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Ed Seykota's FAQ
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Contributors Say Ed Says
Feb 26, 2018

Keep it Simple

Hello Ed,

I'm a big fan of your Whipsaw Song. It was both incredibly fun and useful (it improved my investing considerably). Can you really play banjo like that?

I was very impressed. Just incredible.

Besides that, I really appreciate your attitude towards life (trading included). It seems to me that you have an innate desire not to over complicate things, and the capacity to think deeply and multi dimensionally (which are coincidentally the two qualities I most like about myself too).

Anyway, thank you for being the person you are. You've improved my life just by acting as a role model.

Thank you for acknowledging me and the work.
Feb 26, 2018

Exceeds Wildest Expectations

Dear Ed,

Its been a few years, but I wanted to drop you a update email. The time we spent together has been enormously positive for my life.

Business success has exceeded my wildest expectations. I not only have enough money to do anything I want I have nearly unlimited free time. My trading business has gone from a start up to a established business with a competent management team.

My personal life is also at all time highs. My relationship with my wife has steadily improved toward amazing. Thanks to this my kids are expanding and prospering which brings me great joy.

My personal life has expanded as well and just like you said, I now have more friends then I can handle and have to make hard choices who to spend time with.

I wrote to thank you for the crucially important deep mind work that you helped me do which set my path toward where I am today.
Thank you for sharing your process, for reporting your results and for acknowledging me and TTP.

Congratulations for sticking with the system, riding out the ups and downs and coming out a winner.
Feb 22, 2018

Volatility-Normal Strength Ranking

Hi Ed:

As you read this, please know of my best wishes for you and yours. This is a follow up from your kind correspondence last April and May also follow up from our meeting in P.R.

I am currently developing a Long Only Futures Strategy on Day Time Frames using Double Smoothed EMA’s of Momentum.

I am working hard to get value from the VNS (Volatility-Normal Strength) Ranker and to reconcile your comments of “In the case of long-only trading. You have to find the strong stuff. “

When using VNS to screen for my Trend System, and taking into account Risk Measurements such as Sharpe, RRR, and Total Return to Maximum Drawdown, screening for Futures with the
Strongest VNS to put on the system yields the worst risk adjusted returns over the most recent 3 year period.

Please see attached spreadsheet on 36 different Futures Contracts.

So hence my continuing confusion of the “Strong Stuff”.

Is the “Strong Stuff” best found in the Mid Ranges of VNS to include slightly Negative Values as well? I think so.

Any light you would shed on my path is more than appreciated.

Thanks in advance for your guidance.

With Warmest Regards
Thank you for raising this issue.

You seem to have a lot of methods in your system, including VNS, Sharpe, RRR and Total Return to Drawdown.

With so much going on, your overall system might obscure the effect of your VNS ranker.

If you would like to study and refine your VNS ranking system, you might consider running it with one simple system.

You might also experiment with various ways to use your VNS to add and subtract
instruments from your portfolio.
Feb 22, 2018

Daily and Weekly Charts


Most of what I read refers to measurements associated with Daily Charts. 

If one were to use (say) a 20 day breakout with a 10 day exit, would it, in your view,  make any difference if one used Weekly Charts with a 4 week breakout and a 2 week exit? 

I prefer Weekly charts as they remove the daily “noise”. 

Thank you
Thank you for raising this issue.

I don't notice much difference between a 20-day system and a 4-week breakout system.

I notice both of these differing from a 100-day (20-week) breakout system.

Feb 22, 2018

TTP and Losing Weight

Dear Ed,

I read your FAQ (Sun, 3 Feb 2008, Subject "Weight Loss"), you mention that "My weight is currently around 205, down from 225 on Christmas Eve and from 235 all time high.

My height indicates a healthy weight for me at around 175 pounds, so I still have quite a way to go."

I'm curious about :(1) Do you make it and reach the weight goal 175 pounds now? (2) Is there any obvious weight back during your weight losing process? And how do you handle it?

I'm beginning weight gaining process, and I think it is not easy as weight loss. As you say "I am also dealing with various feelings that are surfacing since I am no longer medicating them with carbohydrates.", in my case, I might medicate feelings by avoiding eating enough foods.

Here follows my interesting finding and I would like to share with you (I never get this insight until I'm writing you email):
(1) Some people medicate feelings by eating, and some people medicate feelings by refusing to eat. They are both unwilling to face and accept their feelings, but through totally different ways.
(2) Same input (the feelings we are unwilling to face and accept), but different outputs (or different reactions).

This implies that it's hard for us to predict what's the output only based on the observation of input, if we ignore relative structures. Furthermore, because the structure (The policy we handle our feelings) itself is evolving and changing, it's almost impossible for us to make correct prediction.

Always, hope this email find you healthy and happy.
Thank you for sharing your process and insights.

I would like to host a 10-session Tribe series over a 6-month period, here in Austin, TX, dealing with health and weight.

We generally meet Thursday evenings from 5:00 to 11:00.  I envision a Tribe of between 6 and 8 members.  All agree to keeping track of metrics such as weight, exercise, eating habits and emotional issues plus anonymous body photos (concealing face).

If we develop some useful technology, and demonstrate it works, I'd like to make it available to others with health and weight issues.

If you have interest in attending, let me know.
Feb 21, 2018

Even More on Wind Management

Dear Ed

Thank you for your detailed response.

