Govopoly and Trends

Hi Ed,

Reading Govopoly inspires me to work to align myself better with big trends.

I really find it such a fantastic book. I feel gratitude for your hard work writing it and sharing it.

The clarity and ability to simplify what to me always seems such a complex area is refreshing.

I feel a lot of things fall into place.

There is also a lot for me to learn.

One thing I note is that you present data simply where others obscure data behind often unnecessary complexity.

I decide that I must learn to simplify and clarify. I wonder if you can help direct my learning.

I have my first potential client, which is a big, possibly life changing step for me. I feel excitement and motivation.

I would like to display my actual data so that it is clear and comprehensible to the client ...

I want to only charge a performance fee (no management fee) ...

I calculate the bliss as per p329-330 of your new book. I note that the figures are higher than the 'pretty good' examples. I wonder if this is because of only having 5 months of data.

When speaking to a client and wanting to follow the TTP approach would you typically recommend showing both tables above or only the one net of fees?

I also find that there is an emormous amount of bureaucratic red tape when it comes to trading for other people (even in segragated accounts). This seems in line with assimilation. I read the NFA regulations and see that I have the choice of trading up to 15 accounts without having to become a CTA. I originally thought of setting up a LLC and doing exactly that. I find out that I cannot sign the POA agreements as a company unless a CTA and must sign them as an individual. This takes away the limited liability. I wonder if I should have concern about trading as an individual in terms of liability if I have clear signed business / management agreement in place. Can you shed any light on this from your experience?

I also research and find out that I can set up a company to trade segregated accounts in Switzerland and again here there is an imminent increase in bureaucratic red tape due to come into effect in 2017.

It occurs to me that with my first client that we could set up a LLC together. The business could then open a trading account which I manage. In the terms of the business agreement we could agree that my only remuneration is from performance fees. This also presents the opportunity of choosing the corporate location and some tax advantages in the choice for the client. This seems like a win win situation. I consider if this is too easy and perhaps due to inexperience I miss some catch. Is this, in the day and age of excessive bureaucracy, a good way for private individuals with shared goals to utilise the set up of a company and avoid restrictive bureaucracy that seems to be set up to 'protect' those involved in collective investment schemes and restrict win-win relationships between interested honest individuals?

I feel that I cannot be the only one considering managing money and so I hope that asking for some guidance on FAQ may serve the online tribe to some degree.

I feel hope that you may shed some light on this subject.

With gratitude,

I am a college student looking to start day trading. I have made several poor financial decisions, and I am left with a flat $.50 in my bank account. I am currently unemployed and seeking a job, which is difficult in the town I live in as a freshman.

My question I ask is how can I start day trading from nothing? Even when I do get a job, most of the money will go toward tuition and living expenses, making it difficult to start off. Do you have any suggestions for where I should start?

Thank you!

I feel dismayed by the lack of progress we as a nation seem to accept in our dealings with racism.

I believe situations like the one in Ferguson can be exacerbated by control-centric and hierarchical communication between so-called "leaders" and the citizens they purport to lead.

Yet I can also feel the fear that intimacy-centric communication won't be "strong" enough to influence people's emotions in highly-charged and polarized situations. (Watching the lead-up to the announcement of the grand jury's verdict, I imagine the police lined up holding flowers instead of riot shields and I wonder how that would have come across).

I notice I also want to believe that "rational" (not intimate) responses will offset "emotional" ones, and yet this clearly does not work to create a collaborative process.

I want to share this column by David Brooks in which he describes the way a "unifying leader" works to forge such a process. I am struck by how clearly he describes intimacy-centric leadership.

Our current political system seems to make it impossible for us to elect this type of leader for our country.

I feel very sad about this.

Nov 28, 2014

Oil Slide

Ed.

Please try pasting [this].

I am very scared of the feelings "If I leave her, she will suffer" and "if I fall in love with another woman, she will suffer a lot".

I just want to share this with you.

best regards,

Thank you for continuous giving and I wish you a happy Thanksgiving!

I'm thankful to have the Trading Tribe and your support.

Thank you.

Happy Thanksgiving to you and your loved ones.

Best,

I wish you a very happy Thanksgiving Day!

My experiences in Tribe, in your Workshop and in writing to FAQ provide me with insights, and actual life changes, that result in a feeling of enormous gratitude.

