Ed's FAQ Mar 01-31, 2017

Contributors Say

Ed Says

Mar 28, 2017

Wants to Join

Dear Sir,

I would like to attain membership of your forum for interacting and sharing information on forex trading.

Kindly oblige.

Thanks & regards,

Thank you for applying for membership.

You may attain "membership" for free; to see how it all works, you can read through these FAQ pages - and also visit the rest of the site.

Mar 27, 2017

Up 450%

Dear Ed,

I don’t know how to start saying thanks.., for "all" the knowledge you share with the "young traders", personally for me to have access to all your insights, gave me the possibility to change my performance... Basically I get in the Investment Industry, post MBA and I have been for 4 years losing ALL THE money (basically focus in fundamentals..)and from march 2016 to today I have made 450%, but more important than that, I start to learn how to lose and get away my ego from the game.

I still have problem with (cut your losses and ride your winners), but I am working hard on that issue, "Really doing my homework / Basically studying for two years all the available books of trading"

I hope in 2018 I would be able to pay a "private consulting" to speak of trading/life.

Thanks again for share your knowledge

Best Regards,

Thank you for sharing your process and for acknowledging the work.

Mar 27, 2017

System Development

Ed,

I have recently read Jack Schwager's book regarding your trading style and found it inspirational.

I have traded for a number of years for institutional asset managers , but have also spent the last 7 years developing my own systematic trading model I hope to use on my own account.

After such a long time developing and finessing my system , I believe it your interview acted as a light bulb moment for me in a number of ways. Firstly your comments regarding emotion in trading ring so true, I believe that for myself and most traders a systematic model which removes the possibility to act out of fear, greed, anger, embarrassment etc give you the best chance.

importantly your comments also made me go back and look from a different perspective, I.e to focus on losses first and foremost. By focusing on cutting losses early my results have improved tremendously to appoint where my model has changed from an average one to a potentially good one.

I now only look at the ratio of my losses versus wins, and forget about the percentage of win ratios. By only winning 50 percent of my trades (455 trades so far) , but cutting my losses earlier and running winners longer my overall results have benefitted greatly and I am excited about the future for my model. Anyway, sorry to ramble on sir! I just wanted to reach out to say thank you very much and I hope you are well.

Thank you for sharing your process.

In general, a system does not remove your emotions from trading; it may, however, shift your emotional triggers from the behavior of individual instruments to the behavior of the overall system of instruments.

Mar 27, 2017

Bespoke

Hi there,

I am currently working with a great company. I noticed your site has published a very interesting articleEd's FAQ June 01-10, 2013which is why I think a collaboration between us could work well..

We would like to feature a bespoke piece of content on your site, which we think would be of great interest to you and your audience. For the privilege of being featured on your site, we would be happy to offer you a fee of $50.

We hope to hear back from you soon.

Kind Regards,

Thank you for raising this issue.

I do not host advertising on this site.

Mar 26, 2017

Check-In

Hi Ed,

I hope all is well for you.

Thanks,

Thank you for checking in on me.

Mar 25, 2017

Aloha

Aloha Ed,

I would love to learn about day trading to order to help bring in the funds for the charity that we work with, that is based on inspiration, purpose thru the performing arts.

Any thoughts around this vision from your side are most welcome.

Thank you for raising this issue.

You might reconsider using day trading as a source of funds for your charity - unless you can afford to say aloha to your capital base.

Mar 23, 2017

Simulation

Hi Ed,

I found this systems simulation sandbox and thought you might like to play with it.

http://ncase.me/loopy/

Thank you for sending me the link.

The app seems to support the feedback view of dynamics.

If you wish to gain familiarity with the basic dynamic modes, such as exponential growth and decay and damped oscillation, you might also have to include the formality of levels and rates in your model structure.

Mar 23, 2017

No Longer Selling Trading System

Hello

I have sold a trading system online since 1999

Here are some of my observations and the reason i am quitting it.

1) People won't pay for the system. A couple hundred dollars is ok but once you ask for more...no way.

2) People cannot follow your system.

3) Most people really shouldn't bother trading.

4) Since 2008..the interest in trading from the public has fallen off a cliff.

5) People want to be sold a dream. They want to make millions, fast, no risk, easy...as soon as you give them reality they lose interest.