I appreciate you took the time to edit the comments and the brackets in the formula, so now I can understand it better.

I neglected to tell you that the blower mouth is 4 inches and not 12 as you guessed, the other point I did not tell you is that the farm would never get planning permission for a regular wind turbine as it is on the flight path to Duxford airport hence why I am designing something that does not have to be tall.

I think now that probably all my tests are invalid due to the huge difference between real wind and a 4 inch blower. So next will be some field tests with anemometer readings.

I remain slightly confused by your view that the funnel is not efficient as I proved in video 3 that I am getting 51% average wind speed increases by using a venturi.

This is video three with charts showing the actual anemometer readings and turbine speeds

Previously you said we use the blower area as one of the factors to compute efficiency which I understand, but when in the field with a 10 mph wind coming, then there is no "blower area" to replace what was used in the blower v funnel ratio calculations.

I think to measure wind speed at the funnel inlet and then the outlet is the correct method so if I get 20 mph out it from a 10 mph wind then it would be 200% efficient. I wonder what you think about that?

Your input is greatly appreciated.

Thank you  for setting up the experiments.

While you may find a higher air velocity at the exit than at the entry, you also may find less total energy at the exit.

This configuration might fit your particular requirements.

Feb 21, 2018

Bliss at 10.5

Hi Ed,

Thanks again for your reply. A couple of Tribe members have some familiarity with the rocks process, so I will discuss with them and see what happens.

I did look into trend following last year. I started with your trading system project and then went on to back test a few simple systems using python. I back tested over about 30 futures markets, using 40 years of historical data. (My bliss function was {average annual return / Worst draw down}).

I tried a few different things, like going long only when trading bonds and equity index futures to improve the bliss ratio. I found that the best systems seemed to come out around 2.0 bliss. I had a look at some of the best performing managed futures funds too, which had bliss ratios between 1.0 and 2.0.

Then I looked at my own bliss ratio for how I trade currently, and noticed it came out at 10.5 for the last couple of years, so I decided to stick with that. The strategy I use at the moment probably loses its potency past £10m of capital, so I guess I'll worry about that when I get there.

The exercise of examining trend following systems was very useful for me. By knowing that it works over the long term, I have widened my time horizon for trades and ride the trends for longer, using a moving average and a trailing daily stop for risk management.

Thank you for sharing your process and your results.

You might consider more than Bliss when evaluating systems.

For example, a savings account that pays 1/4% (.0025) per year and has no drawdown ever, has infinite Bliss, even in an inflationary environment in which the buying power of the account declines.
Feb 20, 2018

More on Missing Out

Thanks for your reply Ed,

I'm glad to hear that you may have enough interest to run a workshop in Texas. I would like to participate so count me in.

I would like to make friends with the feeling of missing out, but at the moment I do not like it. I find that the strong feelings I have about it are not live when I go to a Tribe meeting. So far I have used the feeling of missing out to prompt me to look more closely at the decisions I make that may lead me to missing out. These are:

    Taking large losses ---> loss of confidence for the next trade ---> miss out by being too afraid to pull the trigger.

    Not getting closure on mistakes quickly, spending time dwelling on past mistakes / missing out ---> missing the next trade

    General lack of preparation

    Lack of open mindedness / communication with others.

    Not trusting myself to pull the trigger when something unexpected happens.

My style of trading is primarily news driven (surprise news). I work in a team based environment where we collaborate on research  and share ideas about what the market may do in certain surprise news scenarios.

Thank you for sharing your process.

In TTP, we hold that all feelings have positive intentions.

You realize these intentions by viewing your feelings as allies and by experiencing them fully and then acting pro-actively to change your situation.

If you view your feelings negatively, you may act medicinally so as to knock them out, say, through drugs, alcohol, drama, distraction, meditation, therapy, will power, etc.

In the process, you may miss the opportunity to extract pro-active guidance from your feelings.

If you suppress thirst, you dehydrate; if you suppress hunger you starve; if you suppress the feeling of missing out, you wind up accumulating pressures that get you to miss out on some really big ones.

Fundamental analysis fits nicely with suppression of the feeling of missing out, since fundamentalists can miss a subtle trend and miss out on a major mover.

Trend followers do not miss big trends.  Trend following takes the drama out of catching trends - in exchange for having to tolerate whipsaws.

When you start listening to your feelings about missing out you might find you no longer have to set up missing-out drama for yourself - and you might also re-discover trend trading.

You might consider taking your feelings about <missing out> to a Tribe with experience in working the Rocks Process.
Feb 18, 2018

Curious Meditation

Dear Chief Seykota,

I am not sure if my mail will reach you. I am quite curious to read your book.

After having read so many cross references about you I am quite curious getting some wisdom from you.

In the past I had already some experience with mediation and self reflection, Especially I am contemplating to feel my feelings. Your approach coming from the trading area (a quite stressful area) and I would like to see if I can join both methods (buddhism mediation with your approach to get better alignment between fred and cw)

Thank you for sharing your process.
Feb 14, 2018

More on Managing Wind

Dear Ed

Thank you for your valuable input and for watching my video clip.

You were right to suggest I test the venturi effects on turbine speeds, so today I completed a set of sixteen tests which seems to conclusively prove that a venturi increases wind turbine speeds, this effect is more dramatic when low wind speeds are tested.

My results are contained within this video which I just uploaded.

