulette case, the numbers are mutually exclusive. But when you bet in 5 markets, you can very easily lose in all 5 of them in that single case. The potential co-movement of the markets will come into play. We can do simulations on this off course, but a good and simple theory (like
the case with Kelly ratio) has no substitute.

You can help with your insights on this subject those of us who may be
interested.

If have a positive payoff wheel  ... or a way to pre-determine the favored numbers, you can get pretty much any result you want.

 

Roulette Wheel

 

Pays 35:1 every 38-th time.

 

Can pay anything you want

in theoretical studies.

 

Clip: www.reagan.dk/newlin.htm

 

Thu, 19 Jun 2003

 

Getting Past the Barriers


Dear Mr. Seykota:

I've been paper trading for several years and recently started using real money in an account. I've noticed that when I paper traded, I was more relaxed and didn't scrutinize the daily quotes; but when it came to using real money, I started getting overly concerned with the results.

It's almost like a form of stage fright when I started using real money. I also noticed negative memories going through my head. I believe I may have a fear of success, but don't know why. It's odd, whatever I've set out to do, I've usually achieved initially, but then either I failed or I lost interest.

I did notice one thing about myself and this came to me after I read your comment in "Market Wizards" about everybody getting what they want in the market and their priorities. What I discovered about myself was that when it came to real money trades, I was more concerned with pleasing my mate than making a good trade. In other words, my instincts were to go for a smaller profit, but a profit nonetheless; while I held this in check and tried to hold out for the "big payoff" that would make my mate happy. Two things: 1) in reality, the money would not make my mate happy and 2) I think subconsciously, I might want to screw up and at the same time blame my mate for my actions.

I've been attempting to overcome my own personal barriers with proper nutrition, sleep, exercise, doing other things than the market, study and subliminal tapes to program myself. I also use a website that tests my psychic ability; but I don't use it to test my psychic ability. I use this site to gauge my attunement. The site uses a computer program that randomly generates the card sequence or hidden dots. I've found that when I am physically, mentally and emotionally relaxed, I can do quite well. This is reflected with an odds ratio. I've also found that if I get into the proper mental/emotional state and form an intention of getting over 50% of the card selections right, I can do it. (Odds of 31,559 to 1 - 13 out of 25 cards).

But this is a tricky state to achieve in that it's a form of focused unfocused-ness. I can't explain it verbally because it's not really a mental thing, it's more of a feeling. Sorry for rambling on. What I want to know is if you have any additional suggestions on how I can overcome these barriers. I feel I'm on the right track and it may just be a matter of me keeping on doing what I'm doing and time; but is there anything else that you can suggest?

Thank you for your assistance.

--- PS ---

I think I forgot to mention that all the things I do to achieve attunement are in addition to charting and looking at the technical aspects. I think trading is a combination of science and art; psychology and intuition and I am attempting to find a balance between them.

--- PPS ---

Me again. Guess it's apparent I just discovered your site. Anyway, wanted to tell you I enjoyed the link to the time traveling trader. I certainly believe time travel is, or will be, possible at some point since all time is the ever-present now with future and past only really existing in mind. Basically, we all time travel all the time in our minds already.

But what got me was that this guy was arrested because he went from an $800 account to $350 million in two weeks - so of course, the SEC thought, he had to be doing inside trading. But if this same guy were to LOSE 350 million dollars and run it down to an $800 account in two weeks, the SEC wouldn't blink an eye - would probably just assume the guy was stupid.

However, with our legal-oriented society, if the guy were a scammer, he'd probably sue the exchanges because he lost money. I think that's actually happened. Enjoy your site immensely.

Analysis of problems is just more drama ... take the feelings of wanting to get past the barriers as a starting point for TTP.

 

I keep calling the time traveler for more information ... and he keeps calling me back tomorrow ... so we keep missing.

 

 

 

Crop Circles

 

Some credit them to mystical origin or to extraterrestrial intervention. Others show how to make them and recommend doing so at night.

 

Another strange psychic phenomenon: psychics, who supposedly can see into the future, still have to charge for their services.