Gracias!

I'm glad to read that you're enjoying Puerto Rico.

[Name] and I fondly remember our visit with you in Bastrop earlier this
year. Our relationship keeps growing stronger. We are talking about
children and marriage and a life we want to continue building together.

Over the years, I learn much from you about intimacy and relationships.
My relationship with [Name] is different from all my previous relationships. It is hard for me to describe how much happier I am in it.

Ed, I want to ask you to do something for us. This may be a little out
of your way--but here goes. [Name] and I would like you to perform our
wedding ceremony. You teach me much about intentions and commitments.

You are the most fitting person in the world to solemnize the commitment
[Name] and I are making to each other.

Please, Let Me Help shoot that bad boy off again.

Holding Steady at the Controls

Handshakes

Ed,


After some recent events, I have been giving some thought on the differences between a handshake agreement and a written contract. I prefer the handshake agreement.

I see the handshake agreement happening in the now and staying in the now. Any deviation from the agreement can be handled quickly and if needs be, terminated in the now. Whereas, a written contract, while written now, generally gets brought up in the future pointing out things that were said in the past, where it is hard to remember what was the true intention at the time.

Haven't seen a written contract yet that did not have flaws, loopholes etc that if one wanted to vacate it, it was possible. The other aspect is that a written contract can be presented in a court to have other people interpret what was meant and one could still be forced to perform certain things.

Having had a few handshake agreements not work out; I have learned that the handshake agreement also has certain aspects to it, such as, one has to speak clearly and concisely, and,perhaps more importantly, one has to ask questions and listen attentively to the answers given. On several occasions, a question was asked and the answer given did not seem to fit at all, I rephrase the question and still get an off answer, this alerts me that something is either not being communicated or received well or the other party has no intention of meeting the agreement thus more work might be needed.

Working off a handshake seems to go smoother, information is flowing quicker, and overall less time and stress is involved knowing that each party has expressed their intention to perform and off they go to do such.

My old eyes have trouble to read the little letters on the chart illustrating the posting from Nov 24, 2014, System Design. I wonder if you would like to produce a larger text or a downloadable file from it? In the meantime, I can get new glasses.

Yours,

We meet for a meal and also bring gifts for member@1 who hosts the tribe and the pre-tribe dinners. He seems quite pleased with the gifts.

Some changes to our process this week: Member must stand when introducing hot seat topic, in order to remind him to keep it brief. We also have a "guardian" for each hot seat who has the job to call out when we go off track e.g. psychoanalysis, advice.

After drumming and exercises we tell what we are hot about.

Member#1 not hot, just annoyed with his skin problem. Trading well, still feels it has all finally come together.

#2 Returns from holidays but does not feel like trading. Takes a week to get into trading again.

#3 "Feelings of rage about SJW's (social justice warriors), professional victims, radical feminists and such who are destroying civilization in my opinion." I know it's better seen as just one part of the whole Govopoly thing but this part gets me very wound up.

#6 Feelings of uncertainty and anxiety about what is going to happen with his trading system and his trading.

I (#3) go first.
-------------------

I feel reluctant to do this hot seat as I feel something shameful lurking behind this issue for reasons I can't explain. Upon my reaching a high pitch the process manager asks for an earlier scene. At first it is rather vague and indistinct. I go back into hot seat and try for more detail which then appears. I am 4 years old or so. My cute younger brother is in the high chair getting the yummy sweets and all the attention. I try to climb into the high chair and my mother tells me to go back to my own chair. When I resist she gets the wooden spoon and hits me repeatedly. I retire to my chair and sit quietly and sullenly.

I see two problems here.

1. I am not getting what I used to get, and my strategy is to try to go back to how things used to be in the good old day (by climbing into the high chair). My brother donates the first strategy by sitting there and saying "It's great - be like me!". Perhaps he didn't realize he donates the strategy. I feel the sibling rivalry here but really more a sense of deprivation - people are taking things from me that I had, that I deserve. I feel the same way about the thieving politicians. It's not fair!

2. My response to conflict by escalating and then retreating when defeated. My father donates this strategy - blowing up then capitulate - "roll with the punches" as he used to say.

We reenact. The feels happen (pic refers*).

Then we come up with new strategies.