It was interesting as they showed that a smaller venturi exit hole size is more effective with lower wind speeds, increases in hole size favour higher wind speeds.

As with usual research and development, the more I learn the more I realise that there is much more I don't know.

Tuning the weight of the turbine and the diameter and the width of the blades is going to be important to achieve good efficiency. I think that a flywheel affect found by using a heavy turbine would dampen the wild fluctuations of wind speed but may cause it not to start at all in a very gentle breeze.

Also if the diameter is small it will spin faster but will product less torque than a larger diameter turbine.  So there are trade offs which I observe to be highly correlated with those found if tuning a two stroke engine.

I had a vague idea to buy a petrol generator and work out its require running speed, then remove the petrol engine from it and connect the generator part to the turbine via a v-belt drive geared to suit which would then charge a Tesla type battery or provide direct power during winds.

As before, any comments you have would be welcomed

Thank you for sharing your process and for documenting your fluid-dynamic experiments.

You might consider measuring the overall efficiency of your funnel-concentrator system by computing the ratio of the power from the funnel to the power from the blower.

You can estimate stream power as the product of mass flux and velocity.

Since the two exhaust streams flow, by momentum, through ambient air, they have roughly equivalent densities.  

Thus, you can simplify the efficiency metric to the ratio of (Velocity^2 * Area) for the two streams:

Efficiency = (Vf^2 * Af) / (Vb^2 * Ab)

I guesstimate the funnel tip diameter at 2" and the blower exhaust diameter at 12".  

I gather from your measurements, you get a velocity increase of about 2x.  

Thus, the overall efficiency of your funnel-capture system comes out to about:
Efficiency = (2 * 2 * 2 * 2) / (12 * 12) = .11.

Thus you lose about 89% of your power by passing the air through your funnel-concentrator system.  

In practice, the power loss occurs mostly as leakage between the blower exhaust and the funnel wide-end entry point, as pressure builds up in the funnel and repels air from the blower.

You can remedy this by sealing the path between the blower and the funnel - with more duct tape, of course.  

Note: this may occasion an increase in the pressure in the funnel, risking funnel blowout and perhaps damage to your blower that aims to move air, not to compress it.

You can also increase energy conversion efficiency by losing the funnel altogether and putting a windmill directly in front of the blower exhaust.

So that brings us full circle to the original windmill as the best solution - and helps explain how come funnel-concentrator schemes fail to deliver.

You might consider taking your feelings about <getting something for nothing> to Tribe as an entry point.
Feb 14, 2018

London Tribe Report - Missing Out

Hi Ed,

A quick update on the London Tribe. It continues to grow and as a whole we find it is getting easier to get straight into feelings/ forms. We also spend less time analyzing and are more aware if/when we do fall into this trap.

I regularly make notes after each Tribe meeting.

After looking back at my notes I notice that the best sessions are when more experienced Tribe members (>5yrs) are present. I notice that they offer relentless validation to the sender so I make a point of stressing this in a recent Tribe meeting. The Tribe puts a lot more effort into validating the receiver and we have a really good session. The Tribe members on the hot seat seem to be much more present with feelings and spend little time talking or analyzing.

There are 4 of us that are interested in participating in a workshop in England. Obviously that doesn't meet your requirement for 12-18 (mentioned in your 'Workshop - In Spain' post), so I'm wondering if any others reading FAQ would consider joining a workshop in Europe?

Happy to organize if it gets the go ahead.

Late into 2017, unsatisfied with my progress as a trader, I hire a trading coach. He helps me to identify some of my dramas / weaknesses. In particular, my dramas related to 'missing out'. If I miss a trade (by being away on holiday for example) I can get so frustrated that this throws me into a downward spiral. I force trades to 'catch up' in what I have missed. I notice that I am most bothered about 'missing out' when I know that others have made money out of an opportunity that I have missed.

I also 'miss out' when I am in the office by not taking trades that others I work with have taken and have made money on. This again has set me off into a steep draw down.

Since identifying the above with my trading coach, I notice that when I notice myself 'missing out', by simply knowing that this is drama that comes up for me, the feelings I have about 'missing out' subside quicker. However, I seem to keep replaying the drama of missing out regardless.

This is a feeling I have tried to work on in TTP, but the drama is still here.

I think that this is the main stumbling block to my improvement as a trader. I wonder if you are available for personal consulting?

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

At this point, I may have enough interest to host a Workshop in Austin Texas.  

I estimate critical mass for a Workshop at around ten people, and I like at least twelve to eighteen.  I can handle up to around thirty-five.  Above that, I would prefer splitting it into two smaller Workshops.

I also conduct private consulting - for people who do not wish to attend a Workshop or Tribe meeting.

Meanwhile, you might consider taking your feelings about <missing out> to Tribe as an entry point.

Conventional therapy and some forms of coaching may take a feeling such as <missing out> and then aim to get you through it or over it or otherwise eliminate it.

In the process they may set the feeling up as something to eliminate and to judge negatively.

This can act to compound the situation - and also compromise an important part of your risk-control system.

In TTP we work to find the positive intentions of say, <missing out> and to make friends with the feeling and to implement pro-active responses on your emotional control panel.

You might also consider imagining the feeling of <missing out> on a case of blisters.

 Missing Out

might not always feel so bad
after all.

Feb 14, 2018

Realizes the Importance of Marketing

Hi Ed,

Here is the list of things I want to accomplish, under your guidance,  by the first year and the first five years.

