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Govopoly in the News

FCC to Regulate Internet
Feds Raid NFL
Elections Meaningless

Contributors Say Ed Says
Nov 20, 2014

Uncanny Canines -- Half-time Show


You might enjoy this demonstration of pass receiving.

Thank you for sending me the link.
Nov 20, 2014



I often get upset about "when" to place an order. I remember great trader Don Worden suggesting perhaps randomizing these decisions so I roll a die. Most of my systems are weekly so the first roll is the day of the week to trade.The second roll is hour of the trading day with 8:30-9 included in the first, 9-10, hour (I'm on US Central ​Time). I roll 3 then 5 and place my trade on Weds. after 1 PM. Doing this relieves me of "when" stress. I'm insync with my models and it feels good.

I discuss responsibilities with my boss. Then I tell a person affected by this about my discussion. They "vent" their frustrations to me. I establish rapport, receive their venting, then we agree to work together to get things done. I'm confident that before TTP I would have bungled this conversation and we would have argued.

Thank you for sharing your process.

I wonder if you can place your orders in the same manner as you do it in your back tests.

If you have no back tests, you might consider taking your feelings about <informing your clients exactly what you mean by the word "system"> to Tribe,
Nov 19, 2014

Breathwork Event

Ed --

I will likely attend [Global Holotropic Breathwork Day, April 17-18, 2015].

Thank you for sharing your process.
Nov 19, 2014



I have a fear of vulnerability.

I feel this keeps me from committing totally to my marriage, friends, work.

I hold onto old hurts as a reminder not to let my guard down. I like this it keeps from getting hurt but it hinders my ability to live a full life.

Today a coworker tells me how his wife leaves him after getting married in February and dating for 10 years.

My stomach turns and I feel a little sick. This fear of vulnerability I realize last night amps up even more after I hear his story. Thank you for listening.
Thank you for sharing your process.
Nov 19, 2014

Tribe Meeting Report


Prior to the meeting, I e-mail Ed's workshop template for defining issues to tribe members, which I find helpful. Link:

Four members attend tonight's meeting. Two prospective members depart before the meeting begins: one on the way to the meeting, and the other silently gets up from his seat and doesn't return. This brings up feelings of worry about marketing my business, and feelings about people not liking me and wanting to run away from me.

Interestingly, before the meeting, I wake up with the realization that I continue a pattern that starts in my childhood - I try to control friends by forcing them to play with me. I recall a vivid memory as a 7 year-old chasing furiously after several friends while crying, and the faster I chase, the faster they run away, and the more upset I become. I notice my parents engage a similar pattern - they prefer to force others to do activities with them, rather than sharing feelings to discover something fun to do together. My response patterns to my feelings surrounding <I want people to play with me> seem to be (A) use force to get my way, or (B) isolate myself.

Member 1 checks in. He notes an array of major life drama and wonders if a joke he makes about "keeping his pants on" provokes a prospective member to leave. Member 2 checks in saying he has so many issues he doesn't know where to start and is happy to be in Tribe and willing to work. Member 3 checks in describing issues he has with living with his parents and feels most eager to begin his process. I check in describing how I know I make progress after Tribe meetings, and at the same time I don't feel like being in this meeting. All four of us seem hot and willing to work.

Member 3 volunteers first for the hot seat. He shares issues concerning relationships with women, living with his parents, and debt. Debt ties into living with his parents and elicits a strong state. Member 3 describes an oval in his midsection and jumps into the feeling. As his process begins, member 3 shares recollections of his parents getting into a mountain of debt, and how he doesn't want to repeat their mistakes.

This evolves into a rocking form while he rubs his legs. The Tribe cheers him on with encouragement. After several minutes of intensifying forms, I ask member 3 to freeze and if he can recall any instances of feeling this way as a child, and no key incidents come up. I get member 3's permission to continue enjoying the oval in his midsection: this becomes a metaphor for debt and the tribe shouts "make it bigger" while member 3 goes back into his forms, this time more intensely. At what seems like another climax I ask member 3 again to freeze and try to recall any memories of feeling this way as a young child - he mentions feeling cramps he gets playing baseball as a boy - there does not seem to be a critical incident that associates with these forms. Member 3 integrates his forms and arrives at a very calm zero point.

Member 1 works next. After a few minutes of describing many issues including experiencing his worst-ever drawdown, deaths of close relatives, family problems with drug abuse and suicide attempts, he quickly gets into a form of squinting his face and leaning over. Tribe encourages him along into these feelings and he ramps up the forms quite naturally. Despite his willingness to ramp up several forms, as process manager (PM) I sense the Member 1 may not be quite deep enough into his feelings to proceed to a Rocks Process. Member 1 displays similar forms at the last meeting which morphs into a rocks process, which the member feels might not be effective due to an interruption during the process. He arrives at a very blissful zero point. I wish we arrive at a bigger issue and at the same time, I accept his unwillingness to go deeper.

I say "I guess it's my turn" and get into my forms after a short narrative about not having enough clients. The PM guiding this process is a member who joins the Tribe last year and this his first opportunity to manage a process in our Tribe. I recall having trouble swallowing, coughing and hacking, rocking, rubbing my hands and the Tribe cheering me on to ramp up my physical forms. I arrive at the zero point feeling mostly exhaustion and the realization that I haven't been able to swallow the fact I'm running my own business. I hazily recall being in my Doctor's office as a very young child and feeling a violent reaction to medicine he administers.

I feel hesitation from member 2 to get on the hot seat for the first time. After confirming willingness, member 2 engages in a hot seat by describing many things he has to be angry about. He gets into forms, especially a wild swinging of his arms. I recall feeling fear at this point, and continuing anyway to encourage the member to pump up his feelings. Upon completing member 2 reports a blissful state.

Member 2's anger hot seat dominoes into member 3's return to the hotseat, this time about anger. He ramps up the feeling and I notice he seems to very much enjoy the feeling of anger. At checkout he recalls an issue with his parents hitting him and a sister with a spoon. This appears to be his most expressive and insightful process and interestingly, anger is not on his list of issues he prepares prior to the meeting. Noticing the end time for our meeting is approaching, I feel disappointment we can't explore this issue deeper, perhaps with a rocks process.

I recall leaving the Tribe meeting feeling the same as going into the meeting, and wondering what I accomplish. As I write this one week later, I feel pleasant surprise at my high energy levels and my ability to get things done, especially marketing my business. Prior to the meeting I waste many hours in inertia worrying about outcomes - today, oddly, I feel drawn to my work and a fresh excitement and enthusiasm for it, without much concern for what may happen. Most revealing, I attend meetings with new prospects since Tribe, and schedule several more meetings.

I wonder what insights my fellow tribe members experience.

Thank you for reading, and your support.

Thank you for sharing your process and insights and for documenting your meeting.
Nov 18, 2014



Is it possible to compress water?

Thank you for raising this issue.

Yes, you can compress water at rate of about .00464 percent per atmosphere. Thus, in the ocean, at a depth of 4000 meters water compresses about 1.8%. For most practical purposes, you can count water as incompressible.

Nov 18, 2014

Back Test For Day Trading

Hi Ed,

When you have a minute, and so I don't get too far setting this up if it is done incorrectly, could you let me know if the attached will work for testing?

On the sheet titled 'monday 11/17/2014'

I started with today 11/17/2014 with entering ABCD pattern using color coding, thought it might make it clearer;

Yellow = A
Green = B
Red = C
Blue = D

In the column to right I also labeled ABCD corresponding.

The sheet titled 'November 2014' contains the price, time, entry and exits of the pattern based on specific rules and I also added commisions and amount of win or loss in $ and in 'Points' for win and loss .