 

Clip and Information:

www.csicop.org/articles/

april_fools_1998/

 

Thu, 19 Jun 2003

 

Athens Greece


Hi Ed,


May you get an AHA for every click at your site!


Thank you for your technology of TTP
I would like to start a community in Athens, Greece.

 

Welcome

Athens !

 

See: Tribe Directory Page

 

 

Acropolis

 

Where They Play the Spread Between

Old Cropolis and New Cropolis

 

Clip: www.bellavistatours.com/

greece.htm

 

 

 

Thu, 19 Jun 2003

Chess Puzzle


Hello Ed,

There is little point in posting this on your site, but I don't mind if you do.

I was reading one of your earlier postings on Friday 21 March that had the chess puzzle, and the answer is 0-0-0 checkmate. (castling lonside).

I love to play chess, and used to play for Wanstead and Woodford chess club, and also represented my county (Essex) on several occasions.

What I like about it is that you can tell an awful lot about the character of a person by engaging in a game.


I used to play people at speed chess, while at the Edinburgh festival, and once encountered the Dutch champion of 1973, who beat me.


I would like to give you a game over the Internet, and if you would like to also then you can find me on yahoo messenger. (That has a chess board chat facility)
If you don't have messenger, you can download it free at www.yahoo.com

Being a trader, I am usually online, and frequently have quiet moments free to play.

I will wait and see if you accept my invitation.

How about you play against the Trading Tribe. I can post your moves to this site and then gather a Tribal consensus about the best response.

 

If you concede the Trading Tribe might be a very formidable ally for me, you might consider joining one / starting one to support your trading and other ventures.

 


 

Chess Decision Tree

 

From Chess 5.0

 

Clip: www.chaosreigns.com/

code/cinclude2dot/

Mon, 16 Jun 2003

 

Radial Momentum
 
Dear Ed

I read most of your Radial Momentum Theory and found it most interesting and novel.


Since I was born during the Battle of Britain (1940) I developed a passion for the Spitfire fighter plane and fully intended to become a pilot in the RAF. To further this ambition I joined the Air Training Corps as a cadet at the age of 15.

 

In the lectures about aeronautics we were taught that lift was generated by airflow over the classic aerofoil shaped wing. ( No mention of Bernoulli) but I did think to myself that how come planes could fly upside down ? Not wishing to cause any trouble, I remained silent - a good political judgment as I was to later learn....

In high school physics we had a practical where we had to measure the earth's magnetic field using compasses and magnets. I duly wrote up the experiment and used the actual results I obtained, which were not in agreement with the textbook figure.

 

The physics master marked my work 10%. When I protested, he advised me that my result was too far away from the accepted figure to merit anything better, particularly since everyone else in the class had the "correct" result.

 

I told him that everyone else had back adjusted their results with their slide rules ( or fiddle sticks) and that it would have been impossible to come up with the accepted answer, because there were a profusion of iron gas pipes around the lab which distort the magnetic field. He said to me " You are a trouble maker." Much to my chagrin I became the rebel of the school overnight.

You may be falling into the same trap if you are not careful !

I would also like to make some comments, which I trust that you will consider constructive.

The title "Radial Momentum" is perhaps too grand and all encompassing at this stage.
From a personal standpoint I thought this title was also misleading. By the way, I am a metallurgist by training and my knowledge of fluid mechanics is strictly from reading your work.

 

I would suggest "Radial Expansion of Laminar Flow" which I feel is more specific and more descriptive. You might also be wise to describe the work as an alternative to the Bernoulli Theory rather than an outright replacement even though I agree with your reasoning.

The diagram of the concentric circles I also found misleading. I thought you were going to come up with a new flying saucer design until I delved more deeply into the text !
I look at it another way with lines drawn radially from the center hole of a single circle or as a series of megaphone shapes joined up to make a circle, where it seems easier to grasp the expansion idea.

I noticed from correspondence that you seemed willing to go back to college. I think you know more than the professors to be candid. You could perhaps submit the work as a Ph.D. thesis though, if you wanted to. In England the requirements of the degree are:

 

That you make a contribution to knowledge.

That you place this contribution in relationship to earlier work in the field.



