|
|
|||
| |
 |
Ed
Seykota's FAQ
|
| Home | Send Mail to FAQ | Resources | Ground Rules | FAQ Index |
Epidemic
Lab
|
| FAQ June 01-30,
2020 <== back | down | forward ==> |
| Contributors Say | Ed Says | |||
| Jun
30, 2020 The Best Dear Sir, 1. What is the single best advice you can give to someone who is starting on his journey in the stock market and trading? 2. What is the one thing one must avoid at all costs to be successful in this field? 3. What is the impact of something like Covid on your investing and reading of the market? Does it have any influence on your investments? You've been an inspiration Sir. Thank you. |
Thank
you for raising these issues and for acknowledging me and the work. 1. Ain't no best. 2. Ain't no one thing. Searching for the best might provide an excuse for not committing to something pretty good and going for it. You might consider taking your feelings about <the best> to Tribe as an entry point. Tina Turner: The Best 3. For my views and analytics on COVID-19, see www.Epidemic-Lab.com
|
|||
| June
27, 2020 Disappointment Dear Ed, Recently, I back test a simple futures trend following system trading 36 instruments simultaneously. I find the back testing result is very disappointing. I apply fast_lag >> 10 and slow_lag >> 100 to all instruments because I want to avoid over-fitting. And I think these setting is quite reasonable for trading medium/long trend. If trend following is effective, the back testing result should more or loss not very bad, considering I add markets diversification into back testing. Testing Period: 2001-06-01 to 2020-06-01 My back testing result: Though I expect that the bliss score of such system would not be very good due to we do not include dynamic portfolio selection and dynamic risk modification yet, but the back testing result is still very disappointing even I have add many markets to trade. 1. The ICAGR is only 2.65%, and max drawdown is 57.16%, bliss score is only 0.46%. 2. I notice that starting from 2007, the performance of the simple system is very poor and continually lose the profit it catch in previous years. ICAGR:0.00265, Max Drawdown：0.5716148353017998, bliss:0.004635988844832657, run time:0:01:15.849336 Any comments and suggestion from you is appreciated. Thank you. |
Thank
you for raising this issue. Disappointment arises from failure of results to match expectations. You might consider examining the source of your expectations - such as what constitutes "reasonable," "should" and "expect." If you carry your expectations with you into actual trading, you may, from now and again, feel disappointment - and abandon your system. You might consider taking your feelings about <judgment> to Tribe as an entry point.
|
|||
| June
18, 2020 Fitting the Curve Hi Ed, I have been running back tests for the last several weeks on a multitude of strategies. I have some results that make me content. However, I am worried that I might just be fitting the curve with my optimizations. Could you please share your experience with finding the balance between having a great system and totally fitting the curve? Thank you! |
Thank
you for raising this issue. You can test for over-fitting by applying your system to a wide range of markets. You might consider another very important fit: namely, the one between your theoretical and actual results; that has to do with your willingness to follow your own system. You might consider taking your feelings about <obedience> and <authority> to Tribe as entry points.