I have removed as much "discretion" in rules as possible to start. I hope that will help. I can send rules if you like.

I also put a chart of the trade to far right. I will try and figure out how to get that as link, for now I have it where you can click on it and open it wider.

Thank you so much.

Take care,

ABCD Pattern

Thank you for sharing your analytics.

You might consider further developing your simulation / back-testing model by producing the following information for the graph to the left:

1. Tell exactly how and when you derive points A, B, C and D.

2. List any orders you place - and exactly how and when you come up with them.

3. List any fills you realize from the orders.

4. Post all this data on the chart, as of the moment you first have each piece of data.

Nov 17, 2014

Rube Goldberg

Hi Ed,

I would like to receive any insight you may be willing to share about the following discovery I've made in light of what you have observed of my process and results.

Today I am re-acquainted with a memory of "what I want" and see that I get what I want...


A few years back I thought it would be great fun to make a conceptual "machine" where money gets loaded in, is processed by some kind of colorful and fanciful alchemy and produces 100x money as the product.

In my mind, this idea exists as a vision of an illustration. The details are fuzzy in my mind, there is a funny spinning, cage like contraption involving a crank, rabbits inside that eat the money, and a spawn of rabbit cash... The style is reminiscent of a Dr. Seuss drawing.


As I work on reverse engineering my best risk adjusted trading results this memory pops into my head as I write to a friend about my work and ask for his feedback.

The term Rube Goldberg comes to mind so I decide to look it up.

Rube Gold·berg

: doing something simple in a very complicated way that is not necessary

" accomplishing by complex means what seemingly could be done simply <a kind of Rube Goldberg contraption … with five hundred moving parts — L. T. Grant>; also : characterized by such complex means."

Now I discover a feeling <tickle in my chest> and <want to laugh> that I have at times created a Rube Goldberg machine out of my life.

Lots of moving parts. Some kind of alchemy mixing luck, process and risk tolerance.

It is occasionally comical. It is at time precarious. Sometimes the joke is on me. Things work out.

I am surprised that I like having this new and unexpected perspective.

I write to FAQ, my willingness to follow the system of feeling feelings includes reporting the trades, plotting the curve so to speak. I also enjoy the feedback I receive.

I can select other ways of expending energy and consider ways of achieving the results I want with fewer moving parts.

I discover that I really love trading.
I am good at it.
I don't need to make excuses or devise a contraption to justify the good results.

I wonder if I use <too complicated> <can't figure it out> <comically complicated> as a medicinal behavior to avoid feeling <please don't replace me> with an automated system I can create.

I will take this and the other <feelings> that come up recently to Tribe as a potential point of entry for TTP.

A side note: I notice it is much easier to take small losses and ride the winners since the Workshop. Sometimes I notice that I sing the Whipsaw Song while the market does it's thing.

;) ​

Thank you.

Thank you for sharing your process.
Nov 17, 2014

System Design: Statistics

Hello Ed,

I was very impressed by your interview in Jack Schwager's "Market Wizards". This interview turned upside down my view on mechanical trading systems and encouraged me to learn programming to create my own.

Since then, I have made some progress in learning to program and developed few simple Expert Advisors. However, I haven't yet designed yet a single program for which I could trust my money, because while they are usually generate some hypothetical profit for some backtesting period, they also lose a lot in other periods resulting in zero winnings in long run.

I wonder, if you could comment my situation and maybe recommend some useful literature that discusses the development of trading systems that are successful in long-term.

Finally, I would like to hear your opinion about applicability of statistics in trading. Because although right now I am first course undergraduate student in mathematics, I plan to change my subject to statistics after the end of the first semester and wonder how potentially good such decision is.


Thank you for raising these issues.

In TTP we don't tell other people what they "should" do.

In general, you might consider studying things you enjoy - and sticking with them until you master them.

You might also consider taking your feelings about <what to do> to Tribe.

Statistics, Like Mustard Seeds

can help you or not
depending on how you use them.

Nov 17, 2014

Trance Management
(see Tribe Meeting Report, Below)


I see these two sequences on the right column do have subtle difference. Thank you for the help!

I might need to take my feeling of "WOW, I can't believe we have a childbirth process in our tribe!" into the tribe. |=)

Thank you for sharing your process.

In practice, these subtle differences can lead to very different results.

You might consider experimenting with these methods to determine if you and your Tribe have a preference.

Nov 17, 2014

Water Rights

Dear Ed,

Thank you for going into more detail about private property and free competition. You help me to deepen and clarify my own thoughts and feelings.

When you mention "the guy who owns the river" as someone who would not want toxins dumped in his river, I wonder how you can know that.

What if the guy who owns the river is also the guy who owns the manufacturing plant that can make a cheaper (more competitive) product if they don't have to worry about the toxic by-products that they dump in the river?

By choosing a river as your example, you also open the issue of who owns what part of the river. What if the guy who owns the plant and owns the river looks like the guy you picture in your graphic...the greedy guy who couldn't care less about other people's problems or well-being?

If he just owns the part of the river that flows by his property, can he build a dam on his part and charge the people downstream for water? If the water is polluted and harms their health and their crops, what recourse do they have?

I guess they could move and hope the same thing doesn't happen at the next place.

Or they could band together and create a system that has agreements between people about how to go about decision-making that affects the greater community.

Yet they still must make an agreement about how to handle people who won't go along with the agreements!

Now this is making me wonder about the framers of the Constitution and I notice myself wanting to know more about what they originally had in can't be our present system that they envisioned!

Thanks for the opportunity to think about these things and thanks for Govopoly.

Thank you for raising these issues.

Rivers provide interesting exercises in sorting out private property; you have the river banks, the river bed, the water itself, the resources in the water, the surface of the water, access to the water, the right to use the water, the right to put things into the water, etc.

Normally, people who live in communities near a river share their thoughts and feelings about these issues and come up with customs to guide the enjoyment of these resources.

In my book, Govopoly, I claim that as we enter The 39th Day, the Govopoly System assimilates the power to create laws - and then proceeds to assign "legal" rights and obligations in favor of the Govopolists.

Note: as the Govopoly System (control-centric) comes to replace the Free-Competition Sector (intimacy-centric), the nature of communication in relationships on all levels experiences a corresponding shift.

In TTP we aim to reclaim some of the richness, joy and efficacy of intimacy-centric relating - while coming to terms with the demise of the Free-Competition Sector.

River Rafters

currently operating
according to the custom
that they may enjoy the surface.

Nov 16, 2014

Feelings About Regulating the Internet

Dear Ed,

I notice your mention of the FCC changing the "rules" for the Internet and I do some further research to understand the issue better.

I find the following clip by John Oliver, my go-to guy for exposing the hanky-panky going on behind the scenes:

It sounds like a scenario that was scripted directly from the pages of your book, Govopoly.

As to my feelings, again I feel helpless and wonder why we keep hoping that each new politician will resist or change the system.

At the same time, I don't think the "free-competition will help us all" position accounts for the business model that puts cost-cutting ahead of right livelihood and the best interests of the community.

For instance, a manufacturer who is not constrained by regulations from dumping toxic substances in order to save costs will have a more competitive price for his product. A builder who does not have to follow codes may build cheaper but more dangerous structures.

Will we have to create citizen watchdog groups to expose the greedy violators?

I wonder if free-competition advocates assume that everyone will be guided by a sense of what is best for the community. That seems naive to me.

Anyway, I'm sold on the idea that the FCC is working hard to validate your Govopoly theories!

Thank you for sharing your process.

In a truly private-ownership, free-competition system (hard to find these days), you have little "toxic waste dumping" since the guy who owns the river makes sure no one dumps chemicals into it. You generally get dumping into public places (government ownership) per authorization by legislation and licence.

