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June 8-14, 2003

 

 

Questions

Answers

Sat, 14 Jun 2003

 

Risk Management

Hello Ed,

I thought one possible addition to your risk management article that might be of some benefit could involve a comparison of short term vs. long term trading.

(Below are some of my own observations I thought I would share).

What I have personally observed is while trends run longer (point wise) in the long term, risk (point wise) also increases proportionately since pullbacks that set up the breakout are also deeper. For example, a 400 point advance might have pullbacks of, say, 80 points. If one looks for something longer than this, perhaps an 800 point advance pattern that occurred, they might find 160 point pullbacks along the way. Risk in each pattern being 1/5 the potential profit (without commission considerations).

Now, I have also observed that if I have a fixed amount that I am prepared to risk, say $100 per trade, that in the second example above I will need fewer shares than the first example and thus incur less commission. This appears to be true UNLESS my minimum risk tolerance decreases to an amount that minimum commission is charged even with any decrease of shares.

For example, let's say that a long term pattern would produce the same profit ($50) as the short term and where each has a risk of $10 (my maximum loss tolerance). The only difference would be fewer shares needed for the long term trade, thus let's say that 50 shares are needed for the long term and 25 shares for the short term trade. Let's also say the brokerage company charges a minimum commission of $5 for up to 100 shares. Thus, in this particular example, whether I go with the longer term trend trade or the shorter term one, and since my risk amounts (in dollars) in each trade are the same, my commission has exactly the same % impact on both trades.

This brings me to my next observation: I must be willing to risk a dollar amount where I can reduce the impact of commissions. But to do this safely, I need an account large enough where the heightened potential dollar loss, in order to reduce the significance of commissions, is not a dangerously large % of my overall account balance. For example, if I find that risking $100 per trade would be the level where commissions are drastically reduced relative to overall profit potential, I need to make sure I have a $10,000 account balance if my goal is to keep any given trade at 1% risk of my overall account balance.

Thus, it appears that the beginning account size is important for the above reasons observed.

So, in summary:

-Long term patterns require fewer shares to achieve the same profit as shorter term patterns.
-Fewer shares lead to fewer commissions
-There is a level of low risk tolerance that cancels out the advantage of fewer shares if the
the minimum commission amount per a certain amount of shares has been reached.
-Even with risk tolerance at an amount where commission's negative impact is reduced, the overall account balance must be larger if one wishes to restrict trades to
a certain % risk of their overall account balance: say 1%.

Hopefully, the above was clear enough. Feel free to respond to any content you agree with or have observed differently.

Take care.

You might consider the performance of your overall portfolio over a series of many trades, as well as the action of individual components.

 

 

Lungs

 

Lose Air about Half the Time

 

Clip: www.co.forsyth.nc.us/

EnvAffairs/asbestos/default.htm

 

Sat, 14 Jun 2003

 

A Would-be Creative Dialogue

see: Clarifying Questions


So, let me change the question: which is the relationship between risk management and the TTP in the context of trading?


BTW, I would like to share with you the following (would-be) creative dialogue. CM is me and Fred are my feelings. It has happened this week.

CM - Hmm... I have been too addicted to watching intraday price action, even though I am not a day-trader. Ironically, although I have been looking for precision I end up with the opposite for relativity errors, missing major trends and liquidating profitable positions a little bit too early. Definitely I want to watch charts only after the day close, as I don't want trading to interfere with my regular job... So, let's see. I will have to trade longer term...

Fred: Protective Warning (PW)! O.K., but you might have to risk more per trade.

CM: Right, but if I don't make the transition I will never be able to overcome this issue. Moreover, I might risk more per trade but I will be able to spot better reward/risk ratios to compensate for. This week I will commit myself to watch the chart only after the close...

Fred: PW!!! I see your positive intentions. But now look here, this market is vulnerable and your current position was taken from a short term perspective and the short term trend is down! You'd better bail out at breakeven.

CM: No, I won't. I have to pay a tuition if I want to make some improvement. This Friday I will wait for the weekly close...

Fred: PW!!! You can reposition yourself later. Bail out at breakeven and reposition yourself later when the opportunity comes in the new time horizon.

CM: Nope. If we have a strong close today (Friday), above $xx, then we might have a powerful move next week.

Fred: PW! O.K. But I urge you to put on a stop near breakeven. Take a small loss and let's resolve this issue. The market is vulnerable.

CM: O.K. I will put this stop. (At this point I put the stop at the suggested price)... Hmm... Do you know what? I want to make this change in my trading. I will cancel this stop and wait for the weekly close.

At this point I canceled the order and Fred was ignored. CM and Fred didn't reach a compromise. On Friday, intraday price action reached the breakeven point, met strong resistance and collapsed, giving a weak weekly close... After close:

Fred: There you are with the tuition you wanted...

CM: Yes. But this is a relative small tuition and could spare me thousands in the future...

Fred: No, you're wrong. This way you are paying your tuition with a student loan and in the future you might have to pay it fully with high interest rates...

CM: ???

Running a simulation of Fred and CM in your mind is different from experiencing Fred during TTP.