In the Ph.D. theses I have read, which are available in any university library, the Literature Survey takes up quite a big chunk. Reading scientific journal articles also gives you a sense of the format required for submission e.g. Trans A.S.M.E


One word of warning on using a collaborator- it is usual for the "senior" person to have his name first on the paper even though the second guy did all the work e.g. Doe and Seykota, and the first guy gets most of the credit.

 

Also I would suggest that if you do submit your work to a learned journal, you might be better off doing a series of papers
each one with a different application even to different journals. I know that published work enhances a Ph.D. thesis too. You can put yourself in the Literature Survey section!

So, adjust your angle of attack and you will go supersonic !

With kindest regards,

My RM theory has elicited a fair measure of feelings from the scientific community.

 

One professor of Fluid Dynamics told me that I just can't be correct since it would be one of the most radical innovations in the field for the past several centuries - and

 

Traditional analysis simplifies Navier Stokes by assuming the fluid (air) is non-compressible.

 

RM theory involves induction of density decrease by particle momentum. 

 

The basis of lift is, then, of all things, compressibility. So the very heart of the theory precludes application of the standard tool set.

 

I use step-wise solution of a system of integral equations, rather than closed-form differential equations.

 

My results agree with experiment, the other standard models do not.

 

So far, the scientific community is advancing disbelief, condescension,  anger and resentment.  It is not advancing any particularly convincing science to disprove my hypothesis.

 

For now, I am publishing to my web-site, awaiting a breakout along the line of least resistance, toward more formal publication.

 

 

When you blow air through a cone,

it collapses.

 

 

When you blow air through a tube,

it does not collapse.

 

To find out more about all this, see www.radialmomentum.com

 

 

 

 

 

Thu, 19 Jun 2003

 

Scissors

see: reference


The scissors drama had to do with misuse of positive thinking. When I was about 13-14 years old I did a lot of visualization sessions by myself so as to impose some positive images to my subconscious mind. Fred found a way to tell me he wants freedom.

Then I proceeded. No labeling or judgment about the scissors. I did not interfere with the daydream. Eventually, release of tension followed in a trance-like state. Inner peace. Sense of balance and harmony. Now I am dealing with some memories from the past I had tried to repress or ignore as they were labeled as negative. I have always avoided such memories because I would rather not to think about them.

Yes.

Thu, 19 Jun 2003

 

Trend Following

I have an [intentional community] member with whom I proceed with the "feelings" part of trend following. Thanks.

OK.

Wed, 18 Jun 2003

 

Risk

 

Dear Ed,

After reading and rereading your section on "Risk Management" several times in the last few weeks, tonight I am finally understanding it clearly. I still need to study the formulas more. I will work through them. The charts really help.

Figure 3 really hit home. Even with a small account like mine a 25% bet over time can beat the crazy bets I am taking! Bets over 50% of ones account can bring a traders account down also! I am betting over 100% of my account sometimes. What the heck am I doing and how did I survive so long? I guess just cutting losses kept me alive. My broker has frequently said he never saw anyone cut losses as good as me ... I guess that is my strong point (Most of the time!).

Thank you for giving me yet another advantage with my trading.

I think that Fred has surfaced again. I wrote before how my parents lived through the depression era. Aha! I think my big bet making is yet another feeling of lack, along with my not wanting to re-buy a stock higher. There are 10,000 stocks not to mention other trading vehicles. If I miss out on piling fully into one, there will eventually be another. No that is not the full issue I have ... ????????

This is hard to write but at this moment I think I am coming very close to the feeling that has been affecting much of my trading negatively.

For some crazy reason I keep thinking something like "If I don't pile into this stock on full margin, I might not get a stock as good as this again!" How crazy is that?

 

I also am thinking "I wish my parents could have been alive when I make it big.". I think that this makes me in a hurry to make money. Another crazy thought ... still not it something deeper ...

I almost feel some sort of guilt for something I cannot pinpoint now. I am trying to get it but cannot quite get what it is?