The first year, I plan to finish a trading system which trades global commodity futures and stocks,  as a backbone trading program for a commodity fund/or hedge fund; Start marketing now and full time marketing after system online.

Target for end of year to raise 10M+ fund.

Trading system improvement: 2018
  Trading strategy research.
    Backtest trading strategies on two different platforms.
    Commodity fund Or hedgefund system, TBD.
  Trading strategy implement.
    Implementing backtested strategy into Trading program.

  Supporting system improvement:
     Account management: Priority 1
       Improve account management tool.
     Hot redundancy systems, Priority 1
       Deploy system into different geologic area, e.g. running systems in California, New York, Shanghai and Shenzhen
       to ensure non/minimal-stop operation when disaster happens.
     Alternative data vendor support. Priority 1
       Currently using CSIdata, need to develop additional data source module as backup vendor.

     Addtional Broker interface: Priority 0(Highest priority)
        Wedbush(CQG) API: Friend tells me Wedbush are more flexible for CTAs
        Haitong( CTP 1.0/2.0 ) API.

     Client communication system and Composite performance reporting automation.

Marketing: 2018

   Communication before system online, start now.
    Engaging potential clients:
     Make preliminary marketing documentation about the program.
     Informing investors system online ETA May, 2018, collect feedback information.
     Submit NFA disclosure for new program.  
    Additiontal marketing actions
     Build website.
     Register with Autumngold
     Attending investor event
   Visit Shanghai, Beijing , China
     Decide the business model, possible local business partner.
     Meeting investor friends. Present program.
     Visiting brokerage connections. Present program.
Five years milestones.
  . Develop system to trade more instruments, a hedge fund systems which may raise more fund than CTA.
  . Develop client communication systems to help investor to stay on board during drawdown period.
  . Continue relentless marketing to increase AUM constantly to 100M+
  . Continue trading system, and/or AI research, investigate new social financial trends.
  . Continuously sharpen self discipline skill. With your guidance, Build a lab exploring technology which may help enhance self discipline.
  . An experiment which we may do is, with your guidance and permission,  when capital increase, build a team, and apply Trading Tribe Process into many aspects of corporate operation, like managing business with  ISO2000 process. Be the first company to have a culture of TTP based discipline and rapport. Build cool people. |-)

The more I think about it,  the more I realize how important the marketing is. I feel urge wanting to meet people now.

Thank you for sharing your process and your wish list.
Feb 14, 2018

Essential Tribe Meeting

Hi Ed,

We have a Essential Tribe meeting tonight.  I tell my family I’m going to work with Ed on system design and build a fund. It’s a rewarding endeavor and it’s also very challenging. We strive to help lots of people to make money.

I want everybody to know how everybody else feels about this venture.

My son smiles and tells us he feels happy and excited.

My wife tells us that she feels happy that I finally move forward. She says she already start to call friends and tell them I’m going to have a investment program soon. She wants to find a fengshui master to bring bless to our first business endeavor.

My daughter says she is happy and she can buy a DS.

I thank every Essential Tribe member for their support and tell them I’m thrilled and also feel nervous. This is a rare opportunity and I want to stay disciplined and do my best. My recent success in office reminds me how important it is to be self disciplined in any business and relations. It’s lots of role plays in the Tribe meetings which keep me work hard and be nice to people.

I thank you again for your help and looking forward to a great journey with you.

All the best,
Thank you for sharing your process and for documenting your Tribe meeting.
Feb 13, 2018

Wants to Understand Inner Self


I have often thought about sending you an email about meeting, but it is about time that I execute on that desire so I am sending this email.

I live in [City] and can make a drive there one of the weekends. I understand that you provide priority face time if an amateur musician is part of the meeting. I have a pianist in home ( 8 years old, he needs to understand your work someday soon enough), but he is in [Country]  right now.

I want to understand my inner self much better than currently do and your methods are the most helpful.

Let me know if anything works for you.
I plan to offer another series of the Austin Tribe - for people familiar with TTP who want to take themselves and TTP to the next level.
Feb 13, 2018

More on High-Percentage Tips


That answer is nearly as bad as you’re singing.
Thank you for sharing your opinions.

You might consider taking your feelings about <trying to outguess the markets> to Tribe as an entry point.
Feb 13, 2018

Essential Tribe Support
see previous: Wants to Improve


Thank you for the kindness of tutoring me! I have tears in my eyes.

I have full support from my family. My son is growing up and he looks up to you. He trades stocks base on TT chart and made some good profit and also starts to help in system design. He is formal Tribe member now. 

I hold a essential Tribe meeting tonight and update with you.

I start to arrange my time around the schedule you suggests.

Have a great day Chief!
Thank you for sharing your process.

You might consider sending me a list what you wish to accomplish in the next year and in the next five years. Make it as specific as you can.
Feb 12, 2018

Wants to Generate Electricity

Dear Ed

I hope this email finds you well.

As you have a good knowledge of physics it seems you would be the right person to ask about the venturi part of my horizontal axis wind turbine design idea.

The key points to the design are as follows

1. To get electricity from wind without having an ugly turbine visible on my land.
2. Use of a venturi / tunnel to increase wind speed
3. Protect the turbine from self destruction with an automatic mechanism.
4. Use a shroud to hide the convex part of the turbine thus making it run faster

There is very little information available on venturis to increase wind speed so I was considering using a shape similar to the attached photo until I read a lot of bad press about how badly it worked.