|
|||
| June
14, 2020 Where to Begin Dear Mr. Ed Seykota, Trust you are well. Your personally direct reply give me a WOW. I thought it should be your admin. staff making a reply. What! Mr. Ed Seykota himself reply to me! I read the attached, an interview by Mr. Michael Covel in his book Trend Following 5th Edition. May you guide and suggest where shall start to learn your trading method and philosophy in your Seykota.com? Is kind I of like a puzzle to me, found no way where shall I begin. Thank you Sir. Regards, |
Thank
you for sharing your process, for sending me the link and for raising
this issue about where to begin. You might consider beginning from your current position. |
|||
| Jun
13, 2020 Wants to Know Positive Intention for Emotional Flare-Up Ed: Trying to come to the grip with all kinds of mixed feelings about a relationship that ended 22 years ago. Not sure what triggered this recent flare up of intense emotions. Sadness, profound sense of loss, anger for self inadequacy at the time, making mental projections about what if it would have been different. Not being able to figure out that is that person I really did not want ( You get what you want! ) or I could not have had her. Resisting the urge to talk to her, wanting to ask how it pan out for her. Million other related things. Why this is all bothering me in my otherwise fine life. Trying to experience my feelings fully, trying to understand what is telling that would make my life better. Can't figure out what these feelings are telling me. Perhaps, without the field of acknowledgment, you can't really resolve it. Any thoughts you have would be helpful. Regards, |
Thank
you for sharing your process. I hold that all feelings have positive intentions. Feelings you dislike may intend to inform you about deviations from right livelihood. For one example, sadness generally intends to inform about loss. If you currently confront a situation involving potential loss, you might naturally conjure up feelings associating with memories of losses - particularly ones in which you might recall withholding your feelings. The don't-like-the-feeling part generally associates with judgments about the feelings. You might also have judgments about your judgments. For more on this, see "Stack of Judges" in The Trading Tribe. In Tribe, we assist each other to accept, celebrate and extract the positive intentions from our feelings. You might consider taking your feelings about <your recent flare-up> to Tribe as an entry point. |
|||
| Jun
12, 2020 Epidemic Lab Hi, Ed, Thank you
for sharing the Epidemic Lab. |
Thank
you for the catch. I notice some links to articles critical of the government response to the epidemic - have a short life. The response now stands with a replacement link . |
|||
| Jun
12, 2020 Link Out of Service Dear Sir, The below link is not working. Please advise. www.seykota.com/TT/Directory/default.html |
Thank
you for the catch. Upon moving the site from one ISP to another, I notice I now have case-sensitive URL parsing. I now have routing for both TT and the former path component, tt. |
|||
| Jun
10, 2020 Strong and Weak Dear Ed, I apologize if this has been asked before. The FAQ now contains many links and information so it's very hard to go through it all to find out if a question has been asked there before or not. Question: How do you define strong or weak in the below link. Thank you |
Thank
you for raising this issue. I do not define strong or weak. I use a proprietary algorithm to rank all stocks. I then publish charts for the few at the top and the few at the bottom of the ranking. I do not provide specific formulas or trading systems on FAQ. Nor do I recommend to buy, sell, stay in or stay out of particular instruments. See Ground Rules, above. |
|||
| Jun
10, 2020 Trading for Others Hi Ed, Excellent guidance, as usual for which I am grateful. Perhaps you know how frustrating it is when you develop a mindset and the world does not comply. Trend followers trading their own accounts have it easier than I do with 80 clients and maybe a dozen outlooks on the markets. For a long time now I've wanted to just go solo and lose the clients. I guess I feel like there's no one out there quite like me who would take care of them the way I do. I haven't had a complaint or lost a client in many years so I have little to get angry enough about to throw it all away. We're heading back [home] tomorrow. Take care and I hope we will talk again some day. I love the stories about "giving advice". And the carefully worded "you might consider the possibilities of". Clever as always. |
Thank
you for raising this issue. Your trading system includes your analytic skills and also lots of stuff around it, like your desire to take care of others. You might consider what effect the loss of your protectorate might have on your overall trading. |
|||
| Jun 9,
2020 Markets and Feelings Hi Mr. Seykota, I'm from São Paulo, Brazil. Sir, I read the trend tribe process, I understood that I shouldn't look at a flow reading screen (Tape Reading) or graphs (candles) but rather allow me to feel the market feeling to follow trends. How exactly would I know that the market is "expressing feelings" so that I can accompany it until its emotions calm down and I close a trade? I say that before, I operated graphic patterns and walked between gains and losses and decided to look deeper into what he calls market reading and I got to his writings. I ask about how to understand what the market is trying to express or start a trend to manage the risk of the operation. Could you enlighten my vision? Thank you for your time and knowledge. |