What ever it is has also stopped me from re-buying some good stocks. Something crazy like ("I can't get back in.") even though I could just easily buy. I feel like someone is playing a game with me and taking my money and laughing at me. Like they know exactly how to take my money or something ... like they planned to get me to buy and then just reverse and sell off the stock so I don't re-buy and then I miss big moves in stocks over and over again ... AAArrrggghhh! "How strange?"

I think I am getting closer to some issues. I am still a little stuck though ... I feel it ... something I cannot get to close to the Fred feeling holding me back. I will try to get it. Something about trying to buy perfectly ... ouch headache!

I need to think about it.

Thanks

Yes.  Identifying dramas, associating feelings, and fully experiencing the feelings is the work of the Trading Tribe. A good receiver can help you locate and develop the feelings.

 

 

Risking 100% and Watching it Closely

 

has all kinds of interesting side effects.

 

 

Clip: http://www.cartway-kapers.com/

masks.htm

 

Wed, 18 Jun 2003

 

Tendency

Ed

 

You should notice your own feelings about replying to my earlier post with a bunch of math that no one but you understands.

 

You should also examine your feelings about telling someone you have never met that they have a tendency to rely on others.

FAQ is a classroom forum in which traders can ask questions, become examples, and support each other. See Ground Rules.

 

You might examine your feelings about bothering to understand things, like the basic math of trading.

 

You might also examine your feelings about telling people what they should do. 

 

Trying to tell the market what it should do can be expensive.

 

 

 

Hey, man, what's up with that?

 

the Markets don't go

where I tell them they should go.

 

 

Clip: http://nohomers.net/cbg/

images/fear.gif

Thu, 19 Jun 2003

Blockage of Fear: Good or Bad?


Hello Ed,

I must say that you are very perceptive person, and also that nobody has ever told me that I have got fundamentalist tenancies before.


In my attitude to other traders styles and methods, I tend to preach to them and try to explain how their ideas are generally weak in terms of long term success. ( Assuming of course that they aren't trend following )
I do have a very strong belief and faith in my system and my own ability to call the market moves.


So maybe I am a fundamentalist . Do you think this is a bad quality with regards to trading psychology?

Your comments about having "a blockage of fear" are very interesting, so much so that I have thought for many hours about them.

I also talked in depth to my closest trading associate about these comments, he agreed that he hadn't noticed any evidence of fear recently.

You may or may not remember me telling you, about my trading being slapdash, risky and highly spasmodic in the early part of my career, and now my trading is methodical, simple, risk orientated, and gives very good risk / reward ratios.


I remember fear being a normal part of my old style trading, as I was far too leveraged and didn't take a balance of short and long trades (only long).


I feared often then, but in the last 3 years I can honestly say that I haven't even felt the slightest twinge of it.


Whether this is good or bad, I don't know, but I like to think that my trading is more OBJECTIVE if fear is not a part of my daily mood.

I can remember two examples where fear and lack of fear made a HUGE difference to my trading.

1. Fear influenced trades (1997)

On 28 October when the "Asian flu" was going around the markets, I was long many stocks ( incorrectly as the trend was down ), although I should have been short, I was inexperienced and not disciplined.


I was geared 62 times, on my tiny margin, and already suffering a nasty loss on my trades before the opening!


I recall watching in horror as the London market collapsed around 500 points lower in the first few minutes of trading.


I had already called my broker at 7.45 am and told him to sell all my positions, and called him again to ask why he hadn't sold them fast enough.


I remember him saying "Its going up again now" , and replying in a blind panic " Sell all the rest of my stocks!" I continued to panic even as the market strengthened, such was the fear instilled in me! and this was the mistake part of my trades caused by fear and panic.


Funnily enough, the market rallied hard later on, and I wouldn't have lost a penny if I had have done nothing. I recall making a mental note, that if I ever saw the market fall like that again, I would not hesitate to sell, had I not already done so, because I could have lost many many times more than I did had the market kept falling and probably would still be in debt to my broker some 6 years later.


It was interesting to note that I was the only client who had given pre-market sell orders to my broker that morning.

 

It took me around 3 months to pay back what I owed my broker. I wont forget that experience easily.