6) You get to deal with some really nasty / trolling people. "if it is so good why sell it..." Liars, cheats, wingers....it's no way to run a business.

Well, it was an education...i wouldn't wish it on anyone

Thanks

Thank you for sharing your process and your observations.

Mar 22, 2017

Nine in a Row

Hi Ed,

When you have time to think a bit would let me know when was the last time you saw a market starting from a low and up for 9 consecutive trading days on close?

Any related markets towards this would be of interest to me.

Thanks again and hope you are doing well.

Thank you for raising this issue.

I suppose that a market that goes up nine consecutive days would, in retrospect, have to start from a low.

I do not know of any system studies using the N-Days-In-A-Row rule.

Mar 21, 2017

Lizard on a Rock

Ed,

You might enjoy this:

http://i.imgur.com/hldiOJk.gifv

best regards,

Thank you for sending me the link.

Mar 20, 2017

Wants to Sell, Reliably

Ed,

I'm a private investor/student and a huge fan of trend following strategies. I'm hoping you might assist with reliable ways of shorting the market? I'm currently using an advance-decline (NYAD) divergence with the broad market (S&P 500) which seems to work well for S&P 500 correlated markets. I've also tried long term moving averages to determine whether I go short or not (don't like this as much but not sure what else to use for things like GLD, SLV, etc).

I find it difficult to trade 50-100 markets so I've narrowed my portfolio to a few and I'm attaching my performance sheet for Russell 2000. This uses my NYAD/S&P 500 divergence calculation for shorting. I would love any suggestions you might have on shorting beyond the two I've mentioned. Thanks so much for all your work!

Thank you for raising this issue.

Risk has to do with exposure to danger; reliability has to do with consistency and dependability.

You might consider taking your feelings about <wanting something reliable> to Tribe as an entry point.

Mar 18, 2017

Tribe Meeting Report

Ed,

I drive the wrong way to Ed’s home. When I realize my error I call to state I may be late but am in route. I feel dread, my heart is pounding and I am frantic with the idea I may be late. I find a place to do a U turn and speed, risking a ticket.

The group assembles on couches and chairs in Ed’s living room after drums and beaters are chosen. We begin to beat the drums loudly signaling the start of the meeting and leaving the regular world behind, a bridge so to speak to openness and connection.

Ed directs the check in process and states focus is to be how feeling right now. Some people check in with feelings and some with forms. He reminds those who begin to tell stories or problems that is for the next round. I check in stating my heart is pounding and neck feels stiff.

On the next round we hear what are the current issues in each others life. The issues are as stated in the applications posted in FAQs. I note that they are similar focus on losing weight and wanting Improved relationships with people (ie spouses, mates, friends or work relationships).

Ed asks for who wants a hot seat… and we begin with a shoe lace that is out of place. It is never about what is on the surface. A father sees his sons shoes strewn on the floor, not where they should be and laces untied and frayed ends… as he states his issue he becomes extremely angry, the forms are intensified, and he is encouraged to ramp it up and go deeper.

A tribe member role plays his son and takes off his shoes putting them towards the center of the room. They readjust the laces until the Tribe member feels it is right. His face is red and he is yelling at his “son”. The son responds he is OK with his shoes untied. The hot seat is getting angrier that it is out of place… ramps it up more…”out of place.”

He is asked to freeze at the feeling and remember when he felt like that before earlier in his life. He states his friends are waiting for him to come outside to play and his father wants him to clean up his room first. The memory is reenacted with a Tribe member playing his father and 3 friends playing ball.

I played one of the brothers. We began tossing an imaginary ball and it evolved into a game of keep away from one brother naturally . It comes down to the “son” doesn’t know what the rules are, what are the agreements for keeping the room clean enabling him to go play.

The “father” is inconsistent at times letting him go and other times not. The scene is replayed next with the father helping the son clean up the room so he can go outside to play. They agree to do other things together. The feeling is so different… it changes from nagging, berating and heavy to one of bonding, guidance and lightness.