 

Your pattern of using conversation to avoid feelings seems to extend to conversations with yourself.

 

TTP works as a community project.

 

 

 

 

Talking to Yourself

 

means you never have to be alone.

 

 

Clip: http://www.nrgs.org.au/

self_help/change_thinking.htm

 

Sat, 14 Jun 2003

 

Something Happened Today


... I thought you might like to know that I’m next to certain I’ve had an A-HA! Of course, I’m open to outside interpretation of the experience I’ve recently had, however, I can’t see how it could be otherwise.

These past few weeks I’ve really made an effort to try and feel….well, the way I feel. I’ve been reading over and over the lines at FAQ that seem to strike a cord in myself, mainly those that pertain to the collective “wisdom” of traders old and bold, trying to find answers of course to the great trading question so to speak. I also recently bought and read ‘Emotional Intelligence’ and ‘The Art of Speculation…’ and have reread parts of Market Wizards and The New Market Wizards as well as Reminiscences. I began underlining the passages that made sense from what I thought was the perspective of the TTP. I began to think that I would probably never get to experience what an A-HA was and so never get to know the real me, or rather Fred, and finally listen to what he has been trying to tell me all these years. I perceived my chance of observing the TTP in person at a tribe meeting was not so great and I thought there would be even less chance of starting a tribe where I live. That would mean having to face my fear of public speaking, social anxiety, or the fear of ridicule, embarrassment, and rejection. (Seems loaded I know…but stick with me)

Well, the weeks went by and day by day I mulled over the ‘wisdom’ I had read but yet did not feel. Then a few things happened; none of which had anything to do with trading or trading psychology but nonetheless allowed me to use and benefit from the wisdom of what the TTP tries to teach. My wife’s grandmother became very ill which caused tremendous stress and sadness in her life. For close to two weeks she had to deal with the roller coaster of emotions that happen when someone close is about to die. Let me add here that she pulled out of it and is now OK. However that time was very hard for her. Her grandmother was suffering from Dementia for some months and that added a layer of pain for her and her family. It was a very trying time for my wife.

I thought that I empathized with them. I could put their feelings into words, but I for some reason could not feel what they felt. I was not sad. I was not angry or fearful. I did not feel those things. Likely I haven’t been really feeling these feelings for years, or if you like ‘experiencing them’. I’ve been told that I show very little emotion and that I never talk about what’s on my mind; keep things bottled up. I see this in myself and have been concerned about for this for some time. I ‘knew’ of the benefit of expressing your feelings or conveying them to others however I realize now that knowing and doing are two very different things. I was not experiencing them.

This did not go unnoticed by my wife or her family and in her hour of need I was nowhere near. She was doubly hurt and angry; and rightfully so. For two weeks I was selfish, apathetic, and unsupportive. At the time I did not see it but knew that I was unable to feel their pain and tried to put on a half-assed job of being empathic. It did not work and the result was that my wife was so hurt that she considered separating from me for awhile to deal with her emotions and her unhappiness. When she conveyed this to me, it finally started to sink in, albeit slowly. I had been oblivious to her anguish which complicated an already difficult situation for her.

I became reflective of my life and thought about times past when I felt sad, fearful, and hurt. Regrettably I found it hard to locate any but a few times when I remember really feeling strongly. Special cases came to mind such as when my parents divorced when I was ten, feeling angry at a neglectful father, being upset when I was young and teased or ridiculed by my peers. One feeling or emotion stood out though, and that was anxiety. Anxiety I feel when I fear public speaking, being embarrassed or ridiculed, neglect … whatever. Anxiety was a state that I could relate to; one that I have had a lot of experience with and one that has been played out in so much drama of my adult life. I began to think of what made me anxious, reread parts of the book ‘Emotional Intelligence’ and began to understand in a limited way that the anxiety I felt was learned physiological responses of my subconscious mind. It made zero logical sense to me for so long but affected so much of my life.

The next thing that happened is that I began to open up to my wife and tell her these things that I had ‘discovered’. I tried rather. I still had trouble discussing painful aspects of my childhood for whatever reason. It felt uncomfortable and I guess true to TTP theory those feelings were blocked, misdirected, ignored, whatever, for so many years that simply talking about them to the one person I love more than anything was difficult. Again the irony did not go unnoticed by me, however I saw a window, and started remembering lines and passages that I had read on FAQ that somehow pertained to my situation. Still, it was very hard and maybe a little frustrating but I knew I was on the right track to finding a solution to my emotional dilemma.

This Tuesday past I received a call from my stepsister who told me that my father had been rushed to the hospital for treatment of a severely painful intestinal blockage. Surgery might be necessary however beyond that facts were sketchy. I was well … I don’t’ know how I felt if I felt anything at all. It sounded rather serious but not life threatening. I was able to get a hold of him later that day on the phone and wished him well and he told me about the pain he was experiencing and what not, but I felt he was in good hands, having made it to the regional hospital some 2 ½ hours from where he lives. The next day I went to work and thought of him a little but fully expected to come home to find email or a phone message saying that he was fine. I was quite taken aback to read an email from my sister explaining that the doctors had found cancer in his bowel and the tumor was the source of his intestinal blockage.