According to Richard Feynman there are many things in physics which don't work the same when scaled up and down as the ratios are dynamic rather than constant. I remember him saying a plane can be made as big as you want it as the wings can carry a huge engine, but if you try to make a tiny plane then the wings wont be able to lift it due to the weight of the engine.

I have attached a photo of an underwater funnel to increase flow to a turbine as well and wonder if scaled dimensions would also be effective with wind?

This video shows a working model of my design including sketches of side and plan views.

Any input you can give regarding a good physical shape for the lead in and "exit building" to the turbine would be very useful.

Thanks in advance for your help.

Thank you for sharing your design.

Your design relies upon a funnel to somehow speed up the airflow to make it more potent in operating your turbine.

Air Flows

from blower (out of frame, right)
through long funnel (center)
and onto turbine (left).

clip from contributor video

You might test your speed-up hypothesis by holding a 6" piece of coat-hangar wire loosely between your fingers and dangling it in (1) the exhaust from the air blower and (2) the exhaust from the funnel.

According to your hypothesis, you get more velocity at point #2 than at point #1.  If you don't find experimental confirmation, you might consider re-thinking your hypothesis.

If you think you actually do detect an increase in velocity by running the flow through a funnel, you might consider upping the ante; you can further direct the flow from your funnel onward and through a small kitchen funnel.

Careful you don't get the air going so fast it blows your turbine over the fence and into the next county.
Feb 10, 2018

Wants High-Percentage Tips

Hi Ed,

Hope this finds you well,

Huge fan of yours, read a lot about you.

I’m very into trading and love you’re trend Style.

I’m a good trader but really would like to run my winners further.

I have varying styles of entry but majority are limit orders I guess I’m a bargain hunter.

From reading a lot on you’re methods I gather you use lots of stop entries so momentum is high at point of entry.

Any high percentage tips on that type of entry. I trade daily charts and hold for between 3 days and a month.
Thank you for sharing your process.

Trend followers don't generally try to predict the probability of success of trades before taking them.  

Fundamentalists specialize in this type of pre-guessing ritual.

High Percentage Tips

The shorter the pencil
and the longer the tips,
the higher the percentage tips.

Feb 09, 2018

Wants to Improve

Hi Ed,

I hope this email finds you well.

I am a little apprehensive to share with you my current situation.

Over the past few years, I have made some good investor friends both in US and back in China. They are willing to invest on me. I notice my TTP training helps me a lot on creating rapport with people and find the right match.

But I'm still trying to improve my system. I don’t like the MAR/bliss of my current system. I feel confident to be able to use it to make money in long term, (I’m trading all my family’s cash and 401K funds on my system) and it’s performing normal since this fully automated system online more than a year ago. I follow it with almost zero variation(except some software bugs in early days after it’s on line). Attached is the chart of some typical trades.  You can see it’s pretty long term strategy. But I feel uncomfortable to use it as a system to start fund raising, I believe it has room to improve. I have been working on it for years and not making significant improvements.

I realize now I do need external help more than ever.

Last time you invited me and Gang to come to do backtesting with your. I feel grateful and also feel embarrassed that I didn’t earn it myself. I really want to be your student on system trading. I want to do something for you so I feel better with my dignity. I have been thinking for more than a year that if you like, I want to pay you fees or/and sharing profit, whatever you want,  to help me on system design. But I feel afraid to mention this to you, wondering you might not usually tutor traders in such way, and afraid of that you might not like to work with me.

There are several things make me feel strongly wanting you help.

First, The other day I was talking to my wife and she says she supports me to go full time on system design for half a year so we can go back to normal life after I finish it. I told her  It is a dream for me to be your student on trading, but I am really afraid to annoy you by telling you about this if you don’t like to. Last time when I visit you and we went to several jams together,  I actually wanted to ask you about this but I'm afraid of rejection, also think that maybe it's better to wait till you know me more before I make the request. You have helped me a great deal in my TTP training and I’m really grateful for what you did for me. I feel embarrased I am asking more from you.

Also I am seeing a lot opportunities back in China, there are a lot people with capital and looking for investment. There’s not much other choice for investment back in China now due to current political and economic situation. It’s highly possible that my system, with the improvement from your help, can raise serious funds. I want to share profit with you and become your partner to explore China financial market. The connection and friends I have are either billionaires or top pool allocators, investors clubs, quite a few of them have been good friends not only with me, but also with my family. I am feeling extremely pressure since I have been keeping them waiting while attacking the system design issue on my own. I tried many times to write up email to you but stopped by fear of rejection.  I feel tired of making my friends waiting, and I will lose credibility if keep them waiting longer.

Another issue which is more imminent is my family, especially my children. During last 3 years I have been using a lot of time after work  on coding, the time which I should spend on my family, my children. I feel really sorry to them. And it’s taking toll on my children's happiness. I mention this to my wife and she starts to press me and urges me to full time finishing up current research. She give me half year to finish my design and so we can live again like a normal family. I feel grateful to her but I realize now I really need external help, the only source I can reach is you. My son is 15 and my daughter is 8, I want to spend more time with them and pass on to them what I learned from you about the TTP, to help them to  build right character, and train them the right way to work with their feelings. During this year, there has already been several incidents of my children which demonstrate the importance for me to raise them right, with the principle of TTP.