In a private-ownership, free-competition system, you can find a wide variety of home choices for people who would rather decide for themselves how much of their budgets to spend for safety, foundation, appearance, landscaping, etc. Our current system of building codes and borrowing rules "protects" many young people from moving in to their first homes.

In a free-competition system, no one forces you to buy anything you don't want - or to give money to anyone you don't like.

Complaints about Private Property and Free Competition generally circulate around the fringes where you find public property and restraint of competition.

In Govopoly, I assert, among other things, that as assimilation proceeds, fewer and fewer people understand and appreciate and defend the free-competition system.

You might consider taking your feelings about <greed> and <fairness> to Tribe.

Taking Money by Force

generally requires
government sanction.

Nov 15, 2014

Positive Intention of Avoidance

Hi Ed,

Thought i would just share this.

For the longest time i have had trouble with avoidance. One way that shows up is thru compulsive watching of TV at night after everyone is asleep (kinda the time i have an opportunity to catch up on pending tasks). I always thought that the reason i avoid is that my mind is unconsciously protecting me from the potential pain i would experience when i realize how much behind i am on some of those tasks.

Easy to just say that. But as i was just driving home one day, it kind of hit me that yes, my unconscious mind (the avoidance feeling probably) is indeed protecting me. For the first time i saw it as a positive intention.

I judge it much less now (the avoidance feeling). I haven't (dis)solved my avoidance drama, but maybe this was a step in that direction.


Thank you for sharing your process.

Nov 15, 2014

Tribe Meeting Report:
Practicing Social Skills


We have 4 members in the Oct 24 meeting in [City] Tribe. In this meeting we run three processes.

While waiting for one more member to arrive, I request to role play a situation I have the day before the meeting. I go to the community pool to pick up my son and meet another parent. We know each other a little bit. I see he is sitting there reading his phone. I want to chat with him a little bit before leave. So I walk up to him and say Hi. and he responds. Then I pull a chair and sit beside him and ask him how his day is. He says good and ask how I am. I tell him I feel relax. Then he tells me he has a meeting at 6:30 and leave. I sit there feel stuck, embarrassed and unhappy. I tell the tribe I want to role play and practice this situation with intimacy centric method.

One member volunteers to be the parent. I replay the control centric way and he leaves, and I petrified there feeling embarrassed and shutdown. The second time, when he tells me he is having a meeting soon and want to leave, I immediate tell him that I feel sorry catching him on a bad time. He seems to be very happy and tells me he wants to talk to me tomorrow.

Now I want to do it again. This time, when I approach the parent, I say "Hi Bill, I want to chat with you right now, I am wondering how you feel about it?" He smiles and tell me that he is leaving soon. So we agree to talk tomorrow. In this round, I am able to share my feeling of "wanting to chat" and " want to know how he feels about chatting right now", right before I take action of approaching him to start a chat.

Then another member volunteers to be the parent. This time I want to explore another option, even it's not better than the 2nd one. After I pull a chair close to him, and a very short talk. I notice he is busy and I tell him how I feel, "Bill, I feel regret for I am probably disturbing you right now. Maybe it's not a good time for us to talk?", He agrees and tell me he is leaving, but he wants to talk to me tomorrow. I agree and leave. We still maintain rapport.

We start drumming at 7:00PM.

During check in circle, I tell the tribe that I am making some progress to apply the intimacy centric method in daily life. When I go to coworkers office, now I remember to ask him "how you feel about explain to me this part of source code right now?" before I ask him the actually question. When I want to explain to my son how a motor works, I ask my son " son, how do you feel about it if I tell you how the motor works right now" "I wonder if you want to hear it right now?", When I want to talk about my new "insight" to my wife, I start to say " Honey, I want to talk about a new realization I, I wonder if I am making you feel uncomfortable or pressure if I talk this to you", "I wonder if you want to hear more?"

I thank the two members who help me in the role play. In the tribe, I do clinics to correct the model of "feeling/wanting then acting" and replace it with "feeling/wanting, aware, share and connect wanting/feelings, then acting" model. Like the golfer changes their mechanics from "wanting to swing, then swing" to "wanting to swing, leg push, turn body, turn shoulder, then swing." We work on our mental mechanics.

We then check in issues. One member has an issue to focus and finish goal in study new technology. He feels overwhelmed by many things he has to do, he feels headache, confusion, upset to "too old to learn this", "I also need to start a family". Tribe help him to get into forms. He points to the upper forehead and says he feels headache over there. I ask him to amplify the pain. He seems not willing to experience that pain. We acknowledge his unwillingness and he gets into other forms.

He recalls when he was little boy, his mom is waiting for student visa to get out of the country, in hope to bring the family from a financial disaster. She talks to him that she is too old to learn new stuff in foreign college. She seems very anxious and worried.

I ask the member if he wants to relive this situation. He seems not to hear it. And continues talking about his incident and his feeling of confusion, hopeless and fear. I ask him again, and he ignores it. I feel it seems a prefabbed pebble, and even the client himself doesn't like to stop here. He keeps going. One member ask him how he feels about the hopeless and confusion. He does a form. So we ask him to follow the feeling again.

Later he experience the headache again and start to talk about his head is stuck on a bone and he can't get out. We ask what's happening to him. He says he is in the birth canal and his forehead is pressing a piece of bone in his mother's pelvis. This catches my attention. This is the first time our tribe retrieve a child birth experience. The client starts to describe in detail what happens during his childbirth. I ask him if he hears this from his mom later or it comes from his own memory of the experience. He tell us that this comes from his own memory in the moment.

He tells the tribe he see himself stuck at the birth canal, his forehead pressing into a bone and the doctor tells the mom she needs a c-section. Doctor asks the nurse to go to check insurance. The nurse rushes out. The mom then asks the doctor to keep the baby safe if he can only save one life. Then the nurse comes back in, then there is some noise.

We role play this situation. One member plays the doctor, another plays the nurse. And I play the mom. We have billiard board table in the meeting room and I ask the client to crawl into the bottom of the table and stuck his forehead at the side board underneath the table.

We replay the situation for the first round and member gets into roles quickly. The client tells us it's very similar to the real situation. I am wondering how a baby in the womb can share feelings with the doctor and the mother. And the client move on and tells us that he wants to relive the situation with intimacy-centric method. He shares his feelings with the doctor, and the doctor tells him that he feel urgency to take action. When the client asks me, the mom, how I feel, I tell him that I feel scared, and feel sad that I might not be able to take care of him and watch him grow. The client thank me for sharing my feeling and share with me his feeling stuck, confusion and appreciation.

When check out, the client tells the Tribe that he can never imagine that he is able to recall such clear memory of his childbirth. He just focuses and follows his feelings and the feeling is like the index which leads him to the archives. I share with the tribe my experience in Breathwork where I re-experience my childbirth too, and I see the Rock Process's benefit of not only to re-live the experience as is, it also gives opportunity to re-live with a new proactive action pattern.

The process triggers members' interest in Dr Grof's theory and Breathwork and we share some feelings and thoughts about book reading, FAQ Breathwork.

I feel inspiration by the client's stick-to-it-ness of following his feelings to open the inner door. And I feel I have been a little away from my feelings recent days and want to work. I ask the tribe if they want to do a process for me, and ask a member if he want to do his own process today. I get the support from the Tribe. So I report to the Tribe one of my problem I plan to work on, Sometimes I can't talk clearly. I mutter in very low voice and barely understandable, mostly when I am nervous, timid, and I tend to talk too loud and fast when excited. I want to be able to manage my talking system in various mood.