2. Calm trade (2001)

I remember a November afternoon at around 2:15pm London time, while I was carrying a [xxx] contract long position in the FT-SE, I was watching the E-Mini SP500 futures pre market to see how the US opening would pan out, and saw them suddenly go from being up 2, to being down 8 points in a matter of about 20 seconds, I knew that something bad had happened but not what it was, I distinctly remember staying extremely calm, and pressing the speed dial button on my phone to the [xxx] firm I was with, by the time I got through, the SP futures were 12 points lower.


I calmly asked for a quote in the FT-SE, and then shouted, SELL [xxx] at the top of my voice as soon as I received my quote.
Nobody at the firm had noticed the SP dropping, and shouting could be heard as the traders began to wake up after hearing my sell order.

I felt no fear, only a healthy instinct to reverse my long without the slightest delay. (It was a gut feel trade, where no thoughts are required because the market direction was so very obvious and hence represent a very rare and fine opportunity)


As you said in market wizards, " follow the rules without question, know when to break the rules."


I didn't wait for a sell signal on my system. I didn't need to. Several minutes later the news came out that a plane had crashed in Queens New York, and an internet trading chat room had alerted the SP traders to the crash before the news hit the streets. (Hence the sell off)


I was saddened to learn that the reason behind my fine long exit-short entry was another terrible disaster.

I think I may have missed your point, because I fail to see how it can help ones trading if one is experiencing fear. The reason as I perceive it, is that I don't feel fear in my trading recently because:-

1. I avoid carrying any overly large positions.
2. I use stops.
3. I use position sizing algorithms.
4. I have faith in myself and my system.
5. I hedge my trades with options.
6. I am watching the market action all day.

I also think that if my nerves were jangling with fearful feelings then I am more likely to make bad decisions in my trading, as I did in 1997.


I am of the opinion that trading small has helped me tremendously to REMOVE fear from my trading, and maybe this is why I no longer seem to experience it.


Maybe that means I am trading too small?
According to your example "Kelly formula" I should be risking 52% of my capital on each trade.


To me that seems like a catastrophe waiting to happen. I trade so as to risk no more than 2% of my capital per trade, and most of my losses are less than 1%.


Your feedback on these points would be appreciated.

Regards

P.S

In my last mail titled "Imprecision" one of my questions regarding your trading remained unanswered.


I don't expect you to print this part of my mail on your site, but I would appreciate an answer to my questions.


Also I am curious as to why you didn't publish my trading system results and statistics for the relevant models, after I had spent considerable time ensuring that results were accurate.


In your last reply you informed me that some of my phrases were violations of SVO-p grammar, which being from England I have never heard of, and nor have any of my more literate English friends.


Perhaps you would be kind enough to explain it to us or point us to a website that does.
Also the word (sic) was added, which I don't understand either.


I am not engaging in communications with you for the purpose of being ridiculed for my poor grammar, but to share with you and others my trading experiences.


That is all I am here for Ed, and I hope you can understand that. If you do not want my input on your site then please tell me and I will not post anymore mails.


I enjoy reading your deeply intelligent replies to traders problems but I have a dislike for sarcasm, as I think most English people do.
(No offence intended)

Fear is the feeling of danger.  People who do not feel fear, take on a lot of risk and get into trouble.

 

When Fred feels fear and communicates it to CM, Fred and CM work together to manage risk.  Fear and risk become natural elements to achieve balance in life.

 

When CM ignores Fred's fears, Fred engineers situations, such as taking on too much risk, in order to deliver the fear message through external drama. Fear and risk typically take large excursions as life passes from crisis to crisis.

 

You seem willing to listen to your fears. As such, your fears generally disappear and become aha's and insights about how to manage risk.

 

---

 

FAQ does not publish trading records or endorse traders or systems. See Ground Rules.

 

The suggestion toward accuracy still stands, as it is generally good practice.

 

SVO-p Grammar, (Subject / Verb / Object / present tense) is a template to facilitate assigning responsibility for action and staying in the now.  These practices seem consistent with and support trend following attitudes.

 

---

 

I am particularly attentive to offending our ancestors over on the other side of the pond.  After all, anyone who can invent spotted dick and bubble and squeak can't be all bad.

 

 

The Positive Intention of Fear

is risk control.