March 18th Update

I re-read my original page back in August and wrote this partial meeting report above the same evening. The first one seemed like a to do laundry list did not have the feelings from the meeting. As always the hot seat is a learning process for all who attend Trading Tribe meetings. I left that meeting with the focus of treating and loving myself better. I believe I am doing that --- I focus more on health than losing weight. I focus on financial balance of saving for land purchase and getting taxes and debt paid off. I focus on balance of work and play. I focus on appreciating the people in my life.

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

Mar 18, 2017

Wants to Know the Best Parameters

Dear Ed,

First and foremost, I want to say that I really appreciate all that you do and the time you take to help people succeed in their trading. I have also read most of the literature and interviews of you that are found in books and other resources. Thank you so very much for everything!

I have some questions that I've been wanting to ask you:

1. What are the best types of moving averages to use on a daily chart on the S&P 500, and what duration the moving averages should be aside from the commonly used 50-day and 200-day lines?

2. What are the best technical indicators that you've found to be very useful and accurate in finding trends on the S&P 500?

Thank you very much for taking the time to consider my questions. My deepest thanks and gratitude!

Sincerely,

Thank you for raising this issue.

You might consider taking your feelings about <relying on authority> to Tribe as an entry point.

You might also consider running some back tests to determine what parameters suit you.

Mar 18, 2017

Not Trading

Ed,

Too much fear, not enough greed

Thank you for sharing your process.

Mar 17, 2017

Vague

Hi Ed,

I've been learning to trade for a year and have drawn much inspiration from you since reading the book "Trend Following" by Michael Covel and listening to some interviews you have been part of alongside looking through your website.

I want to develop my statistical thinking to apply to trading. My knowledge of statistics is pretty basic and I'm struggling with where to begin!

How would you recommend that I begin? If this question is too vague please feel free to question me further.

Thank you for taking this time to read through this, I appreciate it. You have already helped so much with my development. Kind Regards

Thank you for reaching out to me.

I wonder what you might like to accomplish.

Mar 15, 2017

Mean Reversion

Hi Ed,

Appreciate your precious time and I have always been an admirer of your work and studies.

I am a believer of mean reversion however, when we have long periods of divergence to the mean (currently).

What would be your advice / thoughts on how best to manage? I have no issues with patience, discipline or position size.

Thank you for raising this issue.

I gather you believe in the inexorability of processes returning to their mean values.

I might guess you weigh about 175 pounds now and about 9 pounds at birth.

I wonder how you plan to capitalize on the inexorable return of your weight to its mean value of around 92 pounds.

Mar 15, 2017

Feynman on Pseudo-Science

Ed,

I found this clip of Richard Feynman talking about pseudoscience -- how he "knows" it's pseudoscience reminds me of how you pushed me to be more thorough in my system development.

I hope all is going well with you...

https://youtu.be/tWr39Q9vBgo

Thank you for sharing your process and for sending me the link.

Mar 14, 2017

Prison Break

Hey Dear Ed,

You might consider watching Prison Break (https://en.wikipedia.org/wiki/Prison_Break), if you have not yet done so.

It's Super.

Somehow I feel you will love it.

Thank you for sending me your recommendation.

Mar 14, 2017

Good Parenting

Dear Ed,

I remember you many times (it's practical and useful) but do not send you emails every time (it's not practical).

I fondly remember you mentioning about Toxic Parents book.

Can we get some good books reco for becoming best parents?

My daughter is pursuing MBA and will be away for two years. I feel emotional about this whole thing. How do I prepare myself for this? Your views or thoughts will be highly appreciated in the non existent moment of future.

Loving Hugs to you.

Thank you for raising this issue.

According to the feedback I get from parents here on FAQ, best practices include sharing the Heart Rock.

Mar 11, 2017

Vacation

Dear Ed:

I see that there is no update on Trading Tribe messages since middle of Jan 2017. I am hoping that everything is alright and you are on some kind of super extended vacation.

Regards,

Thank you for checking in on me.

Mar 10, 2017

Gloves and Mittens

Ed,

Regarding gloves and mittens, from FAQ Jan 12, 2007.

I have attached my chart of a glove fit.

I like the way the many ridges flow across the inversion where they become trenches as deep as the ridges are high.

Best,

Thank you for sending me your chart.