 

Right at that moment I knew the situation took on a whole new meaning and the seriousness of the situation increased dramatically. Still, after all this, I felt little more than mild fear for him.

I was ashamed yet passive. I sat down and thought about it. Yes, my father and I had never been close and as a young boy his neglect hurt me many times; but why was there such a wall now between me and my emotions. After all, it is very normal to feel lots of fear and sadness after receiving such news.

 

My wife came home to find me deep in thought or rather determined to feel what I thought should be the emotions I ‘should’ have been feeling. I tried to amplify the feelings in my body. I felt heavy headed, very lethargic, my face was drawn, my stomach was tight, I felt cold … and yet I did not know if what I felt was sadness or what. It scared me. I could not believe I had become an unfeeling entity with little capacity for empathy. It felt grizzly. I couldn’t help thinking of the lines I read in ‘Emotional Intelligence’ about those sorry people who had no empathy, the child molesters, the rapists and psychopaths. Well … with that I think some sadness started seeping through. I began to cry a little and my wife expressed that perhaps I should get time off from work and go be with him as that was what she should do and probably what my father might appreciate. All the while and on the 3 ½ hour drive that followed I kept trying to be conscious of how I felt. I felt sad at times but for varied reasons.

 

I wanted to keep my father foremost in my thoughts however old memories started playing about my mind and for some reason distressing episodes of my life kept popping up and at times I cried a little. Mixed in was a lot of anger. My mind kept creating scenarios where I would be telling people off and threatening them and I knew that somewhere inside I had a lot of anger to release.

Soon after, I arrived at the hospital. I found my father in intensive care and recovering. He was alert and felt well. I learned from my stepmother that the surgeon had been since by and said that the surgery went well and that the tumor was successfully removed with no signs of cancer anywhere else. He also expressed how fortunate my father was in getting to the hospital when he did as his bowel was about to burst from pressure. My father was twice lucky. He had cheated death without a moment to spare and was also a cancer survivor. My stepmother was quite shaken but my father as usual seemed unfazed.

 

He was grateful of course and extremely relieved, especially from the pain, but his emotions struck me as one not suited to someone who had just knocked on deaths door. Then I realized just how alike we were. All my life I’ve been trying to avoid becoming the father I knew; the one with money problems, always in debt, the seemingly unfeeling person, the neglectful parent. What I had feared most about him I had become … or so it seemed at the time, and still does.


I made an effort in the next two days to give him as much support as I could and to try and get him to talk about how he felt about the whole situation. His replies were always short and I knew that his feelings did not reflect the seriousness of the situation, regardless of how conscious he said he was of his good fortune. I began to feel that I wanted to be there for him and to try and comfort him anyway … and I did as best I could. His speedy recovery despite being less than two days since his surgery amazed me. His aloofness with regard to his now having a colostomy on top of his bout with cancer scared me. I couldn’t figure out if he really ‘felt’ relieved or knew logically that he was lucky. I still don’t know.

The point of this long story begins here. The ride home today by myself gave me time to reflect on what had transpired these past few weeks and the recent events with my wife, her grandmother, our marriage and of course my father. I again tried to be conscious of how I felt about all these things, what was going on under my skin, in my head, and mostly in my heart. (At this point things started to get fuzzy) Somehow I began to feel sensations that I had never been aware of before. I felt off. My throat was tight, I was flushed, and I felt keyed up and tired at the same time, I felt cold. These are the sensations I have when I experience anxiety but yet I was not anxious.

 

I began to think of my father and how much I still love him despite the resentment that I had carried for so many years. I thought of my wife and our marriage and how alone she must have felt those two weeks not long ago. I began to cry, and I began to feel sadder than I can ever remember. I cried aloud and my chest heaved. There was pressure in my head and I felt emptiness inside. My thoughts drifted off and I became engulfed in the feelings in my body, the tears, the crying aloud, the pressure in my forehead from exertion, the sadness that I felt. I felt so very sad. I cried uncontrollably and yet it felt so good. I was letting out what seemed like a life’s worth of sadness.

 

I thought of nothing sad…but I was so very, very sad. Then it dawned on me that I was fully experiencing the sadness that for so long I had been hiding. It was wonderful. I was crying aloud and I couldn’t have been more satisfied. The feelings started to subside and eventually disappeared but I was so happy that I began to laugh. I laughed and I cried again … then I laughed some more. I can’t ever remember having tears of joy but that is how I felt. It was exhilarating and draining at the same time. I felt the sadness for so many things. For the loss in my life, the feelings of being neglected after my parents divorced and my mother moved away. I cried as if I were a little boy. And it all made such perfect sense. I felt as a child.

I began to think of other fears in my life and my social anxiety. It brought back so many memories of being young and fearful. Fearful of ridicule from peers, shame for my family, the hurt that was always present but never let out. It all made such sense. The sensations flooding my body were what Fred had been so long trying to tell me to no avail and the anxiety I felt was the consequence. The world opened up and I began to feel it all.