For issue 1. I feel the more important issue. New strategies: Accept the reality of the new situation, look for opportunities in the new situation, feel the frustration and process it. For example, old kids get to do things younger ones can't. Also my new brother can be my playmate.

For issue 2. I have covered this before. I decide to share how I feel, and ask my mother if I could have some desserts too, and some time just the two of us once in a while. In the reenactment she agrees.

We reenact and I try out the new strategies which seem to work. I say jokingly "I feel like kissing a feminist... but maybe that would not be wise."

On the way home on the train I spontaneously unsubscribe to various forums devoted to drama over these issues.

#2 is next
-------------

Returns from holidays but does not feel like trading.

He gets fairly worked up. I process manage with some difficulty, tired from my hot seat. Hot seat recalls being forced to attend language school for his ethnic group after school "when everyone else was playing". His father makes him go to this school. He attends but doesn't learn much. He realizes that his issue today partly reflects this scene but more just reflects the difficulty of changing gears after a holiday. Also the holiday was tiring (!) which adds to the difficulty of getting back into everyday life.

Hot seat feels happy with his insight at this point and does not want to do a rocks process on this scene. So we call it quits at that point.

#6 has a new issue
-------------------------

The hot seat by member #3 has brought to the surface his anger over the recent election results in his home country, where an incompetent, corrupt, crony-ridden short-sighted left wing party wins the reelection. So they continue on the road to Venezuela style ruin.

HS has trouble ramping up the feeling of anger. He keeps snapping out of the feeling within and outside the hot seat. E.g. he will say "I feel angry" and will then laugh. Similarly with the hot seat. We suggest he try and access the feeling as much as he can. He says "I have a problem that I feel angry". We suggest perhaps it is the reverse that he does not allow himself to feel angry. If you feel angry you can honor the positive intention of anger. No-one here will get mad at you for being angry. We try again and few times and he gets quite a lot better at feeling angry. He can't think of a scene from the past though. So we stop the process.

I notice he seems calmer and is sitting more upright after this. He looks more assertive.

Perhaps we strayed into advice giving here but I feel it was legitimate. He framed the problem as "I want my bad feeling anger to go away" but the TTP process is to feel the feel and process its positive intention.

---

After the meeting we review the year briefly and enjoy the many breakthroughs we have achieved through the tribe in the past year.

Thank you Ed for inventing this process!

* This pic was loaded anonymously on 4chan.org/fit a while back and I have no attribution. Warning many consider viewing 4chan not safe for life. Some things cannot be unseen.

Anonymous

You're welcome. Thank you for following up. I'm glad you write the TT book and that you take the time to read FAQ submissions and provide feedback.

I appreciate the time to you take to do this; I like the feedback loop and sharing how I feel. I feel lighter doing TT sessions, writing about the experience, and submitting to FAQ. This process feels good and easy. I wonder why I'm hesitant to share how I feel.

Thank you,

Thanks, Ed.

Got the book today – ironically just before [Prominent Politician]arrived at our office to give a presentation.

Ed,

I find myself not only losing my fear of vulnerability, but actually starting to find vulnerability exciting.

"Vulnerable" now means "open" to me.

"Open" means "something new can happen right now".

Yes, pain could happen. Rejection could happen.

Many things could happen. I can choose what to do next and that also influences what happens.

I don't mind if an uncomfortable or painful feeling happens, so I don't have to flee or shut down.

Incredibly exciting!

We will find another guru :-(

I observe market trends look similar on different time frames. When I remove time and price scale from charts it can be difficult to differentiate between hours, days, weeks, months etc.

I am wondering if the number of trades between peaks is similar in different time frames for systems that follow trends.

In your experience, is there a typical drawdown duration for your systems as counted by number of trades?

In your experience does the number of trades in drawdown increase, decrease or​ stay about the same with the addition of more markets?

In my testing I notice that the duration (in time and number of trades) does not necessarily change but the depth of drawdown can change a lot based on the markets included in the test .

I have another couple of questions:

Do you know of any good sources of information about Commodities Corp. and the way the culture and offices were organized?

I have found a few articles, some scans of company brochures here and there and have the impression that the environment was potentially a bit like a Bell Labs or MIT media lab for traders.

I am creating a Bell Labs/MIT Media Lab inspired kind of creative research environment atmosphere for traders at my office.