Mar 10, 2017

Finding Errors

Ed,

A couple of weeks ago you find an error in the disclosure section of one of my articles. The lack of attention to detail on my part annoys me. So, I set out to practice finding small errors in things I read and observe. I decide to read over some old FAQ and I find one, so I'd like to bring it to your attention. [Feb 9, 2011]

Thanks for bringing up feelings of making silly mistakes and helping me re-focus my attention to detail.

Thank you for sharing your process and for pointing out a typo in FAQ.

I wonder how you happen to find that error; I might like to implement your technology.

Mar 7, 2017

Wants to Trade

Dear Mr Ed,

By way of introduction, I am a big fan of yours and I discovered your through the basic books, Market Wizards, and also Trend Following.

As you said in these books, unless one has mastered the literature and spent some time with a top trader, might as well trade in the supermarket.

I do agree with that, and I have 2 degrees in Finance, but find looking back at the markets to 2008 trend following is the only method that could have made me some money.

I do want to win in the markets, and I have a younger brother with autism, and I want to wim to safeguard his future, as taking care of him, and implementing a methodology that can improve his condition does need some extra money.

I'm not sure how and if you coach student traders nowadays, but I am prepared to fly down and use my annual holiday to learn from you.

I live in Dubai with my family and am a ACCA (Chartered Accountant) and work for the UAE government (I am a UK citizen, of Bangladesh origin)

I also have an MSc in Finance from London Business School. But I wish I had discovered the book Market Wizards and trend following before I enrolled in Business School.

I hope to hear from you

Kind Regards

Thank you for reaching out to me.

I wonder if you can tell me what you want to accomplish.

Mar 4, 2017

Charts Don't Update

Hi Ed:

The website didn't update for yesterday.

Is there any way you can update one of the mirrors for the 2nd and the other for the 3rd of March tonight?

- - -

I hope you are doing well, the website appears to be stuck on 01MAR2017.

Please help! I love know what you think is strong v. weak.

Thank you!

Thank you for sending me the heads up.

Mar 2, 2017

Math Joke

Ed,

You might like this joke.

مضحك جدا

Mar 2, 2017

Wants to Trade

Hello Ed Seykota,

I am from San Francisco, currently studying at San Jose State University. I am sending this email out to you regarding any advice you could provide me in entering the business of trading.

Over the past few years of my college career I have grown a deep fascination about the financial markets.

Later a family member who have just recently read about the futures market told me he was going to open a brokerage account and give it a shot.

He introduced me to what he was doing and I was determined to learn how to trade. I devoted all my time to reading different books about trading, researching the markets and patterns of how the markets move, as well as listening to interviews with various traders around the world.

I first heard about you through a book I noticed that was recommended by many traders whom I've read about, Market Wizards by Jack D. Schwager. Your trading philosophy and ability to succeed through being self taught has really motivated and inspired me.

Throughout the past year I have managed to save a little money while working as a teller at CitiBank. I managed to open a brokerage account with Dorman LLC using NinjaTrader Brokerage and decided to quit my job as a teller to pursue trading while going to school full time.

I developed my own take on a trading method involving the V-WAP indicator and volume of the markets. Though I have not found much success in my trading, I keep a journal of all the trades I take so I am able to go back and review my mistakes.

This has helped me tremendously in pinpointing the major mistakes I have made in the past. If possible it would be a honor to have the opportunity to speak with you over the phone.

Best Regards,

Thank you for reaching out to me.

I wonder if you can tell me what you want to accomplish.

Mar 1, 2017

Bernoulli Abuse

Hi Ed,

Hope all is well with you. I too see that Bernoulli abuse is rampant, although a little different abuse than what you mention. Specifically, it's being over-credited with its role in wing lift.

When I was becoming a pilot I wanted to intuitively understand how a wing works, and most traditional explanations don't quite satisfy.

Unfortunately not all pilots will make this extra effort to understand wings, and high school or college physics professors are usually even worse (regarding wings).

Perhaps you already well know what I will explain below, but as someone who wants to stop Bernoulli abuse, I think this an aspect you should be mentioning!

A quick google image search of wings reveals lots of textbook examples that are mostly wrong.

I do have some questions about your radial expansion theory and perhaps will try to punch some holes through it for the sake of good science, but will save those for another email.

Thanks for creating a good conversation piece!

Thank you for sharing your observations.

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