 

I felt lonely for my wife, sad for a troubled childhood, regret for the pride of not giving in to the feelings I still had for my father. I saw things in a different light and I my thoughts eventually drifted back to trading … the very thing that had invaded my thoughts hourly for a few years. It was if someone turned on a light switch and the quotes and wisdom of famous traders took on new meaning. I somehow felt I knew intimately what they were talking about. I empathized, something I have been so poor at for so long.


The ride home for me today seems now almost surreal. My senses seemed flooded with what was coming in from outside, and I felt a surge of creativity in my thinking. My thoughts exploded with hopes and dreams and I yearned to tell my wife all about it. I wished she were there and then I began to understand how critical it is to ones life to be able to experience your feelings. I felt pain today, and sadness, and many emotions that I would have never before wanted to … but it was awesome … everyone should have this experience, this emotional orgasm.

It’s now been some time since this experience and I don’t know if words can accurately describe it anymore. There is so much more I wanted to say but I don’t know now if what I’m saying can do it justice. What I experienced today was like nothing I ever thought possible. Whether or not it was an A-HA to me is irrelevant. It was what it was and my life has now changed and as I practice and learn I know that nothing is impossible.

 

The trading tribe process has shown me the way to a door within myself that had been locked for so many years. Somehow today I was able to open it. There is no doubt in my mind my life has somehow changed for the better.

I can’t wait for my wife to come home so I can tell her I love her and share this wonderful feeling with her.


Sincerely,

Yes.

 

 

Joy

 

Willingness to Feel Grief

and anything else that comes along.

 

Clip: http://www.coconino.edu/drc/

images/Joyous%20figure.jpg

 

Sat, 14 Jun 2003


Trading

Hello Mr. Seykota!

I'm a 28 year old male living in Vienna, Austria. Currently I'm reading "Market Wizards" by Jack Schwager and am very impressed with the wisdom contained in this book.

I'm dealing with the stock market quite intensely since about seven years, and I'm now going to start to do trading on my own account.

 

Actually, I've experimented in the markets since a couple of years, contributed to several stock-market-related web sites, written a stock market letter nobody was reading - and was lacking of the courage to just say "O.K., now I start to trade on my own account"...

However, I've started with 500.- Euros and my goal ist to double them 10 times in about a year - wich would make 500.000.- out of them. We'll see...

Best regards

Your math seems correct. I don't recall reading in Market Wizards or elsewhere about a system that doubles equity ten times in a year.  I wonder about the drawdowns and feelings that go with it.

 

0

500

1

1000

2

2000

3

4000

4

8000

5

16000

6

32000

7

64000

8

128,000

9

256,000

10

512,000

 

Table of Doublings

 

No columns for drawdowns or feelings.

Fri, 13 Jun 2003

 

A Phone Call

Hi Ed,

How are you?

Some issues have come up in our group group that I would like to run by you. I was wondering if you could kindly give me a call?

All of us have done a good job with TTP, so now the deep seated issues come up very rapidly. It seems all of us are wounded birds and are having a tough time coming to terms with how to share our inner most secrets with other strangers.

There is no need to share secrets.  Sounds like you might still be talking story and drama as a way to avoid feelings.

 

You might start out by sharing your own feeling about not wanting to share feelings with strangers.

 

 

Don't Talk to Strangers

 

It might convert them to friends.

 

Clip: http://www.oag.state.ny.us/family/

kids/pre/safety_tips.html

 

Note: If you wish to talk with me in person, you can attend a seminar, likely in October at Lake Tahoe, or email me about private consulting.

Fri, 13 Jun 2003

Short Term Trading

Dear Mr Seykota,

I appreciate having the opportunity to interact with you and am learning a lot from your website.

I have a simple question regarding short term trading. You and others have stated that short term trading can not be as profitable as long term trading since transaction costs eat into profits and magnify losses.

 

It is not because trends do not occur in short time frames as they clearly do. Since markets are fractal in nature, this makes sense.

Therefore, if transaction costs were able to be reduced proportionately such that a reduction in timeframe did not lead to them being a larger part of costs incurred, then short term trading could be just as profitable as long term trading. Is that a correct conclusion to draw?

Thanks

Check your feelings about wanting to justify your positions by using qualifications and excuses.

 

 

 

 

If Pigs Had Wings, They Could Fly

 

 

Clip: www.bringhomethebaconnow.com/

contact.html

Fri, 13 Jun 2003

 

Shaking the Habit #2


Hi Ed,

Thanks for your response regarding my email dated May 29th. I noticed that you did not address my issue of taking counter trend positions. This reoccurring habit of mine is an even bigger problem than letting profits run and once again has gotten me into trouble this week as equity indices have continued to rally.

To try and explore these issues I volunteered my wife as receiver. She read your white paper on TTP and was willing to help me. At first I battled with her big time as I am very bad at describing or showing feelings or emotions (things I consider too 'touchy/feely'.)

 

We made what I deemed to be little progress, however this morning I had a bit of breakthrough on my own.