Currently I have to support my family by working part time consultant job and at same time spending time with kids, and conducting system design and managing live trading accounts. Thanks to the fully automated system V1.0 I have right now. I can barely keep up with such a busy life. For years I have only 5 hours for sleeping every day and I'm starting to feel out of steam now. I am worry about that if this situation last, it will damage every part of my life, together with my health. I want success in trading and fund management and my wife supports me to do so. I don't want to fail her  I really need to wrap up system design. 

The current system V1.0 I have now is a basic long term trend following system based on the SYS_SR with some simple heat management by monitoring core value. I use long term time constant. It’s a fully automatic system. After a year, the automation of order processing and position monitoring is more stable now. The execution of the system is almost zero variation, except some glitches due to software bugs in early stage. The equity curve of the system ran up a lot  then took a plunge last week, |-). Up to now it’s around break even level. I watch the positions with the system’s visual tools and it takes and stay with every long term trend. I believe in my system, but it might be over diversified.

Even though I believe my system can provide long term return,I don’t feel satisfactory on whether my system is in a good position in competition with other CTAs in the industry. I have been working hard on system V2.0, to improving bliss by backtesting ideas on portfolio selection, dynamic adjust rick budget,  adding some pattern recognition etc. but so far haven’t made significant different in terms of average bliss improvement.

I am not looking for a perfect system, but I know there’s a big room to improve for my current simple system because it’s too primitive. I need help to build a insdustry class trend system before I feel fully confident to start fund raising.

I acknowledge my feeling of wanting to wait for a perfect system before I start major effort of fundraising and decide to start marketing now. I want to do both things together, marketing and system research.

I understand that nobody knows that what kinds of systems the next decade will favor , especially at the AI era. Maybe we will get in a big bull era and simple trend system just does fine, and the V1.0 beats the V2.0. It’s possible. But for the moment of now, I know I need to retrofit my ship to be ready for as hard situation as possible.

The other reason I feel embarrassed to ask you help my system design is that I believe you already teach me the best system, TTP. By practicing TTP, I notice the changes in my character which direct me to seek different system than before. more slowly, more delicate on risk allocation. I know by continuing practice TTP and applying it on my system design, I can eventually come out with a pretty good system. But learning directly from you I can have more chance to hang out with you and learning your wisdom, it’s more fun. I start to feel you are like an elderly in my family
I would like your help to improve my current system to one  level up. Not necessary perfect. So I can wrap up the design and focus on TTP training and marketing.

I want to give back to you as much as I can if you want to help me. In addition to profit sharing , I want to wire you [amount] as first installment of the mentoring fee and you decide how much you want to help me. If you think I am worth more teaching, I want to pay you more.

You are the best trader and tutor in the world, and for me it’s unforgivable sin if I don’t work hard enough to become your student. I have been looking for my calling all my life and becoming the best trader is a burning desire inside me. Running a successful fund is the first potential TTP can help me to reach, and TTP can enable me to do more. The trading system and fund is to be my first creation, can I want to do more.  But for now I can’t make it without your help.

I was writing a bio  the other day, :

I love coding and designing all kinds of systems, from writing assembly boot code, to Linux kernel hack, to OOP and graphic UI. I enjoy bringing up boards,  debugging and solving problems. I also have passion on getting to know and work with new people,  to share feelings with people, to help others to get what they want and maintain rapport.   The purpose of my life is serving people, innovation and creation.

Without years of Tribe meetings and practice, I can’t reach such clarity about the purpose of my life. I feel really grateful of your help. Sorry I am not sure if I  give you too much pressure on asking for this. You can just toss the email if you don’t like it. I’ll feel sad, but I’ll be fine.

All the best,
Thank you for sharing your process.

You might consider taking your feelings about <improvement>, <rejection>, <embarrassment>, <children>, <wife> and <career> to Tribe as entry points.

If you want to work directly with me on system design, psychology and marketing, and if you already have some potential clients, I may can work with you on some kind of profit-sharing arrangement.

You might consider spending a week with me here in Austin, then three weeks at home; then repeat this four-week cycle until complete.

I suggest implementing the mathematical part of the system on two different platforms so as to cross check results and locate bugs and glitches.

You might consider meeting with your wife and kids to share your feelings about this project and to listen to their feelings - until everyone knows how everyone else feels.

I would like to know that you have your family supporting you on this venture.

La distancia nos impide un beso o un abrazo pero no debería imp'edir cLa distancia nos impide un beso o un abrazo pero no debería imp'edir comunicarnos.omunicarnos.
Feb 08, 2018

More on Wanting to Know Parameters


Thank you for taking the time reply to me.

I completely understand, and I commit to finding my own method that fits me.

All the best

Kind regards,
Thank you for sharing your process.
Feb 07, 2018

On Cutting Losses

Dear Ed,

I got in touch with you ...  because I vividly remember reading your chapter in the book Market Wizards. At the time I was at Ned Davis Research wasting my time trying to figure out why selling naked puts on October 16 1987, was a bad idea!

After many years in the business, I decided about 5 years ago to spend time building a systematic model to trade exclusively the SP500. I was able to build an underlying trend model that reminded me of what you said in the book. This model is just part of a larger single model that trades the SP500. You can see it on the website.