Tribe help me to get into forms when I mutter words. I feel numb, weak on my facial muscle, and the muscles can not follow my mind; I feel itchy in my throat. When I freeze, I see my grandpa is yelling at me. I recall that when I was about 8 years old, I visit my grandpa and live with him for a month. Before I going back home, one night he bought some chicken and made a dinner for me and my cousin.

During the dinner, I might have done something wrong and he suddenly gets very mad at me and starts to scold me. He blames me I don't appreciate what he does for me. I feel shocked, scared and embarrassed. I want to explain for myself and I can't make a voice. I see my cousin is looking at me. He looks secured, safe. I feel bad I lose my face in front of him.

I ask to re-live this drama with intimacy-centric method. One member manage my process, one volunteers to be the grandpa and one volunteers to be the cousin. During the dinner, it suddenly comes to my mind that I might tease my grandpa that day.

And it comes to my mind that I make fun of his bald head. I pick up a piece of chicken and chuckles and tell my cousin, " [name] this chicken butt looks like grandpa's head." And the grandpa gets extremely angry and blame my ingrate and not respecting old people. I feel my mouth, tongue and throat froze, and the cousin looks at me in the same way as in my memory. I feel trapped alone and shame.

Then the next round I try to it with intimacy model. After I make the flippant comment, my grandpa gets angry again and scolds me. I ask him how he feels. He tells me that he feel angry, unappreciated. I thank him for telling me his feeling and tell him I want to hear more. He then tell me he feel not being respected too. I thank him again and tell him how I feel. I say I feel scared, and regret I am reckless making comment, and I feel sorry. Grandpa seems to be calmer and tell me that he might overreact. And he tells me I can continue eating now.

In the next round, I try to detect feelings in an earlier stage. I detect my impulse of wanting to make a joke, so I ask my cousin whether he wants to hear a joke. He says yes. I feel a little hesitation, and share with my cousin, "How do you feel I tell a joke about grandpa?", He feels my apprehension too and goes blank. My grandpa overhears it and ask me "Are you making a joke about me", I look at him and want to say yes. But somehow I smell danger, and I tell him " No. I don't want trouble." I ask grandpa if he wants to join us to eat right now, I can go to get a bottle of wine for him. I feel lucky I pull myself out of a bad trade in time.

During the check out, I talk about me as a role model of my cousin and end up with experiencing the shame in front out my follower. I start to realize that feeling of wanting to be a hero of younger kids might also be the factor which triggers me to challenge the authority. A member checks out and tells me that my very last play is the real role model for younger play. I agree.

I release all the members from their role and thank everyone in the tribe for helping me in my process. We conclude the meeting at midnight.

Thank you,

Thank you for sharing your process and for documenting your meeting.

You might consider your requests to the hot seat:
1. "Amplify the pain."
2. "Relive the situation."
3. "Tell me if this comes from your mom or your memory."

Each of these requires the client to vacate his trance and to engage a logical process with you.

You might consider employing these encouragements, instead:
1. "Good, do more of that with your face."
2. "Great, keep going."
3. [Save analysis until checkout].

In this way, you can help keep your client to stay in process.

Supporting the Trance State

requires sensitivity
as well as logic.

Nov 14, 2014

Wants to Start a Tribe

Dear Ed,

I am from a non-English speaking country that is foreign to TTP concepts. There is no Tribe.

I am thinking to buy TTP book but I am not sure if reading and understanding the book is enough to try and start a local Tribe? Or I need the experience of being part of an existing Tribe before starting a local tribe?

Thank you,

Thank you for raising this issue.

You can learn about TTP from FAQ, from the book, by attending a Tribe Meeting and by attending a Workshop.

While people take many different approaches to the work, most seem to get it best through practice.
Nov 14, 2014

Cutting Losses / Using Stops

Dear Mr Seykota

Could you help me understand what is the difference between "cutting losses" and placing a "stop loss" please?

I listened your song with great admiration and as you mentioned these two rules separately, I assumed that there is a diference between the two, but I am not sure which they are. Perhaps you could give an example so I could understand better. I hope it would not take too much of your time.

With kind regards,

Thank you for raising this issue.

Risk control depends on some form of cutting losses - to limit the amount you can lose on a trade.

Stop loss orders provide an automatic way to cut losses.
Nov 13, 2014

Day Trading Posts

Hi Ed,

Last night I notice there are now many "day trading" posts on FAQ.

I feel <inquisitive>and <amused> as I notice the quantity and tone of the day trading related posts. Something about the posts in aggregate also feels comedic to me. It feels like <unimportant>+<urgent> = <frantic>

There seem to be a variety of different potential dramas and opportunities to identify issues to work on for all involved.

I wonder if the structural cost disadvantages, immediacy / urgency / speed / day trade margin & leverage characteristics of day trading attract people with generally related or similar dramas to play out their dramas together in markets and at a pace that suits their process.

The phrase "Wherever you go, there you are" comes to mind.

Maybe the fast pace serves as a "fast forward" button to expedite different unrelated dramas and develops the drama to the point of "impossible to avoid feeling the feeling" quickly. This seems to fit my own experiences of not wanting to experience <wait>, <want it now> and <rush>.

This morning:

I think "I want to send Ed a gift" as I walk to my office this morning.

I have an object in mind and imagine you liking / being curious about / disliking the object.

No particular feeling of judgement or attachment to any particular imagined vector comes up as I picture a variety of responses you may have. I notice that thought process passes and that I'm walking up stairs.

I realize the feeling of <want to send Ed a gift> is really
<express gratitude>.

Thank you Ed for providing this forum and sharing the technology and methods of TTP.

I feel it often since the workshop: <thank you>.

I have an inclination to look at Shinzen Young's blog. I recall thinking his posts about meditation feel related to TTP.

I decide to share a link to a post I enjoy. Others may also enjoy it.

Thank you.

Thank you for sharing your process.

Some people seem able to trade short-term swings in the market using a combination of methods plus some kind of sixth sense.

I know of no way to trade short-term swings with an automatic system, primarily due to hgh transaction costs relative to profit potential.
Nov 12, 2014

Debt Trap

Hi Ed.

I love your picture playing "to a throng of zero". The photo is very nice.

I hope you are well.

I, as always struggling with my finances.

You know what the long term effect for a person who files for bankruptcy? I had to close my business and I'm in a difficult situation.

Thinking about filing for bankruptcy. I have to investigate. With my not so good credit, damaged through the years, I can not get a loan to consolidate my debts.

I do not know what to do. Any suggestions please?

I Should hide in Europe, maybe, ha ha! Meanwhile, I will try to continue to do some things around the house to survive.

Thank you for sharing your process.

Your solution might involve more than asking for more money or declaring bankruptcy; it might involve coming up with a plan that balances your income with your expenses.

People generally hesitate to put water into a bucket with a hole, even if you have a good excuse for the hole.

You might consider taking your feelings about <delaying gratification> to Tribe.

Nov 12, 2014

Workshop Follow Up: From Control to Intimacy

Dear Ed,

One month ago I sit in your Workshop. I deliberately choose the area of my greatest insecurity to set for my goal: to play music in the company of others on a regular basis.

Though I continue to move forward in other important areas that I wish to change, such as trying new activities in which I expose myself to the judgment or disapproval of others, in the area of my music I still drag my feet.

I refuse to "die with my music still in me!" I pick up my instrument tonight after playing only sporadically during the past month.

The workshop represents my commitment to myself and to life. I don't have much time left!

I display my "bumper sticker" board prominently in my home where I can see it many times per day.

I accept that I take my time; I neutralize my judgment of myself. I accept that I will not give up.