I believe my issues have to do with my father. He has been trading futures/stocks for years and taught me his system of trend following using moving averages.

 

I know if his system is followed you will be with the trend but I also resent the fact he is too risk-averse and has not made an absolute fortune with his trading.

 

In analyzing some of my larger losing days this year I found a common theme of phone calls either to or from my father.

 

I undoubtedly had a profitable counter trend position and would describe it to him. He would tell me its just a counter trend move and to watch out for the market to turn. The drama I (Fred) then created was to try and prove him wrong by sticking with my 'right' position despite the market reversing on me and triggering my s/l(which I would ignore).

 

The source of the drama's are not limited to my father either. I had many similar days as an F/X dealer proving that my head trader / analyst / co-worker etc was wrong and I was right about my counter trend positions (the steady flow of customer business allowed me to finance my 'bad' positions by pinching money off the customer trades and overall finishing with a positive P + L).

This morning I have had a minor 'aha' , however I realize there is more work to be done. I have many other questions I would love to ask you but will limit this FAQ to a very big THANK YOU for helping me 'shake the habit.'

regards,

--sorry if everything is not SVO-p . I am working on that as well

Check your feelings about being wrong and /or making others wrong.

 

 

 

Scolding

 

Is Just Another Type of Relationship.

 

 

Clip: www.edpsych.com/TeBreak1.html

 

Fri, 13 Jun 2003

Quote


Dear Mr. Seykota,

Can I quote you from one of your replies in the FAQ on a report in which I'll be writing? Thanks.

Best,

You may quote a sentence or two from FAQ, with attribution, for non-commercial purposes.

 

You  may not use or sell FAQ materials without a license. 

Fri, 13 Jun 2003

Clarifying Questions

Ed:

I would like to ask you two clarifying questions with regard to trading and the TTP:


How does technical analysis relate to the TTP?

Traders often talk about being discretionary traders or mechanical ones. Is there such a definite distinction in the zone?


Thanks.

Relations and distinctions are judgments, not object properties.

 

Check for a pattern of of asking meaningless questions to steer conversations away from feelings.

 

 

 

Hey Diddle Diddle

 

Come here often? Say, what's your sign? What's the relationship between the cow and the moon?

 

 

Clip: www.thelooneybin.com/

Blackandwhite/cowovermoon.htm

Thu, 12 Jun 2003

 

How to overcome the guarded feeling

in a Tribe meeting


Hi Ed,

In the Manhattan group we have had three meetings so far and things are progressing well. Everyone is starting to do a good job with the very intuitive TTP.

One thing however that is starting to surface is that most of us are not willing to open up fully, its that feeling of not wanting to share our inner most secrets and painful events in a public setting.

What advise would you have for us? This being summer, some of us thought that holding a tribe meeting in Central Park may help. Rather than staring at each other in an office settings, perhaps we could take some sandwiches, sit on a blanket and share our feelings, in an open conducive setting under an open sky...

There have been couple of incidences where we had to terminate TTP early because the person didn't feel comfortable going any further.

I look forward to your comments.

Check your willingness to encourage clams to clam up even more.

 

Vesicomyid Clam

lives around methane seeps on the bottom of Monterey Bay, where hydrogen sulphide in the sediments would be toxic to most other animals.

Attempts to pry a clam open, can make it clam up even more.

Photo: (c) 1995 MBARI

http://www.mbari.org/data

/images_video/animals2.htm.

Thu, 12 Jun 2003


TTP Application

Good Morning Ed.

I’m writing for inclusion in your TTP program – as I feel I could make significant contributions to the group and, of course, can commit the time and energy necessary.

I hope you enjoy my essay as much as I enjoyed writing it.

Thank you!

p.s. Fred says “Hi!”

 


TTP can be TNT

if your MO is OK,

your IQ is 3D

and you’re not in AA!

The Trading Tribe Process feels to me like a breath of fresh innovation next to an assembly line of “proven and reliable trading systems – yours for only $2,995 plus tax!”


After all, what is the market but the kinetic expression of mass psychology?


The Trading Tribe Process is the first process I’ve discovered that gets to the true root of not just successful trading, but successful living.

 

Only through better understanding of our own incredibly complex and breathtaking psychological power can we truly begin to direct this power toward more productive endeavors. I, for one, have spent a great deal of time and study dedicated to development of my mind and making ever more attempts at harnessing its power for the good of myself and others – specifically my new wife and family.

 

But I can’t do it alone, so this is where the Trading Tribe Process enters the picture. Funny how the axiom of “when the student is ready, the teacher appears” can often be more true than trite.


It was about four years ago that I read a very important book entitled “The Disciplined Trader” by Mark Douglas and immediately started to realize the starring role psychology plays in any trading theater.

 

With an accelerating appreciation for supporting cast members we can call self-discipline and objectivity, my trading future suddenly shifted from a series of opening weekends to a steady monthly series where the star and supporting cast showed up on time, did their jobs well and served far more people in the long run.