I like the few stories I've read and the interviews of traders associated with CC. that I have read and would like to learn as much as possible about the place, the traders and their experiences.

If you have any stories or experiences about trading and collaborating with other traders that you would like to share with me, please do.

I find that imagining great traders, learning from their experiences with the help of accounts of happenings and philosophies, interviews and biographies has been a big motivator, help and inspiration to me.

I taught myself to trade by immersing myself in this kind of material, spending time with markets, imagining my decision and perception of markets though the imagined lens of great traders, trying on different styles to see if they fit me and then creating my own synthesized flavor of the truisms.

Working on my issues with the Trading Tribe has been an accelerant to the process.

Lastly, at the workshop you presented a grid of examples of control model compared to intimacy model. One example is: Laws / Customs

Would you be willing to make that document available on the resources page?

Thank you for receiving this.

NYC tribe meets on Tuesday at 7pm.

All but three members are absent from tonight's week's meeting. One of the members excuses himself to tend to a family matter at home before check in, leaving one other member and myself.

We wait to see if anyone else will show up and begin discussing our trading methodologies and system development in continuation of an earlier collaboration.

Soon (Tribe member) takes initiative and shows me a few very simple and remarkably effective systems he is working on. The curves look great! The code is very efficient, only a few lines captures all the rules.

I'm wondering "that's it?", " how is that possible?".

(Tribe member) methodically and carefully considers a small number of "exceptionally simple" rules that work consistently well over a long period. (Tribe member) expresses confidence in the robustness of the approaches. He likes the simplicity and sees it as a positive attribute that instills confidence. On the flip side, he also worries that the system simplicity exposes him to deep and prolonged drawdowns. Each trade has unspecified risk.

I'm amazed the systems back-test as well as they do absent controls to clearly define absolute max risk.

I feel intrigued and want to dig in to see if there are some faulty assumptions regarding liquidity/fills, commissions or other hidden risks.

Before long, we are coding away on laptops, testing and sharing observations. We enjoy our collaboration and time passes very quickly.

Our complementary processes yield surprising insights about our individual process differences and strengths.​

As we collaborate, feelings come up for me that I express as basic sounds and then as words while looking at his code:

<bahh> it feels like nausea and the perfect time to get short . "Why not wait until it's strong? "

"I would never buy on weakness in the timeframe that I use to determine the dominant trend"

<uuughsfs> It feels like impatience, coercion and time to do something else.

"The pattern you use to enter trades seems to work poorly in low volatility contexts".

My feelings seem to mirror his, I'm giving them expression, channeling them as I process and imagine trading his systems.

We go on like this for with while, IT'S ALMOST LIKE HOT SEAT + CODING SESSION.

(Tribe member) and I are like alternating sender/receiver. I step outside of the feelings to make suggestions of approaches and rules he might consider.

We implement my code approximation of what I would typically do (when trading well) in the various "strong feeling" scenarios. Many of my proposed rules add significant value and limited added complexity.
(Tribe member) seems surprised that my development insights seem so rooted to intuition/gut feel about what I'm looking at in his code and on the charts.

We combine our ideas and find that the result improves upon the independent rule sets quite a lot. The system backtest for our joint effort trades more efficiently, with improved accuracy, a larger average profit, smaller average loss, allows for a clear definition of risk and yields far better CAGR/MAXDD.

I'm happy to discover that it can be easy to access this experience and that others may benefit from the insights as well.

(Tribe member) is happy to have a different point of view and a tenable approach for solving some of the problems he has with his system.

We conclude our meeting and thank each other for sharing ideas and for the pleasure of collaboration.

Reflecting on our meeting, I notice that (Tribe member) helps me to appreciate I have a mental library of domain expertise that I take for granted.

It is essentially a large pattern recognition resource in that I automatically utilize when trading or when reviewing someone else's trading ideas. By working with someone else, I get to learn how to engage it in system development.

I am receiving the support and collaboration I want​. This realization feels really good.

I notice "It's our intention to work on our system development together". I see that this is my stated plan from a previous FAQ check-in.

I remember that I formally envision my office to serving as "home base" and a meeting place for our Tribe. It is where we meet and it is an "open studio" to Tribe members during the day. Tribe members are welcome to work on systems as colleagues, trade in a supportive environment, discuss ideas and enjoy good lunch company any time.