What I learn in the Workshop about communication influences me daily. I hear the nuances of control in my words and often can correct them before I even speak. I listen to others more carefully, I respond to them more simply and clearly.

I feel exhilaration even in the midst of painful exposures of my raw and messy emotions. I choose to share my feelings; I see no point in holding back.

Life is too short to wait until a better time. Now is the time.

I feel grateful to you and to my fellow Workshop participants for a life-altering experience.


Thank you for sharing your process.

Nov 12, 2014

Workshop Follow Up: More Intimacy / Less Adderall


One month since the workshop.

I am keenly aware of my process.

My relationships with family members (wife, children, parents, ex-wife, siblings) are​ great. I am in the now.

My wife and I feel closer than we have before and resolve some long standing (and silly) conflicts that arise in our day to day life. We find communication about feelings is easier both sending and receiving. We laugh about a lot of "drama".

At times I experience feelings that I formerly avoided with drama only to process after the fact in a state of "recovering from X,Y,Z".

Now am willing to feel fear, I don't want to do it, I can do anything, not good enough, blow up, tired and a number of other feelings that I have formerly experienced medicinally.

I become aware of many habits and beliefs related to medicinal patterns.

I feel what it feels like to be me.
I share my feelings with family, tribe (in person and via FAQ) and find that I am received.
I share my feelings and thank my clients and other people that I transact with. I find that they receive me and appreciate being received by me. ​

I do not take adderall.

I am experiencing more volatility in my mood and variability in the range and extremes of what I feel yet it does not feel like suffering in any way.

There is a certain richness or emotional texture in the variability.

Feelings are what they are, unadulterated by chemical or behavioral filters. When I feel a resistance to feeling something or a judgement, I pause to determine the intention. I am mindful of how I am feeling and ​willing to feel.

The feelings communicate my intentions to me and help me to make proactive decisions.

My conscious behavior employs the intimacy model.

I spend a lot of time writing to FAQ and reviewing my feelings, desires, intentions, commitments and plans.

The "write to FAQ" process feels like excavation. I find my structure surrounded by a lot of debris and contextual dirt.

I discover how I am architected. I discover how my choices, results and experience of them flow from my willingness or unwillingness to experience feelings.

A lot of time passes slowly and quickly at the same time. The workshop feels like it is years ago and now. I experience more feeling content while I am awake and when I sleep.

I feel an expansion and increasing density of feelings in the now as a flow of now.

The [City] Tribe grows ... participants experience feelings and support each other.

I work with friends in our tribe and with FAQ to learn about feelings and my process. I start reverse engineering my discretionary trading process and find elements that I can automate.

I collaborate with Tribe members on system design and research.

I provide a place to meet and work on trading research, development and to enjoy collaborative effort.

I work on my art.

I observe and experience the impact of the intimacy model in my life and the positive outcomes it creates for myself and for others I encounter.

It is profound and profoundly good.

I understand that I am profoundly and genuinely good.

I experience the feelings and changes taking shape.

Thank you.


Thank you for sharing your process
Nov 12, 2014

Workshop Follow Up -
Better Relationships with Partners and with Daughter

Dear Chief and Support Team,

Thank you for supporting me reaching my snapshot. My snapshot is:

I have 100 clients in my fund.

I get one more client since the workshop. I have two others that are interested in my fund.

After the workshop, I continue to have more awareness with my feelings.
When I'm in NY, before the workshop, both funds are long USD against several currencies and we decided to cover some positions following our models.

During the workshop [Name] commented that S&P was down 30 points on Friday 10th. I thought that we are ok, because we had light positions and we didn't have any S&P long and we had covered some of our longs USD positions.

When I'm in the workshop, my partners in [NY] were managing the [Name] fund. When I arrive in [Country] I receive an e-mail from Risk Manager showing that [Name] Fund was long heavily in USD against others currencies (with a bigger exposure than before the workshop).

I sent an e-mail to Risk Manager asking about if the report was right. He said yes. My partners decided to put a bigger position and long USD back.

I feel angry, betrayed and nervous about it.

Obviously we start to losing money with these new positions and I reuse my old pattern before my Rock Process in the workshop. I shut down and I decided to not let my partners trade my fund.

I start to avoid my partners and in a certain way, I kick them because of their mistakes. The worst part was that I shut down and I stop talking with potential clients about the fund. It is an old pattern that when the fund is down in a month, I try to hide it and stop talking with potential investors.

After sometime I realize that I was using my old pattern.

But this time I don't know how, I decide to use my new Heart Rock, I and my partners were discussing and I start to share feeling with one of my partners. I say that I feel betrayed I feel disrespected by him. He receives me and shares some feeling that once he feels the same way.

After we share the feeling I stop of blocking them to trade for [Name] fund and we are using the same risk and positions for both funds.

The trades are more mechanical after that and more important they are happening in the now. There isn't more the last trade in this asset was a loser or a winner I'm just following our investment process and following now.

After the workshop, my relationship with my older daughter is much better. I recall one night she woke up and wake me up crying saying that she can't sleep.

I go to her room and start to share feeling with her.

I say what are you feeling? She says fear. I say tell me more. She says that she is feeling fear and I say it is ok to feel this way, She asks me if I feel fear. I say of course. I feel fear that something bad happens to you or our family. I feel fear that my business don't grow. Etc.

She says. Really? Yes I say yes. I feel fear. She stops to cry and decides to sleep. I say bye. We talk tomorrow and she sleeps.

Another day, my older daughter says that I'm the only one that understands her.

Before the workshop, our relationship was not so open and she refuses to talk to me.

Thank you for receiving me.
Thank you for sharing your process - and for exemplifying intimacy-centric relationships with your partners and daughter.

Show Her the Way

gently, one step at a time.

Nov 12, 2014

Coaching T-Ball Brings Up Issues


I just finished a commitment I made to coach my sons tee ball team and I have some feelings about my experience.

I have coached sports for dozens of seasons so far and my over arching principle has been that there is not much a coach can do to make youngsters into high level players but there is a lot coaches can do to influence kids desire to play.

I share this philosophy with parents and on the surface most parents praise this philosophy. The problem is that many of their actions to not line up with this philosophy. I have some observations specific to t-ball. Baseball for young kids is a highly technical game where most kids under the age of 6 or 7 don't possess the motor skills to technically play the sport the way more mature players can.

The main emotions that come up for me are fear and anger. I am fearful that my coaching is being judged by the parents. I am angry because when a parent shouts instructions at their child the child has a choice to obey their instructions which results in more instructions or to just have fun which results in the child disappointing the parents. In the end it appears to be a Faustian choice for the child.

The choice I make to ignore the additional instructions and focus on the basics and having fun.

I observe that this creates disappointment in the parents that I am not instructing their 4 and 5 year olds in every technical aspect of baseball. This is where the fear of judgment comes in and frankly makes me not want to be involved. I feel that my energy can be better utilized influencing my son and developing rapport with him and the game. But I also fear being a quitter in my desire not to try and influence others in this way.

In the end, intimacy requires willingness and I have found a large black hole of willingness in children's sports. At this moment I don't desire to continue coaching, it creates too much of a codependent relationship and too much drama.

I feel disappointment in my lack of willingness. I may revisit my decision after the holidays but as of right now I am accepting the fact that most parents want to live in a controlling world. This is a world that I feel very isolated from since I have embraced TTP.

Thank you for sharing your process.

You might consider taking your feelings about <having to make Faustian Choices> to Tribe.

Additionally, and from the intimacy-centric model, you might consider calling a meeting of all the parents to share feelings about the trade-offs you see between inspiration and instruction.

You can manage this community meeting like a Tribe Meeting, allowing each person an opportunity to share - and to listen to other people.