Hope you are well,

Green = Model Returns
Blue = Stock Prices

Thank you for sharing your process - and how you implement risk management.
Feb 07, 2018

More on FAQ Aggregation
(See Jan 01, 2018)

Hi Ed,

Regarding the FAQ aggregation project, I would like the finished product to be concise yet exhaustive.  Accordingly, I see five parts to the proposed document (but I’m flexible if you prefer another structure):

1.      Introduction: Brief comments by me (and you if you are so inclined) about the project.

2.      Overview of trend following: “Just the facts” about trend following with your comments from FAQ as the foundation (similar to the guide I sent but more robust and with a better structure).

3.      Q&A: Review of several commonly asked questions on FAQ with your answers (from FAQ and possibly some input from you provided I can’t find answers on FAQ and that you are willing).  I would include my interpretation of your responses as well (I have an example if you would like to see it).

4.      TTP overview: Overview of TTP, it’s importance, and a reference to the TTP book (and anything you might like to add).

5.      TSP example: Combine the website materials for specific examples and fill in the blanks.

As for the plan, I would complete one section at a time starting with a general outline then filling in the blanks and adjusting as the project progressed.  I could send you updates at regular intervals incorporating your feedback.  We could also share a Google (or similar) online document.

More specifically, I think #2 above should be written first.  Everything else should logically flow from that.  I will start working on an outline for #2 until I hear from you again.

As for a timeline, it will depend on your availability and input.

Regarding your response comment about “educational and non-profit use”, I’m not sure if you mean materials or links to other sites but I only plan to use things native to your site and would defer to you on what to do with a finished product.

Regarding “...very little in the way of instrument-specific trading advice”, I am aware.

Thank you,
Thank you for clarifying the description of your project.

I support you in writing your own book about trading - and you may use a quote, here and there, from me and from FAQ, with attribution.

If you plan to publish a book mainly about me, my teachings and things that appear in my books and websites, then you pretty much have to work with me to get it right - and to overcome copyright issues. That would require substantial editorial effort on my part.

Before you get too far into it, you might consider the market for such a book. particularly since I do not promote any get-rich-quick methods. Nor do I even suggest specific systems or parameters.

The closest I get to selling trading systems: I offer the Essentials Card, a wallet-size card with six trading maxims.  

I sell it for less than free to people who send me an envelope with a stamp, a dollar and their address.

I also sell it for $10 on line if you want me to handle the shipping business.  

I notice more people prefer to pay the $10.

Feb 07, 2018

Reminiscences of CC

Dear Ed,

I laugh-out-loud reading the story of your early days on Wall Street. (Wants Foot in Door, FAQ Jan 2 2018) Thank you for sharing.

I notice several systems dynamics stock-and-flow diagrams in an old Commodities Corporation brochure. (Perhaps their team is optimizing the best way to divide someone's birthday CAKE?) I wonder if the diagrams have anything to do with your appearance at CC.

Best Regards,
Thank you for making these connections.

The CC reliance on stock-and-flow diagrams (level-and-rate diagrams, back in the day) likely has little to do with me and lots to do with the senior management of the firm,  students of Jay Forrester at MIT.
Feb 07, 2018

Wants to Fix His Father

Hi Ed,

I dream my father is drowning and I try to save him but his life vest doesn't float. In real life he is struggling with putting money into the hotel business. He needs a strategic partnership with an investment of about one million dollars. I wonder if you could help him with a goals process and if you are willing to talk with him. I think you could help align his vision and intention.

Thank you for sharing your process.

You might consider taking your feelings about <having to fix your father> to Tribe as an entry point.
Feb 06, 2018

The Trading Tribe and Govopoly

Dear Ed,

I already buy your 2 books, The Trading Tribe and Govopoly:In the 39th Day, one from Amazon and one from your website.

I learn lots from these 2 books when I'm reading. Great journey! And thanks for your share.

Today I search The Trading Tribe on Google, wanting to find some reader responses to read. And I happen to see below picture.

Your writing is beautiful, especially your signature. So I decide to buy another book The Trading Tribe on your website, and my personal wish is that: would you please write a note to me and my girlfriend [Names]? Whatever you want to write to us, it is OK. But I prefer you can write some blessing to me and my girlfriend, I want to send the book and the note to her as a gift. BTW, we are planning to step into marriage soon. And I'm excited, also peaceful, hoping to develop our relationship further, to develop a grow-and-grow relationship with her.

This is my personal wish, and whatever you decide, I follow your decision. If you decide to satisfy my wish, frankly, it would be a big surprise for me and my girlfriend.  Life is full of surprise, that's why I choose to be a optimist and want to have a try.

Always, hope this email finds you healthy.

I want to share our picture to you. Hope can bring some warm to you in this winter.

Thank you for sharing your process.

If you would like me to sign your book,  you can include instructions along with your order.
Feb 06, 2018

More On Delay

Dear Ed,

Thanks for your kind reply first.

I  do not very understand point 3, what's the relationship between point 3 and point 1/2?

I wonder, how do these 3 points self-organize themselves as a whole?

Maybe I get used to thinking things/information in such way. So I feel confused, it seems that point 3 is sudden and I do not know what it really means. Could you please provide further clarification?

Always, hope this email find you healthy.

Below is Your Reply [See Feb 01, below.]

- - - - -

Thank you for sharing your thinking about delay.

