July 1, 2011

Feelings of Good-By

Hi Ed,

After the end of the tribe session I became aware that you would be in Chicago or a meeting. I realized that I would be in Chicago around the same time so I attempted to arrange a meeting. I have been thinking about this and realized that I didn't fully experience the sadness that comes along with good byes because I find it painful and easier to avoid.

Because I didn't fully experience/celebrate this feeling I was motivated by unresolved feelings to see you again. I also realized that you took steps to fully celebrate your feelings of the group ending. Its seems clear to me that you are not motivated by unresolved feelings but instead the objective practicalities of who you enjoy spending time with and who you don't.

I have learned many lessons, but I think I learned more from your actions then from your words.

Thanks,

July 1, 2011

Letting People Go

Ed,

I hope you are well. I think about the tribe often and check for updates. It was such a powerful experience. I notice my disappointment of not seeing any updates and wonder about how busy you are staying. Take care and hopefully soon I will be able to read the FAQ and your new book.

It was an incredibly busy June for me.  But I wanted to write you about the situation of the employee I had that you worked with me on. At the busiest time of the year I had enough of the problems and told him, "I was feeling very upset with what he was doing". I certainly didn't say it in a loving way either. He made excuses. I stated I was tired of the excuse and this wasn't working. He became angry and quit. My workload increased in an already busy time.

Each day I am without him I find more issues with his work because I am doing the same work I had him doing.  And it certainly wasn't quality and I am having to now re-do much of his work. I am learning ever so slowly that I should have listened to you and my instincts and stopped trying to help people.

There is much more to the story.  However, I now have people with hard working reputations wanting to come work here.

Thank you my friend.

July 4, 2011

TSP

Dear Ed,

I appreciate the time you are investing in helping traders understand trend following. As many other traders, I study your work and articles as much as possible.

It has been some time since the last update of the "Trading Systems Project"

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

And I was wondering if you plan to add to the project in the near future.

Happy Independence Day!

Kind regards,

July 5, 2011

Missing FAQ

Dear Ed,

I hope you are in good health and all is well on your side. 

You don't update FAQ for many weeks now and fears about your well being start to creep into my mind.

I hope to hear from you soon!

My best wishes to you and family.

Warm regards,

July 6, 2011

Boxing and Trading

Greetings!

What a privilege - a forum with one of the boldest trend followers to have never lost his fortune, who even offers replies as his time permits.

It has finally occurred to me that creative money management is the key to big returns. I was watching some professional boxing matches and got this idea:

- Boxers who always cover their face don't necessarily avoid getting hit, however the opening rounds always have the opponents heavily guarded against each other.

- Once an opponent lands a hit or two, he opens up his guard during the times he landed in the past, relative to his opponents characteristics.

- Some boxers have a very loose posture but are extremely accurate at covering up when the opponent swings, and picking shots that tend to land.

- All boxers take hits. Winners don't tend to focus on them as much as on landing winning hits against their opponent.

In trend following, this reminds me of how a channel breakout is nowhere near as good a setup as the first higher low after it. This explains the hysteresis that would be present in a volatility vs. price velocity plot - as the trend is bending, the odds aren't as good as after it straightens out in the new direction.

I've noticed most trends have at least one pullback. This coincides with that special zone where an experienced fighter senses fatigue in his opponent, and takes a big swing.

Since trend following is all about DECISION, and deciding in advance how one will REACT to the market, whatever it does, creative money management appears to be very similar to how a boxer plans his strategy for taking out the other guy, or defending himself when he is taking hits. Once the opponent is on the ropes or has taken a good shot to the head, he is much less likely to hit back with the same degree of accuracy as in the opening rounds, and it is much safer for his opponent to wind up for the big shot.

So it seems to go with mass psychology - when sentiment has reached an extreme, then springs back as a new trend forms, the first pullback and failed test represents that golden opportunity for a pro to unload and book the win as his opponent (the market) is retreating...

I present this metaphorical anecdote to other trend followers who are feeling beat up by the recent choppy market. (speed is relative) :D

July 7, 2011

Supporting by Listening

Hi Ed,

I stay on the path.

I'm trying to write in SVO-p ... but its still not entirely natural yet. I'm sorry if its not clear.

I deal with an issue for a while. The answer is clear in my gut but, yet, I experience some fear. I experience fear for different reasons related to both options (to move forward on the issue) that are present. On earlier such occasions, I go to my father for guidance.

I remember "always" leaving feeling worse off after the conversation, than before starting the conversation. I become conscious of my emotions of fear, irritation and anger, when I see certain facial mannerisms of his - ones that I recognize or interpret as disapproval. I wonder if I should just always do the opposite of what he suggests. I feel that, usually, I'm happier with the opposite of his suggestion.

Over the last few days, I often catch myself wondering how much nicer I would feel were I to have his support .. just moral/emotional support. I wonder if I'm just looking for approval from a "higher authority".

Today, I wonder if I "should" go and talk to him. I experience cautious fear at the thought. I consider it for a little while and then decide to talk to him anyway. I share with him my feelings of fear related to both options.