It is the idea of service that most attracts me to the Trading Tribe Process. At the moment, I am not precisely certain how my life’s goal of serving more and more people will come to fruition, but I have unparalleled faith that the answer will present itself when the time is right.

 

In the mean time, I can be of service to others by becoming a successful trader – thereby providing a living for the many individuals who earn their keep as brokers, floor traders, runners and the like. Every time I make a successful trade, I am able to serve those people again by placing more and better trades and so on. For this, my individual service may be limited, but my capital serves others every minute it is working in the markets. Perhaps I am already on the road to serving a great deal of people through becoming a successful trader with large amounts of capital available for companies to build, grow and finance expansion. But I cannot do it alone – nor should I attempt to.

The more I learn, the more I realize there is to learn. This statement is perhaps one of the most powerful orts of wisdom ever uttered and I thank my lucky stars to have been blessed with the intelligence to understand it and the humility to accept it.

 

This doesn’t mean I’m devoid of knowledge, nor exempt from making efforts to support others who might need assistance – as I heartily accept support from those willing to do so. In fact, I believe it means that I have a DUTY to be as supportive as possible to others and it is my PRIVILEGE to do so!

 

As a regular volunteer at [xxx], I have come to realize what true service is. Not necessarily the donation of material possessions – although that can be vital at times – but the giving of one’s own spirit through caring and support of another and their goals of becoming the very best person they can be.

 

In the case of a blind child who MUST trust me with their life at times – and does so willingly with an unencumbered pure faith – the privileges and rewards of serving others are only becoming more precious as I grow.

Full participation, including consistent attendance, is essential. See Tribe Directory.

 

Thu, 12 Jun 2003

 

Report of Meeting

Dear Ed,

We had our first meeting yesterday. It felt odd at first to air my trading experiences to a complete stranger, yet as we went on talking and expressing our feelings there were moments where "it" felt right and I felt I was being helped in some way. We agreed to meet again and I'm already looking forward to it.

OK.

Wed, 11 Jun 2003

 

Autism and Dancing


I was interested in the letter describing the market as a "she". I've read that female brains have nor connections between left and right hemispheres.

In autism, the connectors are possibly underdeveloped. Physical movements help develop the connectors. In autism, sensory perception must be kept simple to avoid overwhelm which precipitates a shutdown / meltdown emotionally and intellectually.

When a receiver is effective, that person keeps the sender focused on the feeling that Fred is communicating. How difficult but simple the process is to keep focused on the feeling. Glad you are developing training for the technique.

Aside from all that. Evolution works its process quickly in some situations. Ex. changes in the shape of bird bills in response to seed sources. It is not limited to the  eons. As the tempo of dance increases and slows to interest and delight of the dancers and the viewers, so does the process of evolution. Something other than ourselves is calling the tune. Dance on!

OK.

 

 

 

 

Fred Likes to Dance

 

on a floor, on Astaire,

rarely on Ginger's foot.

 

 

Clip: http://members.tripod.com/

~npaulette/fred.htm

Wed, 11 Jun 2003

 

Feeling Instead of Snapping


Dear Mr. Seykota,

I wanted to relate a mini aha! that I experience this evening.

I received a phone call from a friend that is going through difficult times. Lately, I have been feeling increasingly frustrated with the person for no apparent reason. The conversation began as before. I sighed inside and prepare myself to be battered like a ship in a storm. Before I snapped I decided to talk through my feelings.

What an amazing world opened! I started out with my feelings of helplessness. I realized these feelings led me to be angry that I could not help my dear friend. I realized that I was transferring my anger into my displeasure with my friend. As I talked all of this through, my face and head warmed up and felt somewhat dizzy. When that feeling passed I felt much more at peace.

This is such a small start, but thank you for my mini aha!

Regards,

OK.

Wed, 11 Jun 2003

Progress on Re-Buy


Dear Ed,

I think my writing to you and your sometimes brutal and brutally funny responses are helping (Sometimes corny responses too! Don't get too big of a head Mr. Bigtime trader!). It is good to correspond with someone who "Tells it like it is." I admit sometimes I need a kick in the pants since my parents are not around anymore. There is no actual place that I know of, for traders to learn from another successful trader in a "continual forum like atmosphere" except here.

If I was a mechanic I could talk to expert mechanics, if I were in medical school I could talk to successful doctors. This is the first time I have had the opportunity to correspond repeatedly with a successful trader! What a gift!

I made it through the 5th or 6th round of layoffs in my company but continue to be driven to become an independent trader or possibly fund manager trainee/assistant for a firm. Since I don't have my masters degree, the latter does not seem immediately possible (No responses to resumes sent for the past few years). I guess I just don't look good on paper?

Regarding my last e-mail about "Risk" on Monday June 2, 2003. I understand what you wrote. I ended up selling most of my positions the next few days nearly broke even. Some of the stocks started to reverse on me and the market did not look good all of a sudden. In other words, I did a lot of trading for nothing!

Regarding my e-mail to you titled "Re-Buy" on Saturday May 10, 2003 I think I am clearing up on that subject also. I recently re-bought [xxx] & [yyy]. Yes, I bought too much of both but I feel clear since I was able to express my problem about re-buying with you. I am not fearless but am willing to take some big risks with my own money.