 

Your experience of collapse

may depend on your position.

 

Clip: www.jokeuniversity.com/ picpages/

fear.php

 

 

 

 

 

 

 

Thu, 19 Jun 2003

 

A note of Thanks.

Hello Mr Seykota,

I wanted to write a short note to thank you for inspiring me to keep my chin up and continue my dream to be a trader. I am a 22 year old market obsessed trader. Ever since I asked about what the columns meant in the newspaper when I was 12 I havenít been able to get the market out of my head and itís just getting worse as I get older. I spent my entire university career studying the market instead of my school work, and have taken numerous evolutions through self developed trading strategies. Each night I wait for the opening bell at 11:30pm (Sydney time) to vigorously test my strategies before getting a couple hours sleep until work the next day as a business analyst.

At the moment I am going through the stages that I read you went through during the 1960ís when you first entered the market. I have $4,000 from the sale of my car and Iím trying to make my strategies come to life by opening a margin account and trading my strategies that have proven high and consistent results over long periods on paper. I have just started trading and subsequently losing money. On my first night I felt like I was going to be sick, and my mind started playing tricks on me.

Essentially I read about you and was stunned that you went through what I am going through now, I thought I was alone and destined to fail. Iím sure you must have felt the depression when you think that your dream to trade that pushes you through life was all a dream. But you made it through and now beat the market for a living. I admire and respect you like a Hollywood star and one day hope to cross your path as a professional trader.


Best Regards,

To stop using the markets as a justification for feeling the sickness, locate the feelings  and resolve them with TTP.

 

 

 

 

Marketitis

 

Which comes first,

the feeling or the bad trade ?

 

Clip: www.henry.k12.ga.us/pges/

ingram/brochure/K-brochure2.htm

 

Wed, 18 Jun 200

Who Am I

Ed,

Thanks for having this online forum, it is very enlightening.

I find myself utilizing the markets as a forum to play out my need for validation/self-hate drama.

 

I tie my self esteem to weather I win or lose that day.

 

When things are going well, I feel good about myself, as if trading well makes me a good person. After things go well for a while, I change. I have yet to tap into the feelings that trigger the change, but I am searching. The change brings on a person who enters early, overtrades, and ignores the reality of what the market is saying. This drama continues, until I reach a breaking point and I am thoroughly disgusted with myself. As if to reaffirm that I really am the person that part of me hates.

This drama plays itself out in my relationship with my children, with my wife, and in my business dealings. I realize that I spend a good deal of my energy trying to validate my self worth. In the process I have built up a network of rationalizations and defenses to justify my behavior and protect my false image. It was a hard pill to swallow, but jumping the fence from "I am not a loser" to "I am a loser and want to change" was a very liberating mind shift.

I am now in the process of self-examination. Nothing is off the table in this process. I have resolved to become a person that I can respect. I have no doubt that this process will make me a better person, and in the end, that is all that really matters.

Thanks for opening this door for me.

Yes.

 

You might focus on the feelings that come up during key points in the cycle, take these into TTP and go for release.

 

 

 

Acknowledging the Drama

 

leads to dissolving it

 

 

Clip: www.hygun.com/drama.jpg

 

Wed, 18 Jun 2003

Checking in (It has been a long time)

Hi Ed,

It has been a long time since we communicated. I remember reading Market Wizards for the first time back in 1989. I was
attending [xxx] University at the time.

 

That was when I had first heard your name. I wrote a letter to you looking for some direction when I was in college. You had phoned me on two occasions and we had several great conversations on where I could gain knowledge and experience. For that I am quite grateful for your very productive input, thanks a lot.


I really learned alot from you in those two conversations we had,
once again, thanks for your time.

I am looking forward to learning more about your "Trading Tribe".  One thing you taught me back in 1990 was to use an index
cards over charts and actually get a "feel" of a trade from start to finish, one day at a time.

 

Many things you have already taught me have gone a long way in my career. I am looking forward to spending more time on your website reading the rules, philosophy, etc.

I have always gotten a lot out of what you have to say. Thanks for being
open to listen to others. I look forward to learning more and hopefully contributing to the efforts of the "Trading Tribe".