- - - - -

The next day the member that leaves early (Name) asks to join me at my office. We discuss trading and review our thoughts about a methodology he uses. We also discuss feelings and various recurring themes that (Name) recognizes in his behaviors.

He tells me a bit about a family drama involving an employee, a bank account and some tension regarding the employee not doing the job as directed. While he tells the story he seems amused and irritated at the same time.​ He makes some excuses for the employee and remains a bit irritated as his voice trails off.

We move to sit at desks each working independently with occasional conversation as we work. I reach a good stopping point in my tasks and move to sit next to (Name). He has some charts up on his screen and makes a dismissive gesture at them, as if to shoo them away like a nuisance.

The conversation moves to (Name's) trading and his "self sabotage".
One of his positions is showing him a loss.

I suggest to (Name) that we can examine what we do to get in the way of our trading methodologies if he would like to. I listen to (Name) tell me he does not like to be wrong and does not like to have or take losses. I recall some of the issues he works on in previous hot seats and sense they are connected to the stories he is telling me and to the way he feels about his trading.

I ask him if he would be willing to imagine if he might have an easier time exiting a losing trade if he considered the trade an employee and the stop loss their allocated budget for completing a task. ​

He smiles, says yes and seems curious. I ask him: "If someone works for you and they don't do what they've been paid to do, do you fire them, hire someone else or make an excuse?"

I ask him what it might feel like to trade in a way where being right, right now, is not really all that critical at all and if the trade does not do the job,it gets "fired" (stopped out).

He thinks about it and seems a bit invigorated. He says he likes the idea and the way it feels. In a moment he slumps a bit.

I ask him if he allows people to take advantage of him at some point in his life. He says yes, he does, as a boy and young man he has a speech impediment, feels ashamed and has a hard time standing up for himself.
He sees the connection to not standing up for himself and not taking a loss.

​(Name) and I resume our day's work independently then head out for a great lunch. At the end of the day (Name) thanks me for sharing my space and for sharing my thoughts. I thank him for joining me and for sharing his thoughts and process with me.

I notice that I have intimacy even outside of my family and Tribe meetings. A day at "work" has become an opportunity to have intimacy and support a friend.

Drama is subsiding in all parts of my life, especially in my thoughts and internal sense of self.

The non-Tribe and non-trading work is becoming easier to just complete. I frequently notice my feelings and my mood. My mood continues to oscillate, often reaching an extreme but the peaks and valleys are sharper and not as difficult.

I spend more and more time near the mean which is a steadily improving good mood and sense of wellbeing.

I'm aware that I am quickly developing processes to feel and accomplish things I had previously depended on medicinal processes to mask or facilitate respectively. There is no residue of regret. Anxiety and feelings that I won't satisfy everyone or that I will disappoint my family are coming up more easily. I'm willing to experience them when they arise.

Where I have typically feared and avoided the feeling of disappointing others and struggled to avoid feeing fears of looming catastrophe in the quiet moments, now I let the feelings come up and I just experience them. I also share them with my wife and my Tribe. The result is that I more easily seek and achieve resolution to previously difficult problems. I realize that my feelings are the most powerful force acting upon my life.

I'm happy to report that I also find a clearer pathway to trading as my livelihood and wind down emotional positions in medicinal activities, relationships and habits that are incongruent with what I want. I get out of my own way. People like me and help me.

My relationships start to reflect my snapshot of "Great trader. Great Artist" and tell me "You are a great trader", " You have a gift of creativity and intuition".

I tell myself "This what you love. Do more of that. Go for it.".

Thank you.

As I was thinking about the coming Thanksgiving - I started thinking who am I most thankful to in the past year. Immediately your picture came to mind. So I wanted to write you a note to say a BIG THANK YOU. I looked at my portfolio performance since May, which is the time I made changes to my portfolio after coming back from the Breathwork workshop.

It is up close to 30% since then.

I have never had a double digit return on my portfolio since I started trading, so to see such a big jump is hard for me to believe. Needless to say I am very thankful for the results so far.

Hope you have a wonderful thanksgiving. I hope to visit you sometime in Puerto Rico in your next Workshop.

Kind Regards

So I offer this question to you and me as it may help either of our trading experiences!!

if I use a standard trend following model on the Argentine stock market I most likely would have been "fully loaded".

Soaring Stocks