You might also then administer a willingness test; for example, clearly announce your position and ask for a vote of confidence authorizing it as the official team policy.

At that point, you either gain freedom from the job - or you gain freedom do your job in your way - as dissidents may then address their policy issues to your board.

You might also consider providing an opportunity for dissident parents to organize their own supplemental "T-ball clinic" for children who wish to participate in a more control-centric training.

The Chief Executive

carries out the policies
of the board of directors.

Nov 12, 2014

Wants an Endorsement

Hello Ed,

... I am your big fan after reading the book "Market Wizards" because of the your lifestyle and your performance. Over the years I have developed some systems, which I intend to sell in Internet and I need testimonials from a respected man like you to verify the results and the quality of the strategies. Are you OK to do this for me?


Thank you for raising this issue.

FAQ does not endorse people or products - or accept sponsors or advertisements. See Ground Rules at Resources, above.
Nov 12, 2014

Tribe Meeting Report


3 members present. 2 interstate, 1 on holidays, I confused one person about the next meeting date so he misses it.

Member 1 checks in - trading well, two good profitable trades, feels things finally now really clicking together. Not hot about anything.

Member 3 back on the rails after a few wobbly weeks when I terminate my blood pressure medication which increases my stress levels for a couple of weeks (see previous workshop report). No hot issues.

Member 5 - his girlfriend of 2 1/2 years packs up and leaves without telling him. He feels the usual feelings of losing a girlfriend but also

"Here we go again. I thought I had my act together with women. No more dismissive unavailable women (like mom). And now this. I have made no progress at all really."

"I thought we were really getting on well. We would go to art galleries, all sorts of things, I paid for holidays and I was about to pay for her next year of college. She had been stressed about her exams but I though that had blown over".

"The worst feeling is the lack of respect and acknowledgement. Last time we had a bust-up, we had counselling and agreed to discuss things before breaking up".

"Maybe I dodged a bullet. On night she wakes me up in the middle of the night hysterical with wild and false allegations about infidelity, nasty internet stuff, etc. All wrong and I prove it. decide to go away for a few days to give her some time to clear her head. When I get back she has left the country. No note no nothing. Eventually her sister tells me she has gone back to <country>."

HS gets pretty hot fast. In due course he remembers feeling like this before. His mother has a lot of money invested in [petroleum firm]. HS has researched the company and tries to tell his mother it is fraudulent. His mother condescendingly, contemptuously, dismissively, ignores his advice. Even when the stock price falls substantially she maintains the same attitude. HS recalls many similar incidents with his mother - always with "that look". She is cold and emotionally unavailable to him eg will not ever hug him or hold his hand even as a child. She uses violence frequently and casually within and outside the family.

HS feels he picks girlfriends to be like this but has been trying to find someone who doesn't fit the pattern. He thought his current girlfriend was not like this.

There seem to be several things going on. For example, his girlfriend wakes up hysterical about imagined wrongs. He "proves" her feelings are "incorrect". Amazingly this doesn't work!

HS is unhappy that his hot seat has come back to the "same" issue - his toxic mother. We offer a rocks process on the dismissive mother, and point out Rome wasn't built in a day. You cannot solve every problem in one hit. And one person can certainly cause you multiple issues, as in my case ...

Still he says he no longer feels hot enough to proceed.

We have a discussion about relationships with women and how they think and feel, often very different from men and often similar.

HS told of a time a girlfriend set him up by falsely telling him she had been raped. She knew HS would therefore get into an argument with the man accused and he did and got into trouble. It turns out she was out to hurt HS and that the other guy was just collateral damage. I point out women are human beings and human beings get angry, lie, seek revenge etc. If you idealize women and put them on a pedestal you are not treating them as human beings. And you will be blind to things like the events just described. HS seems to feel this is misogynistic.

We note on checkout that the issue will still be there next time, so it is not like we have missed the chance forever. And hot seats are like pulling out crab grass. Every good hot seat makes things a bit better.

On meeting checkout, we feel we gave the hot seat a good shot but did not ultimately succeed . We feel we did surface some good issues though.

HS emails a day or so later "I must admit to being a little disappointed I couldn't push myself through to a rocks process."

Today I am reading a book I recently bought "No more Mr Nice Guy" by Robert Glover and it triggers a lot of thoughts and feelings about the HS and my own past. I am struggling to clearly distinguish - in respect of relationships with women - the intimacy model from the "nice guy" model portrayed in the book. On the one hand the HS could well have used intimacy model well in responding to the irrational fears of his girlfriend - responding to her feelings not the bogus non-facts. On the other hand, buying her everything seems very much "nice guy mode". It is hard to discuss these issues.

(Glover's idea is that there is a syndrome of "nice guys" who learned early in life that their feelings did not count, that any attempt to look after their own interests was selfish, and often they were shamed for having normal human needs and desires. The nice guy strategy is born - I will be super nice and completely undemanding and then they will love me. But it is usually accompanied by passive aggressiveness, outbursts of anger and entitlement, etc). In some cases they go the other way: "You want bad - I'll show you bad" and they embark on extreme anti-social behavior).

If nothing else I think I have my own hot seat topic for next time.

Thank you for sharing your process and for documenting your meeting.

If the Process Manager or other Tribe Members have issues in common with the Client (Hotseat), they may subtly work together to derail the process.

For example, you client "gets pretty hot fast" and presents issues about inconsistent, non-responsive women, including his mother. So far so good.

At this point, your group slides into "figuring out several things going on" and then follows up with explaining "you cannot solve problems in one hit," etc. This appears to medicate (derail) the process with logic and compassion.

You might also consider continuing with "Show me how it feels to get no response from your woman" and "Great, do more of that" and "Good job, crank it up."

You can also keep things on track with frequent willingness testing.

If the Process Manager encounters difficulty keeping a process on track, he might consider giving another Tribe Member an opportunity to manage that particular process.

One advantage a Tribe has over individual therapy: you can illuminate from multiple sources.

You Can Remove Curious Shadows

by illuminating
from multiple sources.

Nov 12, 2014

Workshop in Europe


Is there a plan for an internation a Workshop in Europe?

Thank you,

Thank you for raising this issue.

I generally schedule Workshops in response to demand.
Nov 12, 2014

Trenchant Statements


Thanks for your reply.

I would like to clarify my views with the hope of rendering our discussion more productive for both of us.

1) I share your view of retail-grade day trading and I commend your efforts on the topic.

2) I can afford to day trade.I do not want to,as I do not like it at all and I know it would likely cost me money as per point 1.

3) Given the requirement that a day trader has to trade every day in every market, I conclude the near impossibility of meeting your challenge and hence I drop it.

4) More important of all:I have the impression that your day trading challenge succeeds more in stirring up confrontation than in alerting people to the dangers of day trading.

I certainly recognize my feelings of wanting to prove you wrong when I read what I frame as absolute, trenchant statements, so much so that I take the sides of an approach I have little sympathy for.

Reading FAQ it seems other people react similarly. I wonder if this represents just a reflection of our own issues (I can certainly relate to endless arguments with my parents) or whether the way you frame the challenge (and the very choice of such a word) has something to do with it.

I would have no way (and no desire) of contesting a statement like "I feel day trading has a strong medicinal and addictive component","I feel for the people who lose their savings day-trading and I want to contribute to raising awareness on the topic".

I say this not to school you or to tell you what to do, but as honest feedback as I share your ultimate goal of freeing people from their medicinal patterns and wonder on the most effective way for doing so.

Thank you for sharing your process.

Some people respond to logic, others to empathy, some to photos af legs and still others to trenchant statements.

In Fishing as in Trading

you cast your nets
and see what swims in.