In TTP we hold that:

1. everything happens in the moment of now.
2. a delay represents a number of clock ticks between two events.
3. you get to make judgments about all these statements.
Thank you for sharing your feelings of confusion.

In your original email, you make various assertions and judgments, including:

Delay always breeds danger. Never do today what you can put off till tomorrow.

Point #3 in my reply validates your prerogative to make such assertions and judgments.

The self-reflective nature of point 3 confirms itself upon receipt of your follow-up letter - in which you implicitly judge point #3.

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

Engineers Implement Delays

into many devices
such as audio equipment
and trading systems.

People Implement Delays

into processes
they don't wish to complete.

Feb 05, 2018

Govopoly Book


Thanks for reading [my newsletter].

Regarding Govopoly, I make it a priority to inform my friends, family and investors about your book.

I loan it out to a few people while others decide to purchase it. In my conversations with people who read the book, I notice that their willingness to learn about how the system works increases; they ask more questions about the Fed and other key topics instead of trying to sell me on their beliefs and opinions.

The book seems to make people reflect on how and why they think and feel the things they do.
Thank you for sharing your process.
Feb 05, 2018

TTP and Physiology

Thank you kindly Ed.

Since I last reported a urine reduction on January 16th of about 35%, I've enjoyed an even better reduction. Probably around 42%. This is fantastic! I oftentimes find myself smiling as I feel the urge to urinate, knowing it will go away, or I eventually get around to urinate when I find it convenient. Oh the peace you have helped me find. I can't possibly thank you enough.

A developer is working on some scripting for me now. Whenever he gets completely done, I'll be glad to share it w/ you. It may groundbreaking!
Thank you for sharing your process.
Feb 03, 2018


Hello Ed,

Sorry for the email.  I am sure you get plenty of them.

On page 165 of market wizards, you said what I believe.

“It is my life. I have a passion for trading.”

How were you able to make the transition away from full time work?

I would love to have an opportunity to learn from you.

All the best.
Thank you for raising this issue.

I notice that I have something or another going on in every moment of every day of every year.

I suppose you can call some of the moments "trading," some of them "work" and some of them "other moments."

You might consider taking your feelings about <transitioning between moments of now> to Tribe as an entry point.
Feb 02, 2018

Wants a Blessing

Dear Ed,

I am from [Country] Full time trader. Gone through your website. I feel like i have stuck a gold mine.
I have been and even now an excellent analyst and speculator. But money wise I went broke many times. Repeating the same mistakes again and again.

I am on the verge of being broke again.

You website feels an oasis. Trust that i succeed as a trader. Want your blessings and wishes Ed.

Thanks and Regards
Thank you for sharing your process.

You might consider taking your feelings about <wanting a blessing> to Tribe as an entry point.
Feb 02, 2018

TTP and Trading

Hello Ed,

I think that now I understand what TT is all about and the link to trading.

I was facing a situation where I considered buying a future that had just gone down quite a bit, but that was firmly anchored in a strong uptrend.

For some reason I did not like this trade. I did not know why I did not like it, and I spent something like 3 days not understanding why and being deeply unsettled by my feeling.

I tried to suppress this feeling as much as I could and 2 solutions came to my mind: Either buy the future, or just forget about the trade. Neither of them was satisfactory.

In the end, I managed to figure out that this feeling had some valid ground to it: I had been exposed to a similar situation not so long ago and the slight difference in configuration gave me the solution to my problem.

In a way my feeling was helping me to find the solution, I just had to choose to validate it rather than try to suppress it.

I have just gone back to the introductory pages of your book and it is all there: Fred, etc...

Thank you so much for your great insight, it is really great!

Best regards,
Thank you for sharing your process and for acknowledging me and the work.

Feb 01, 2018

On Delay

Dear Ed,

On Delay, there are two totally different opinions, as below.

(1) Delay always breeds danger:-Miguel de Cervantes (Don Quixote, Book iv, Chap. ii.)
(2) Never do today what you can put off till tomorrow. Delay may give clearer light as to what is best to be done.-AaronBurr

The essentials of trend following you provide includes (1) Cut the losses and (2) Ride the winners.

First rule indicates zero tolerance to delay if there is a loss, second rule indicates that we need to love and enjoy the delay  if we have a good position, because a good position may develop itself to a great position you never expect.

Finally I find the common point of these 2 rules——We need to love the delay to wait the position to self-prove if it is a loss or a winner. And this actually is another rule you provide——Use Stops. We use Stops to help us to get the upside of the Delay and get rid of the downside of the Delay.

John Lennon once sings"God is a concept, by which we measure our pain", similarly, we use stops to measure the quality of delay and decide if we continue or end the relationship with it.

Life is full of paradox, even so, we can find some internal consistency if we try to understand it and handle it.

Just want to share my insights on Delay.  Now, I starts to learn trading. Hope I can share my learning process to you, in every moment of Now, of the future.

In the end, hope this email find you healthy. You are a great man, for your generosity to strangers.
Thank you for sharing your thinking about delay.

In TTP we hold that:

1. everything happens in the moment of now.
2. a delay represents a number of clock ticks between two events.
3. you get to make judgments about all these statements.

Feb 01, 2018

Meditation and K-Nots

Dear Ed,

I have a question regarding the relationship between meditation, being present, being conscious, living in the moment and TTP. Does meditation help to untie our K-nots?

Thank you for raising this issue.

A wagon wheel can help you comb your hair, once you figure out how to work it.
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