Thank
you for raising this issue. The Trading Tribe Process aims to give you insights about how your feelings and your judgments about your feelings work to control your trading and other aspects of your life as well. It does not aim to enable you to harvest information about how a market feels - or to translate that information into trading strategies. You might consider taking your feelings about <reading carefully> to Tribe as an entry point. |
|||
| Jun 8,
2020 More On More On Help Hi Ed, Thanks for your reply. I thanks for your straight words in beginning email, which push me to understand myself and realize my potential behavior pattern, I enjoy the process your words trigger. I agree with your proposal and I decide to complete the study in my own way and in my own understanding, not waiting any more. This process I involved today might be your so-called Rock Process (I previously buy your book The Trading Tribe and I enjoy reading it). Also, I recall Turtle Trader Website has posted the memory of David Druz on working with you, I go to the website and find it, and read it again. <David Druz on Ed Seykota> "He has the greatest insights into how markets work and how people operate. It’s almost scary being in his presence. I worked with him as an apprentice for about five or six months in 1991/92. It was tough surviving working with him because of the mental gymnastics involved. If you have a personality weakness, he finds it–fast. But it’s a positive thing because successful traders must understand themselves and their psychological weaknesses." Yes! This is indeed what I want to say. Thanks again! |
Thank
you for sharing your process. |
|||
| Jun 8,
2020 Culture Ed, What is the common denominator here ? link |
Thank
you for sharing the link - and the question. |
|||
| Jun 8,
2020 More on Help Hi Ed, Thanks for your reply and your comments, especially your photo. You indeed detect my tendency that I have the tendency to ask for help. I feel this tendency might relate to this fact: I have 2 brothers and 2 sisters, they love me and provide essential support to my growth when I was young. I feel that asking for help and doing by myself is not internally conflict, depending on the intention and what I really want to accomplish. I would have further deep inspection to explore this feeling. By the way, I ask for the specific data providing is not only wanting to ask for more help, I find Diversification Study/Dynamic Portfolio Selection/Optimizing Trend System/Dynamic Risk Modification these pending topics in TSP page should be studied within a system that handles several instruments, it makes no many sense that we study these topics within a system that only handles single instrument. My initial intention is that, based on the specific data I hope you to share, I and other participants can go on pending topics in TSP page and cross-check results and finally we can finish the whole TSP. Please consider this suggestion and let me know your thought on this. Always, I hope this email finds your healthy and in good spirits. Thank you. |
Thank
you for sharing your process. You might consider completing the study you imagine and then forwarding it to me, along with the data, so that others may follow in your footsteps. |
|||
| Jun 7,
2020 Wants More Help Hi Ed, I find that you posted the back testing result of Richard Donchian 210 Day Break Out System trading 5 instruments starting from 01/02/1990 in your site. So far, I have successfully duplicated your EA SYSTEM result and SR SYSTEM result to the penny in TSP page. I want to move further and I want to back test this Richard Donchian 210 Day Break Out System which not only handle single instrument but handle several instruments simultaneously. I want to see if my back testing result is same as yours, is it possible that you can provide the continuous contracts data for S&P, 30-Bonds, Soybeans, Copper and Eurodollar? Always, I hope you healthy and happy and thanks for your generosity. Thank you. |
Thank
you for asking if I can provide data for you. Yes, I think we can work
something out. See my standard consulting rates at ground rules, above.
Alternatively, you might consider taking your feelings about <doing things for yourself> to Tribe as an entry point.
|
|||
| June
5, 2020 Workshop Again, if you are hosting a workshop, I would greatly appreciate a notice. I am probably asking much but trying doesn't hurt usually. |
Thank
you for raising this issue, again. You might consider checking my last response to you, May 28. |
|||
|
June
4, 2020 What Do We Take for Granted Checking
in. I continue to ask myself what I take for granted. |
Thank
you for sharing your process. You might consider how easily we take for granted the compatibility of (1) record-low interest rates and (2) record-high monetary inflation. Mice and Men and Trend Traders generally survive by accepting and adapting.