 

I know I can get killed and will reduce risk if my account grows closer to the $500,000 mark. Currently still at $140,000. Lets see if I am clear now on "Re-Buy".

I must remember your Friday May 9 response to that tribe member where you say "You might even try these." I say again, the four things you listed = "Priceless".

OK.

Wed, 11 Jun 2003

 

Help with System

see Designing a System


Dear Ed,

I got your reply in the TT forum regarding my initial question dated June 9 (below). First, thank you for being so clear and direct.

 

I am amazed (shocked?) that systems you or Rich Dennis/other greats might have used do not differ much from the trend systems available to me.

 

It DOES make sense that the operator of the system is the biggest "X" factor, however. This gives me hope that I have a chance, once I work thru the TTP process and improve the connection between Fred and CM, to be a very successful trader.

Oh, and you are probably right about needing to explore feelings of doing things on my own. That comment seemed to strike a chord somewhere within. I am anxious to attend my first meeting and help others as well as myself. I realize I have the tools ... I just need to get CM to hear what Fred is saying.

Thank you, Ed, for your time and commitment to others. This might be an off-the-wall suggestion, but have you ever considered listing some of your favorite charities in the event those that you've helped want to give back in some way?

 

I know you won't accept payment, but maybe you have an organization we could return a little "karma" to? Just a thought.

God bless and keep up the great service!

Yes, you can make a contribution as a member of one of my favorite dis-organizations ... namely, the free enterprise system.

 

To join up, go find something you like to do and do it really well ... you can directly increase quality of life on the planet receive rewards in the process.

Wed, 11 Jun 2003

Lizard on a Rock

Dear Ed,

I recently shared your "Lizard on a rock" story with a friend. The story offers a great metaphor for trend following and I tend to think about it every day. Could you please share it with the FAQ members because I feel it would greatly benefit the group.

thanks,

Our group had an excellent session ... I really feel the power of the TTP.

Well, it goes something like this ...

 

The lizard ... just hangs around on the rock ... and waits and waits and waits ... for his pattern to show up ... and when a bug comes along, he makes his move, right from the gut, without thinking about it. 

 

Moral: When trader becomes that automatic, then he, too, can hang around on a rock and catch a lot of bugs.

 

 

Stalking the Trade

 

Clip: www.humboldt.net/

~tracker/lizard.html

Tue, 10 Jun 2003400

Miami First Meeting - June 18


Dear Ed,

The Miami Intentional Community is holding its first meeting on Wednesday, June 18th, 2003. The four participants met casually last Wednesday to check in.

We got a taste of the Process and feel very comfortable with experiencing feelings right off the bat. We occasionally wandered off with analysis about feelings but we are aware of it during the occurrence. Experience to experience more experience.

The participants will hold meetings every 1st and 3rd Wednesday of the month and joyously welcome interested individuals in the area.

Thank you for providing individuals a place that spawns curiosity and experience community.

OK.

 

Let me know a time and phone number so I can call in to wish you well during your first meeting.

Tue, 10 Jun 2003


TTP Update

Hello Ed,


At our last meeting, I offered to go on the hot seat. Here is a brief record of my experience in feelings:

I feel frustrated when I am unable to help someone I care about.

I feel responsible for making my mother happy.

I feel guilty when she is suffering and I choose to let her find her own way rather than answer her calls for help.

I feel a strong physical exhalation and I begin to cry. My conscious mind spurts out: “She’s rebelling.”

I return my focus to the feelings. I feel disgust, anger and a sense of wonder. I feel Goosebumps and my hair standing on end.

Guilt and frustration are hard to feel now. I feel lighter.

The above feelings represent a summary of about 45 minutes on the hot seat.

 

I am very grateful to the tribe for their efforts in reflecting my feelings. They provide a very supportive environment as I can literally see, hear and feel their reflections in their faces, words and physical actions.

 

Clearly, the process is designed for groups. For the last week, I have been unable to replicate the feelings I was feeling before the meeting. Guilt and frustration almost seem silly. I know that Fred has more to teach and I look forward to my next hot seat.

Thanks,

OK.

Tue, 10 Jun 2003

 

LA Job Opportunities


Ed,

Thought I'd touch base and see if you can offer any advice.

I've spent the last year trading everyday and continuing my education. After a year of day trading stocks, 2 months ago I switched to trading the futures (much cleaner, not so many games).

 

I also have begun option
trading the S&P under tutelage of a friend of mine that runs a hedge fund
.


But my family is getting tired of my "quest", and I would really like to get away from having to learn everything the hard way.

Is there any "trading" companies in the Los Angeles area that you know of that I could contact for a position?

Thanks,

I do not have a list of companies that can provide you with:

 

someone to get tired of your quest

distaste for hard work

 

As those seem to be elements of your current drama, you may already have the ideal position.

 

If you allow Fred to communicate with CM, you might dissolve your dramas and go for right livelihood, perhaps even trading in LA.

