Ed's FAQ Nov 21-30, 2016

Contributors Say

Ed Says

Nov 29, 2016

Sinuses Open Up

Ed,

I have an argument with my wife this past weekend. It's our second big blowup since our new baby arrives. In both cases something triggers me to go on the defensive, get loud and say mean things. In both cases my wife is holding our new baby.

I take some time to reflect and think after we argue. I see I do not receive my wife's feelings and instead revert back to control. I realize I feel anger at my mother, my wife and myself. I feel anger at not having a safe place to express myself after an incident of sexual abuse.

I remember shutting down and not sharing my feelings to spare my mother's feelings about the abuse. I feel shame and hurt. I feel anger at not expressing all my feelings surrounding past infidelity for fear of upsetting my wife and to a degree because I cheat first and feel my feelings are not worthy. I feel anger and sadness at a new awareness of the self-blame for the sexual abuse against me. I feel a relief as I write this knowing I've carried that since age 6.

This is the first time I put all these thoughts together and their accompanying feelings. Shortly after my sinuses open up and I can smell for the first time in 3+ years. I feel very happy about having all five of of my senses again.

Thank you.

Thank you for sharing your process.

Nov 23, 2016

SVO-p Re-Write

Dear Ed,

Thank you for your reply.

I have a question on volume and its effect on my system’s performance.

My system trades liquid markets only. I consider markets ‘liquid’ that have much larger volume than the number of contracts that my system can trade. I determine liquidity by an algorithm.

My backtests show different results when I apply this volume filter algorithm. This is the result of skipping trades that take place on low volume weeks.

I do not know the future volume of markets in advance. So I do not know their future effect on my system.

How can I cope with the uncertainty of future volume and its effect on my system’s profitability?

Best regards,

Thank you for raising the issue of coping with uncertainty about volume - and for doing so with SVOP-p syntax.

You can cope with uncertainty externally the same way you cope with it in your model, namely: you can skip trades that present low volume and open interest.

You can cope with it internally by taking your feelings about <uncertainty> to Tribe.

You might also consider eliminating forms of the verb "to be" from your writing, eg. "This is the result" ==> "This results from".

Nov 23, 2016

Volume and Back Testing, SVO-p

Dear Ed,

Thank you for your reply.

I have a question on volume and its effect on my system’s performance.

My system trades liquid markets only. I consider markets ‘liquid’ that have much larger volume than the number of contracts that my system can trade. I determine liquidity by an algorithm.

My backtests show different results when I apply this volume filter algorithm. This is the result of skipping trades that take place on low volume weeks.

I do not know the future volume of markets in advance. So I do not know their future effect on my system.

How can I cope with the uncertainty of future volume and its effect on my system’s profitability?

Best regards,

Thank you for raising this issue and for clarifying your language.

To cope with something means to deal effectively with something.

Uncertainty has to do with your feelings about an expectation. Thus, you can cope with uncertainty internally, say in Tribe.

Profitability has to do with a financial result you get. You cannot cope with, change or alter an immutable result; you can, however, cope with your feelings about it, say with the help of your Tribe.

You might consider taking your feelings about <uncertainty> and <profitability> to Tribe as entry points.

Nov 22, 2016

System Still Working

Ed:

I back here say thanks to you ; My system work for many years ; really appreciate your wisdom !

Best Regards!

Thank you for acknowledging me and the work.

Nov 22, 2016

The Old Ways

Ed,

What is so different now than before that an outstanding trader is not able to make money the old ways?

Thank you for raising this issue.

I wonder what you mean by "the old ways."

The "old ways" I know about include trading with the trend, cutting losses, managing risk and having winning and losing streaks.

In this regard, I see little difference between now and then.

Nov 21, 2016

Volume and Back Testing

Dear Ed,

Thank you for your previous replies, again.

As I have been going forward with back testing, I came across a question regarding historical volume.

I gave my system a parameter that ensures that only liquid markets are traded. In practice this means that the historical volume should exceed the historically predetermined lot that the system generates to trade by a discretionary parameter value.