Nov 11, 2014

More on Day-Trade Challenge


Ed Says: Thank you for sharing your process. I know many long-term-systematic traders who can show every computer buy/sell signal, show their brokerage statements and show they match. Well the you need to find one and post it to prove it. I know of no short-term day-trader who can do this.

Go here and you'll find many "short term day traders" who have substantial short term trading returns over very long term periods.

I hold that short-term trading mostly serves as medicinal distraction from deeper issues.

You have to do more than "hold" you have to prove it.

Prove short-term trading (your hate) serves as medicinal distraction from deeper issues vs long-term trading (your love).

Thank you for joining the discussion - and for telling me what I have to do.

In the control-centric relationship model, we tell people what they "should" do. In the intimacy-centric relationship model, we establish rapport, share feelings and occasionally offer suggestions.

I might expect the Day-Trading System Challenge to heat up some people who wish to avoid confronting their own addictions to day-trading.

The link you cite does not even remotely carry the requirements for the challenge, namely: (1) computer output showing all day-trading signals, (2) associating brokerage statements and (3) spreadsheet showing 1:1 correspondence between (1) and (2).

You might consider taking your feelings about <your parents bossing you around> to Tribe as an entry point.

Bossy Parents
teach their kids

how to boss other people around.

Nov 11, 2014

More on Day-Trade Challenge

Ed, Thanks for your reply.

I might try and work on meeting the requirements of points 1 and 2 (3 follows form that).

Meanwhile you might want to read this part of the disclaimer as well "For the period of October 2012 thru June 2014, [Name] Trading LLC has been an active member of [Bank]'s Managed Investment Platform. The results listed above have been calculated by [Bank]... [so this verifies the track record]."

I define a day trader as someone who opens and closes all his trades in the same day and does not carry any open positions overnight, irrespective of how often he trades in any single market,or whether he trades at all on certain days and I wonder how you come up with the requirement that a day trader has to trade every day in every market.

To me it makes as much sense as saying that a long term trend follower must trade in every market every year no matter what, ignoring the fact that his system might not generate any signals for certain markets for the period (think of crude range-trading in the last few years - notwithstanding the recent rout it still has to clear support at 75$ on the continuous chart).

Of course you present the challenge and you make up the rules and I know full well I have to follow them to get the dough.

Yet I have a feeling you design this one to make the challenge as hard to meet as you can, rather than to prove a point as objectively as you can.

Anyway, I intend to follow up on the topic only if I can come up with the docs you require (it might take me several months to do so,if at all).

In any case I find it ironic that I take up your challenge when I prefer long-term trading and investing and I can fully feel the excitement and drama growing inside me whenever I stare at my quote screen too often. At least I do not try to meet it myself and I rely on surrogates!


Thank you for sharing your process.

I know many long-term-systematic traders who can show every computer buy/sell signal, show their brokerage statements and show they match.

I know of no short-term day-trader who can do this.

The point of the challenge has to do with drawing attention to the inherent problems with retail-grade high-frequency trading systems. (This does not refer to ultra-high-speed scalping and market-making systems - with which the market makers may enjoy negative commission rates).

As the frequency of trading increases, the duration of trades decreases as does the price range and opportunity for profit. Transaction costs (skid, commissions, errors, etc.), however, do not fall proportionately so short-term traders have a structural disadvantage.

I hold that short-term trading mostly serves as medicinal distraction from deeper issues.

You might consider taking your feelings about <wanting to win an argument> to Tribe.

If You Can't Afford
to day trade

you can medicate your feelings
by arguing.

Nov 11, 2014

Peaceful Easy Feeling about Govopoly


A close relative was going through some anguish about retiring. She was in line for a pension and had assets built up. There were many e-mails etc about how she had been to this website or that site using calculators to see if she would have enough to live on. I said you could never know the future but that I could help if she would tell me the exact date that she was going to die. Knowing that, I could perhaps get a close figure. That didn't go over too well.

The second thing I could do for her was give her Govopoly to read. She did, and after discussions, she is a convert. We discussed that no matter how many plans you make about the non-existing future you can never really be sure, and the biggest threat to any of her plans was the fact that the Government can change the rules at any time.

The added benefit was that this election was a lot calmer. There was no need to get all fired up as the close vote counts etc. It wouldn't really alter much in long run. So no need to participate in all the hype.

She seems much more relaxed about it all now..

Thank you for sharing your process.

In the 39th Day

you can worry and complain

or have a system ready
to get a piece of the action.

Nov 11, 2014

Mineral Balance

Hi Ed,

We have a conversation before and you are taking some different minerals to balance your ph perhaps. Can you describe your process on that subject?

Thank you for raising this issue.

You might consider balancing pH with either an acid (lemon juice) or a base (Camembert cheese; tofu).

Note: High-intensity breathing (as in Breathwork) depletes specific CO2 and occasions mild alkalosis.

Occasionally, I supplement my ph-ortfolio with minerals like Cu(29), Pd(46), Ag(47), Pt(78) and Au(79).
Nov 11, 2014

Volatility and Trade Sizing

Greetings Chief Ed, I have a question about how to perceive volatility for sizing and placing bets.

I am trading a moving average crossover system that trades with the trend.

I manage risk primarily by sizing the bet relative to perceived volatility. I size bets smaller (or, do not play) when volatility is high. I size larger bets when volatility is low.

To measure and perceive volatility, I compute the gap, in percent, between 2 of the system's moving averages:

Moving Avg #1: 50.00
Moving Avg #2: 39.40
Gap size: (50.00/39.40)-1 = 26.90%

Positions are sized according to a linear sizing schedule, based on X% and Y%, where X and Y are the upper and lower boundaries.

When the gap is over X%, where X indicates very high volatility, I do not play. When the gap is between X and Y, the acceptable range, I size bets and place them according to entry criteria. When the gap is as low as Y%, or lower, I place bets at the maximum size the system allows.

I understand that many traders use ATR and other 1-off, 2-off, and even 3-off (derivative of price) measures of volatility.

Simulation data indicates good results are possible. I am getting very good results as I forward-test using moving-average gaps.

I wonder if using "MA gaps" instead of these other (far more complicated) measures is a good and simple way to perceive volatility in a given instrument, in alignment with the principle of Occam's razor:

Occam's razor is a problem-solving principle devised by William of Ockham (c. 1287–1347), who was an English Franciscan friar and scholastic philosopher and theologian. The principle states that among competing hypotheses, the one with the fewest assumptions should be selected.

Thank you for sharing your process and for raising the issue of using trend strength as a proxy for volatility.


Your formula, X = (MA1-MA2)/MA2, indicates trend strength (or) price velocity.

Indeed, since we cannot measure, or even detect, velocity in a moment of now, we have to resort to approximations, such as subtracting distances.


AR (average range) indicates the average of recent ranges (High - Low). ATR (average true range) indicates the average of recent true ranges (High - Low; Yesterday Close);

ATR and other volatility metrics aim to help us to determine an "optimal" place to put an original protective stop. We want it close enough to protect capital and far enough away so that our stop doesn't succumb to normal market noise.

Velocity, Volatility and Price

You can make a case that during the early phases of an up-move, the price, the velocity and the volatility all rise.

For bearish moves, you can have negative velocity and positive volatility.

The Challenge

Part of the challenge of system design lies in finding a something that fits you - so that you can stick with it. If your velocity-specific position-sizing method pleases you and passes back tests, you might consider using it as a proxy for ATR.

Trial and Error

If it doesn't work,
maybe try adding a carrot.

Nov 11, 2014

Throwing Light on Candles

Dear Ed,

many thanks for your answers.