Best,

OK.

Wed, 18 Jun 2003

 

Feeling, thinking, trading, sharing, intention


Hi Ed !


The Trading Tribe Process addresses the emotional (and consequently 'dramatic' life of a trader) and your Trading Tribe web site is doing so much more.

 

You regularly address how to think in general (personal responsibility, logic, critical thinking), and how to think about trending trading specifically.

 

You are not yet directly addressing how to conduct an ongoing trading tribe (though you have given suggestions here and there), or how to create an intentional community.

 

This is appropriate as the TTP is at center of these relationships and they are different kinds of knowing and doing. Are you thinking of creating materials for each of these as well?

Several Tribes and Intentional Communities are forming around the world and are experimenting with TTP. 

 

TTP seems to transfer much better in person, through example and practice.

 

I am currently preparing to host an Introduction to TTP weekend at Lake Tahoe, likely in October.

 

 

Later this Year at Tahoe

ed, 18 Jun 2003

 

A Quote


"I have taken great care to understand human actions, and not to deride, deplore or denounce them.

 

I have therefore regarded human passions like love, hate, anger, envy, pride, pity and other feelings that agitate the mind, not as vices of human nature, but as properties which belong to it in the same way as heat, cold, storm, thunder and the like belong to the nature of the atmosphere.

 

Inconvenient though they be, such things are necessary properties; they have definite causes through which we try to understand their nature, and a true understanding of them gives the mind as much satisfaction as the apprehension of things pleasing to the senses."

 

- Baruch Spinoza, 1677



Hi Ed !


I roused myself from bed with the thought that the Trading Tribe contains multiple levels of knowledge and competencies.

 

For a Sender and Receiver it's the Trading Tribe Process.

For a Tribe meeting, it's group dynamics and group process.

For an Intentional Community, it's how to sustain something over time.

 

Yes.

Mon, 16 Jun 2003

 

The Screen Behind the Mirror

See: Creative Dialog


I have a feeling of deep loneliness inside. A feeling of emptiness or void. I create conversations to fill this vacuum. Great part of my life, as a matter of fact, has been an attempt to fill this vacuum.

Talking about feelings in abstract is drama.

 

Expressing specific elements of feelings in an Intentional Community to assist Fred to communicate with CM is TTP.

Mon, 16 Jun 2003

 

Great Story: Conscious & Subconscious

A baseball story to be sure...but it's about a young pitcher who seems to be struggling with the very issues you teach in your Tribe process:

http://espn.go.com/mlb/s/

2003/0615/1568307.html

Yes.

Mon, 16 Jun 2003

 

Insight & Feeling


Dear Mr. Seykota:

I think someone may have already asked a similar question in the FAQ, but I couldn't seem to find the postings again. Can you please go through it again?

 

It is that in the attempt to communicate with Fred, I have gained a lot of insights as it becomes clear to me the motivations on why I do certain things. I greatly appreciate the experience as I believe I now understand myself much better, yet I have a difficult time actually feeling the feeling, like the color or the temperature and etc.

Is there something in me that tries to protect me from accessing those feelings? If the goal is for Fred to communicate with CM, is insight a form of communication? Or is the process "incomplete" with insights and no
feelings?

Many thanks for the FAQ.

CM produces theories and logical concussions.

 

Fred's communication of experience to CM accompanies a surprising release of tension, spontaneous transformation of the feelings and intuitive insight.

 

 

Surprise

 

is an element of the aha experience

 

Clip: http://home.att.net/~happy-memories

/pix/surprise.jpg

Mon, 16 Jun 2003

 

Thank You


Thank you for your insights in FAQ this week.

Two greatest teachers I've known: (1) you; (2) the market


I happened to read this today: "Resentment is like taking poison and waiting for the other person to die." -- Malachy McCourt

regards,

I consider Gravity to be an excellent teacher. It is consistent, non judgmental, and teaches everyone how to walk without saying a word.