However, this way I put myself back to the past with my starting capital. As a consequence a theoretical equity would or would not allow to open positions in a given markets in the past, influencing the Bliss function of the system (especially in case of longer term backtests of 40+ years). Historical volume-to-equity ratios are relative contrary to the entry/exit signals for example, which are absolute.

Since no one can know the future volume of any market, how one can cope with this issue? Ignoring liquidity or acknowledging and accepting the uncertainty of future volume and its effect on the system’s profitability? Any other suggestion?

Best regards,

p.s.: Glad your site is back on track.

Thank you for reaching out to me.

Yes, I have a suggestion for your consideration.

1. re-write your email in SVO-p (S-ubject, V-erb, O-bject - present tense)
2. re-send it to FAQ.

You might find you can simplify your issue by simplifying your language.

Nov 21, 2016

Tribe Report:
Working with a Control-Centric Client

Ed,

We start the meeting and have an agreement to support the Hotseat. The Hotseat is unaware of the forms he is presenting. His thumbs turn up. He brings a detailed listing of things he wants to work on along with a concomitant batch of forms. He is ready and prepared, or so he thinks.

He presents both the list and the forms. I manage the process and notice the pattern of the Hotseat starting to go into an intimacy-centric state and then quickly transitioning into a control-centric state.

He uses a canned list of forms that I quickly recognize as a means to avoid intimacy and avoid going into a process. It has the appearance of a process, but it really is just a bunch of forms that the Hotseat successfully employs as a head fake to avoid actually working on the form that is required for completion — it’s a blind spot, nothing more or less. It is, however, an extremely effective one.

We go through several cycles of willingness testing with the Hotseat as he continually lapses into the control the process. Below is a sampling of the dialog that we continue cycling until the Hotseat expresses willingness and continues the process with intimacy.

Process Manager: I notice your thumbs turning up. I wonder if you’re willing to turn your thumbs up.

Hotseat: OK, if you want me to turn my thumbs up, I will.

Process Manager: I’m OK if you don’t turn your thumbs up. I’m wondering if you are willing to do it.

Hotseat: I came here agreeing to work. I’m willing to do whatever you tell me to do.

Process Manager: (I notice this is a subtle attempt from the Hotseat go into a control-centric pattern as this is a request for me to tell him what to do—to control him.) I notice your thumbs turn up. I wonder if you’re willing to feel that form.

The Hotseat goes into the form of turning up his thumbs and discovers the critical incident. Rather than utilizing the traditional rocks method, as process manager, I decide to go straight into the scenario and have the role players of the parents and teacher provide the Hotseat with relentless support. I notice a substantial wave of emotion when the father provides deeply caring support and a commitment for sustained support.

We then go through a couple more rounds of Process Manager / Hotseat willingness testing. I kept responding with “I don’t know what to do. I wonder if you’re willing to explore this scenario…” The Hotseat continues to offer me, the Process Manager, entrance into a control-centric relationship. I continue to decline the offer and then counteroffer with an entrance into an intimacy-centric relationship.

Once the Hotseat expresses willingness, I solicit the assistance of additional Tribe members to role play in a classroom setting. The Hotseat has some breakthroughs in the classroom scenario. The role players are all fully engaged in an intimacy-centric activity that is both competitive and supportive and in the now. We get completion on that process and checkout.

The Hotseat looks at his list, acknowledges that most of the stuff on the list is taken care of. He offers up one item on the list for consideration that we may not have covered, and I point to the success that he experiences in pursuing his passion for music. The Hotseat expresses agreement that his relationship with music is intimacy-centric. He experiences success with his relationship with music.

Meeting adjourned. Sort of …

The Meta-Process:
The Hotseat’s meta-process reveals itself in the Hotseat / Process Manager’s interactions throughout the meeting. The Hotseat continual offers an entrance into a control-centric relationship; and the Process Manager continual declines acceptance to that offer and counteroffers with an entrance into an intimacy-centric relationship.

The Hotseat now reports success in ending control-centric relationships as well as recognizing the difference in offers of entrance into intimacy-centric relationships and offers of entrance into control-centric relationships. He sees both offers with increasing clarity and now knows which ones to avoid and which ones to accept.

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

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