He is surprisingly receptive. More receptive than I remember on any recent occasion. He also ends up telling me how he feels on certain aspects. Its all natural in conversation. He tells me his perspective. He tells me how his perspective may be colored by his own experience and may not be the best thing for me. He tells me to do whatever is going to make me happy ... and to go with my gut.

I get further in this conversation with him than I have in any other in recent memory. I'm actually glad I talked to him. I feel much better about the decision I'm dealing with.

I express my feelings to my mother often. Particularly the physical sensations. Usually that is met with some traditional remedy. If I say, "I feel this burning sensation in my chest", I usually hear something like, "Have a glass of cold milk". I allow her to say whatever she feels comfortable saying.

I feel completely natural about expressing feelings to my friends. I feel it is a part of who I am with them. I feel great about that.

I also attended another tribe meeting last week. I feel hopeful that we, as receivers, can facilitate some benefit for the sender. The sender seems to have a powerful experience and his facial expression at the end of that is decidedly blissful. I feel happy that I can be a part of something that can concretely benefit other people. I continue to be of such service to whoever I can be of service to. I like being a receiver just in normal life. Much simpler. I feel its more beneficial to the other person. I feel inspired by what you're doing.

Thanks for everything!

July 7, 2011

Contribution

Dear Ed,

I see, on your Home page, the current definition of FAQ: is a classroom forum in which readers can ask questions, become examples and support each other. 

http://www.seykota.com/tt/default.html 

I wonder how you feel about "contribute" rather than "ask questions".  I recall this being your intention.

Truly,

July 7, 2011

Jumping The System

Hi Ed,

I have been trading around 3 years and been slowly coming to terms with my own trading ability and performance. Upon reviewing my trading journal over 30 trades on average, I realized a large part of my trading mistakes (cost me 18R over 3 weeks) comes from:

1) Taking signals not dictated by the system, but trades which I had bias direction based on my own interpretation which turns out to be a loss.

2) Premature exiting of the positions leaving too much profit.

I am a hard-working and efficient worker by nature and a Java programmer by profession. I solve many problems and challenges in work and in life through trial and error and perseverance. I see trading successfully as a challenging problem and goal which I am able to resolve given time working on myself as the main issue. I work systematically on myself over these years by trading small accounts to overcome slowly the psychology of following my system and refining my system along the way.

I suspect my hard-working ethic is causing me problems to want to do more even if my system does not dictate me doing anything.  And my overconfidence in solving daily issues leads me to override my system in terms of taking not-signaled trades and taking premature exits when I "sit down" to watch the markets too closely.

It is almost a pattern that I notice whenever I find time to "sit down" at the computer after washing the dishes, helping out the chores and reading stories to my kids, that I will suffer a string of unexpected series of trades and mistakes that I will make to override my system, than if I will just go to bed after all these activities.

You mentioned before that traders get what they want in trading and I get to be hardworking in this case, but it is certainly not in my favor for this case.

But I am at loss to what to do because I cannot seems to "ignore" the open trades that I have and want to "manage" them. I tried to accept that feeling and prepare myself mentally that I will "see" and not "manage" my trades before I switched on my laptop, but apparently it is not working as well as I thought from my trading journals.

What problems do you see in my approach in dealing with my problems and what suggestion can I take to resolve this conflict to align myself with my system?

Thank you very much for your insight.

Regards,

July 8, 2011

Allowing Others to Speak

Hi Ed!

We had a tribe a couple of days ago and I asked the members for some feedback of how we work. I mentioned that many tribes seem to work more intensely with the hot seat than we do. We are more focused on acknowledging the hot seat and come with feedback later. They all responded positively on the way we work so we will continue that way.

One feedback we got was that it is not often you have the possibility to speak without interruption and with people really listening to you. I totally agree and I think that is one of many benefits with the tribe. We would also like to expand the roll play interaction. It is only used occasionally. I look forward to when you will visit our tribe in Stockholm (in the world tour) and give us feedback and additional resources. I quote you at least three times every time we have a tribe. It will be nice to get it from you in person!

My trading is really quite unimpressive. I put in a lot of analysis work and the benefit is that I have a way of trading that makes me very comfortable, but I am missing the break-through. I wonder if I should begin to look for another job since I am unable to apply my technical trading in the way I prefer. Maybe I am only blaming that for my shortcomings.

A trend follower could actually trade his system, even if he had restrictions of how long the holdings must be held, since the profits will be held for a long time and the losers can be eliminated since you are allowed to take losses in a shorter time.

The problem is I don´t have a system that is good enough for me to follow. I also think the firm's rules that I need to check every trade with compliance and the firm's trading department very tiresome. I feel I need someone to work with. I got an "aha" when I wrote that. Maybe I should try to involve my colleague who is good at programming.

I wonder how you are progressing with your new book? I read somewhere you planned it to be finished during 2010. Maybe it has been delayed. I want to buy it when it is finished.

Have a nice weekend!

Regards,

July 10, 2011

Procrastination

Ed,

I hope you're well.

Procrastination: listen to what it is telling you—your brain doesn't buy your plan.

http://calnewport.com/blog/2011/07/10/the-procrastinating-caveman-what-human-evolution-teaches-us-about-why-we-put-off-work-and-how-to-stop/