I have buy and read three books from Steve Nison (together 785 pages), but my answer is shorter.

First answer:
The white candle is great, have up no shaddow and stopped on a restiance.
The black candle have a up shaddow and stopped also on the restiance.
You have a doji with a great up shaddow.
You have a falling window in the near of the restiance.
You have a great black candle without up shaddow.

Second answer:
For selling I used the close price for the limit order.
For short seeling I used the middle of open and close price for the limit order. (o/2 + c/2).

And last but not least: Steve Nison say and write: The candle are not a technic they are art!

I wish you and your readers good candles and much fun with your whipsaw song.

Many thanks.

Have a wonderful time and success.
Thank you for sharing your process.

Apparently, your candlestick "system" requires some artful discretion.
Nov 11, 2014

Day-Trade System Challenge

Hi Ed,

I do not day trade and I don't have a horse in the race (i.e. I don't care much whether day trading succeeds in generating lasting profits for the trader,in fact I even share your view that day trading represents a mostly medicinal and money-losing activity and even when it proves successful it generally cannot match the returns that other longer-term strategies offer).

Yet, I feel you overextend yourself with your recent absolute statement "Day trading systems do not exist" and render yourself vulnerable to an easy blow.

I enclose here a one-pager for a fund that comes as close as I can think of to meeting the definition of systematic day-trading (I do not know whether you can display it on FAQ without violating one of the myriad rules and regulations designed to "protect investors").

I doubt I can get the manager to disclose actual spreadsheets of his signals and brokerage statements. The fact that he manages some 100-200 million $ and that he offers his program on third-party managed account platforms that clear his trades and independently calculate and report his performance to investors in said platforms leads me to believe that the likelihood of him actually doing what he says approaches 100%.

This might not meet all the formal requirements of your challenge. I feel it meets the substance though, by showing the existence of a profitable mechanical day-trading system.

I have a vague memory of you pledging 10.000$ to anyone who meets your challenge (I feel unsure about it and I can only find a written reference to it on FAQ on the 19th of March 2013,I also seem to recall you saying that at the 2013 Austin Workshop).

If you feel my submission qualifies as successful (I have no intention of arguing about it),

I gladly wait your instruction on how to collect the prize


Thank you for sending me the sheet about the fund.

You may recall these requirements to collect the prize:

1. Show all the signals the system generates for the last 3 months - from the computer that automatically generates the signals. (Day traders must show at least one round turn per day per market).

2. Show a list of all the actual trades (from the broker).

3. Arrange (1) and (2) above in a spreadsheet, showing a 1:1 correspondence between signals and trades.

4. Confirm net profitability for the 3-month period.

Your submission <a one-pager plus your hunch that you cannot produce (1) and (2) above> does not fulfil the requirements. You might consider noticing that, according to the one-pager, the fund manager cannot fulfil the requirements either.

Your feeling <that your submission meets the substance> does not fulfil the requirements.

I know of several systematic long-term traders that can meet these requirements - with the exception that they rarely close a position the same day they enter it.

Instructions on how to collect the prize: meet the requirements.

Results for Day Trade Fund

comparing with NewEdge CTA
and S&P Total Return Indices.

Results, above
and disclaimer, below
appear in one-pager.

Return calculations in this document are not audited and have not been independently verified, and include for some periods simulated and not actual returns, for periods where there were no actual returns available.


Nov 11, 2014

Govopoly - GANP and the Plague

Dear Ed,

Thank you for asking me to share my feelings about the situation described in the John Oliver video clip regarding FIFA, the soccer organization.

I feel fear and confusion, or perhaps I mean I feel torn, about the fact that money and power seems to be able to buy influence in our governments, whether local, state or federal.

I hear about it all the time and then I just shut down and make it "go away." I wonder what can be done. I feel helpless.

It seems that electing new people to these positions doesn't really change much about "how things work" in government. Deepest pockets seem to prevail.

The prospect of having no, or minimal, government frightens me as well.

As a student of human nature, I know that our innate insecurity leads some of us to take what we want by aggressively acting outside the norms of society.

So counting on "customs" doesn't help when dealing with those who learn to exploit weakness as one of their medicinal rocks for handling their own fears. These people see the trust of others as a vulnerability.

Perhaps this represents the collapse of which you warn, but as part of human nature won't greed and the need for power and control always plague us
Thank you for sharing your process.

I estimate you have more intelligence and experience with economics and politics than most people.

Still, you hold "greed and the need for power" (GANP) as the "plague."

I hold that GANP in the Govopoly system leads to increasing regulation as the assimilation of the Free-Competition Sector produces a higher standard of living for people at the top of the Govopoly system.

GANP between freely competing businesses keeps everyone on his toes and leads to innovation, employment, better products, lower prices, more freedom, the growth of a middle class and a higher standard of living for most people.

Thus, in the Govopoly System, GANP --> lower standard of living; in the Free-Competition Sector GANP--> higher standard of living.

At this point, even highly intelligent people do not easily connect the dots between GANP, the Govopoly system and the 39th Day. Absent this connection, assimilation has no impediments.

For example, even with the recent and conspicuous "message" from the voters to congress, we might shortly expect to see increasing control of Internet by the FCC.

When enough people come to create intimacy-centric relationships with their leaders, their leaders then must reflect the feelings and desires of their constituents. This situation generally appears in small organizations, rarely in large ones.

You might consider taking your feelings about <living in a much more restrictive society> to Tribe.

Assimilation Proceeds

as people trade freedom
for the illusions
of fairness and security.

Nov 11, 2014

Workshop Follow Up


It's been a month since the TTP Workshop in Puerto Rico.

I enjoy using the "count to 10" method to "keep on keeping on" with my system development.

I improve my systems by letting them pick what to trade.

I feel all my feelings.

I stay present in the now as events unfold.
Thank you for sharing your process.
Nov 11, 2014

Whipsaw Song

Dear Ed,

Exist a German translation? Thanks that you translate the first line. It was my idea also but I don't know if you speak with pictures. I have the idea that whip and saw means also up and down trends.

Many thanks.

Have a wonderful time and success ...

PS Do you speak German?

If I read or heard your family name I have every time the idea you have a Japanese name. I like the sound of your Seykota.

Thank you for raising this issue.

Originally, the word "whipsaw" refers to a saw with a thin (whip-like) blade that two men pull up and down to saw logs.

Later, whipsaw comes to describe up-and-down markets, particularly ones that stop you in and out at the tops and bottoms of minor moves.

The first line of The Whipsaw Song, "You get a whip and I get a saw," comes from my adaptation of the classic folk tune, "You get a line and I get a pole." See: The Crawdad Song by Woody Guthrie; another version by Doc Watson .

After I upload The Whip Saw Song to Internet, I find out that Google notices the word "whip" in the title and places it in its S&M category. I optimistically assume S&M refers to "Systems and Metrics."


- - - - -

Ja, ich spreche ein wenig Deutsch - aber Ich benutze es nicht viel hier in Puerto Rico. Ich glaube Mein Großvater väterlicherseits im Besitz einer Handschuhladen in Stuttgart.

Nov 11, 2014

Stop Orders and Limit Orders

Dear Ed,

I saw that my question was not so clear as I thought.

So I will explain you my idea and I think that help you do understand my question.

I don't say that you or your readers should work with an index. I used the chart only for explanations.

In end of september the candles show us that the trend is changing. We have two day time to close our position with a usual limit order.

I think to work with stop orders are not good idea and not good for the health of our depot.

Many thanks.

Have a wonderful time and success.


Thank you for sharing your process.

I wonder if you could clear a few things up for me:

1. Exactly how the "candles show us" the change in trend.

2. Exactly how you get a price for your limit order.

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