 

 

Gravity

 

The force of gravity at the surface of the earth is F = GMm/r^2. No one knows how gravity teaches us how to walk

 

Clip: http://physics.hallym.ac.kr/education/

hep/adventure/gravity.html

Mon, 16 Jun 2003

 

Value of EMA


Ed


Thanks for the lesson on the EMA. Is there a simple methodology (or application) that one can use to calculate the correct sampling interval for the M/A of choice? Or can you expand on this issue? keeping in mind that many participants on the TT site (myself included) are non-technical. Thanks in advance.

You might notice your feelings about math and science and "technical" topics - and your tendencies to rely on others to explain things to you.

 

When you intend to master the math, you may find the answers to your questions - or even ask questions that make sense.

 

 

The Greek Symbol, Pi

 

looks a lot like TT.

 

Clip: http://highschoolhub.org/

hub/math.cfm

Mon, 16 Jun 2003

 

Sticking to his Golf System

On Sunday June 16, 2003 ... Jim Furyk (and his father) won the US Open golf championship.

 

Over the years, the media has questioned his unorthodox swing techniques and his father's coaching. Many golf analysts have wondered how a swing like Jim's can work on the pro tour. Jim has stuck by his father's teachings and has never changed his swing. Congratulations to Jim for sticking to his system and watching it pay off.

Yes.

Sun, 15 Jun 2003

 

Found


Mr. Seykota,

It is funny. After reading Market Wizards, I spent a great deal of time to find out more about your philosophy of trading; especially during a drawdown period of my short trading career. This was all in the hopes that I could glean something useful from you to help me be a successful trader.

 

What I failed to realize then but what I know now is that all of the answers were inside of me this whole time and that it was not you that I was looking for, but myself.

 

What is funny is that after finding myself, I have found your website.

I have just arrived at your website, and I find it curious that there is no branch for Chicago. When the time is right, I will apply to the Incline Village Trading Tribe as instructed on your website.

Sincerely,

Yes.

Sun, 15 Jun 2003

 

Hope


Iíve had a lot of time to think since my Ďexperienceí. I still donít know if it was an A-HA. Perhaps I was looking for validation in my last email. In any case the experience has given me hope. I see the potential of the TTP, and am intent on learning and practicing the techniques to make me and my life better, and if they are willing those around me.

 

Being able to feelÖjust feel and not be, is empathy. The feelings I donít like or are uncomfortable with, I avoid, because they are painful. But to experience the pain, discomfort, and unlikable qualities of whatever feeling presents, it can open a window through which the world looks different and things begin to make sense.

I think the TTP teaches people to be more empathic and sharing it with those who have come to your site has given many hope. I feel deep gratitude towards you and thankful to myself for having the perseverance to continue my quest to become a successful trader. If I had given up or not had the drive I would have never discovered your site, and the Trading Tribe Process

A line from a poem I like keeps popping into my thoughts for some reason. I think it pertains to the process or if not has given me direction for feelings to examine.



Is It True

 by Sarah Williams.

 

It is it true, Oh Christ in Heaven,

That the mark of rank in nature
Is capacity for pain?
And the anguish of the singer
Makes the sweetness of the strain?




I have so much to learn and unlearn that my mind seems stretched with thoughts, but it feels good.

Cheers,

Yes.

Sun, 15 Jun 2003

Short Term Trading


Dear Mr. Seykota,

Thanks for your response. I can see what you mean. I have been trading as a long term trend follower for over a year now but was thinking of trying short term trading at the same time. Thus I suppose I am trying to justify my position.

When I wrote the question, I was thinking specifically of professional futures day traders who pay only exchange clearing fees per trade.

 

On the Bund futures in Europe this is about 20 euro cents per trade. It is much lower than the average commission charged by a futures brokerage. That is why I thought it may be as profitable as long term trading. Plus the compounding effects of course.

Thanks again

Consider trading frequency.

 

You might trade about once per:

 

century

decade

year

quarter

month

week

day

hour

minute

second

millisecond

nanosecond

femtosecond

 

Each frequency has its own style

 

At some point, you encounter practical limits to implementing very high frequency trading. One of the results of TTP is to find the style and frequency that suits you.

 

To the extent your trading frequency is a function of Fred working dramas to get your attention, your frequency may be sub-optimal from a profitability standpoint.