 

 

 

Position Wanted

 

Clip: www.cutebabyanimals.com/

Relax.html

Mon, 9 Jun 2003

 

Translation into Chinese

 
May I make a Chinese website and translate some of your site content in Chinese?

You may not copy FAQ to another site. 

 

If you can come up with a translation of the TTP page into Chinese, I would like to post it to this site. 

 

I suggest you practice with TTP for a while before attempting to write about it.

Mon, 9 Jun 2003

 

Designing a System


Hello Ed,

I've been a fan of your TTP site for awhile now, mostly staying in the background observing and catching on. I am a relatively novice trader, using a 'robot' system right now to carry out demo trades but not too comfortable because I don't know what has gone into the systems the robot uses.

As I mature with the TTP and plan to attend a live session regularly in the near future, I had a business question for you:

I need a system. May I retain your professional services, or are you retired from that particular challenge?

I am looking for:

a system to follow and take advantage of trends in the spot forex market (I don't trade other markets)


This system would have to cover all aspects of the trade, from signal, decision, entry, exit, risk etc.

 

It would need to be either written in TradeStation 2000i language, or be able to be translated into that language.


Can you help me, sir? I realize the importance of knowing oneself and the relationship between Fred and CM, and now I'd like to work on getting a system designed that I can trust and follow without question. I know you have achieved some noted success, and was hoping you might be available for a pipsqueak like me.

Thank you for any consideration. I await the "yes" or "no thanks" and any details such as meetings, fees etc.

There are very few differences between trend following systems, other than the time constant (how frequently it trades). There are huge differences between the abilities of traders to follow simple systems.

 

You might look at your feelings about doing things on your own.

 

 

 

At Some Point,

the Son becomes the Father

 

Clip: www.burgessphotography.com/

p551.html

 

Mon, 9 Jun 2003

 

Astonishing Results


Dear Ed,

I like you to know that You and the TTP process has made a dramatic difference in my trading, I have had some astonishing results.

 

I have been trading for a long time, much longer than I care to admit, however I have never been able to trade in a consistent successful manner.

The TTP does take some getting used to and much practice. But by keeping at it, I have finally had my aha's. I have finally started to communicate with my best friend Fred, who has been looking after my best interest all these years.

Tears roll down my cheeks as I write this, I have had a very difficult life, the difficulties didn't just happen once or twice but lasted the first 27 years of my life, being ridiculed in school and being called a moron because of a severe speech impediment. All those earlier memories stayed with me, even as I have children now. Although I had much success in other professions but never in trading.

Despite a frantic effort on my part in learning NLP and half a dozen other techniques, having had 50+ sessions with a whole litany of therapists. All in vain to erase my past.

All I had to do was to ACKNOWLEDGE my feelings from my past, fully experience them. Fully experience my feelings of sadness, the feelings of the constant terror that some people with stuttering live with.

Its amazing how effortless my trading is now, I do things in my best interest. Whatever God given talents I have, they are now finally finding a voice, without any drama from Fred. God bless you Ed for sharing TTP with us.

Yes.

Mon, 9 Jun 2003

 

Hong Kong Tribe


Dear Ed:


Thanks for this great site.

This site is excellent. I want to join the tribe. My name is Kelvin Hui, I'm a private trader starting my own operations from my home country, Hong Kong.

The first time (around 1 year ago) I knew you was from the book of "Market Wizards". After reading this book, I typed you name in Google and searched all info about you. I think you are a special one, and you are a real life example to me.

At night before going to bed, I close my eye and switch off the light, and hear someone talk to me. This guy is from my mind. Possibly it's FRED.

I feel what's going on inside me not trying to
suppress it. I feel comfortable. At least, I feel I am honest to myself.

I know I can learn more, and share my feeling. You group is a good start.

Cheers,

 

Welcome

Hong Kong !

 

See: Tribe Directory Page

 

 

Hong Kong

 

Clip: http://www.lord.ca/offices/

asiapacific/asiapacific.html

Mon, 9 Jun 2003


Profitability Cycles


Dear Ed,

I have developed a trading system that back tests pretty well against NASDAQ for the last 5 years.

 

I don't want to go into any more detail other than that it is trading on the day-to-day volatility of the NASDAQ 100.

 

The only thing that puzzles me is that it regularly tends to have pretty steep drawdowns, that do not exactly correlate with the drawdowns in the index itself.

 

In your Market Wizards interview you said that the "profitability of trading systems seems to move in cycles". I can guarantee you that the system and the index do not influence each other because the idea on which the system is based is rather exotic. Do you have any other explanation for this phenomenon?

Also I have no clue how to incorporate some kind of money management into the system to flatten out the drawdowns, because if I cut back during drawdowns, they tend to last that much longer and the whole performance of the system degrades rapidly.

Thanks for your time - I really appreciate your effort.

You might have some feelings about losing - and/or being in control - that you could take into TTP.

 

 

 

Control Room

 

Ignoring information can lead to drama.

 

Clip: http://www.bnl.gov/bnlweb/

history/BGRR/4-267-1.htm