|
|||
| Jun 3,
2020 Lucky Hi Ed, I have been examining your thoughtful response. Thank you very much. My first conclusion is that yours is an intensely rigorous approach to trading. Secondly, since receiving your response, I’m working to continually correlate my intention with my results. I feel as if I’m working backwards as I ask myself "Is it possible that if I lose money on this trade, that’s what I really want? I know I intend to make money on this trade; can I prove my intention with positive results?” I can only conclude that if a loss is proof that my intention was to generate a loss, then losses amount to empirical evidence that I must have my wires crossed. Thus, going forward from here on out, any loss will be an imperative to unscramble my thinking. I also see that profitable days cannot be evaluated in isolation. I have to monitor myself for both immediate and long term intentions simultaneously. Otherwise, the hard won soul-searching-based gains of a day, could be erased by the broader trajectory of my yet unknown, long term intention to lose. It is a lot to uncover and monitor. The third point is that I don’t know how to factor luck into all of this. Wouldn’t luck factor-out of the "Intention Equation?” If we are able to retrospectively tie our results to our intention, then how does luck augur in the mix? You said: “You might consider your trading results have about 5% to do with what you know about the markets and 95% to do with what you know about yourself. The other 500% has a lot to do with luck.” In trying to weigh how that 500% luck factor enters the Intention Equation, I thought I should review the subject of luck. If I’m understanding why you mention luck, a seemingly random factor outside a closed loop of intention and result, this is the best explanation I can muster: developing an understanding of intention, and all the work that entails, is simply a preparatory exercise for becoming available for when luck appears. Is that true? For broadening my perspective, here are some quotes I am finding useful: “Chance favors the prepared mind.” – Louis Pasteur "Diligence is the mother of good luck.” – Benjamin Franklin “The harder I work, the luckier I get.” – Samuel Goldwyn “Luck is a goddess not to be coerced and forcibly wooed by those who seek her favors. From such masterful spirits she turns away. But it happens sometimes that, if we put our hand in hers with the humble trust of a little child, she will have pity on us, and not fail us in our hour of need.” – P.G. Wodehouse “Luck is a dividend of sweat. The more you sweat, the luckier you get.” – Ray Kroc "It’s hard to detect good luck – it looks so much like something you’ve earned.” – Frank A. Clark The best luck of all is the luck you make for yourself.” – General Douglas MacArthur “True luck consists not in holding the best of the cards at the table; luckiest is he who knows just when to rise and go home.” – John Hay “There is no such thing as luck. There is only adequate or inadequate preparation to cope with a statistical universe.” – Dr. Armand Hammer “Luck is a matter of preparation meeting opportunity.” – Oprah Winfrey “Hard work and a proper frame of mind prepare you for the lucky breaks that come along – or don’t.” – Harrison Ford “Good luck is when opportunity meets preparation, while bad luck is when lack of preparation meets reality.” – Eliyahu Goldratt “Go and wake up your luck.” – Persian Proverb “Those who have succeeded at anything and don’t mention luck are kidding themselves.” – Larry King “If you think you can, you can. And if you think you can’t, you’re right.” – Henry Ford “The winds and waves are always on the side of the ablest navigators.” – Edward Gibbon “The only thing that overcomes hard luck is hard work.” – Harry Golden “Fortune brings in some boats that are not steered.” – William Shakespeare “If you view all the things that happen to you, both good and bad, as opportunities, then you operate out of a higher level of consciousness.” – Les Brown “Luck has a peculiar habit of favoring those who don’t depend on it.” – Anonymous “Luck is tenacity of purpose.” Ralph Waldo Emerson “All psychological studies indicate that a person’s luck is influenced by his state of mind.” – June Sawyer "I’m a greater believer in luck, and I find the harder I work the more I have of it.” – Thomas Jefferson I already feel luckier, particularly because of this chance to study your approach with you and to begin to understand it. Thanks for your help. Best, |
Thank
you for sharing your process and your compendium of lucky quotes. |
|||
| Jun 3,
2020 Reaching Out Hi Ed, I have tried reaching out to few Trading Tribes in LA but haven't heard back from them. Sending this mail to broadcast and see if I can get a response from someone and join an Active group near me. Really appreciate your help. Thanks, |
Thank
you for sharing your process. |
|||
| Jun 2,
2020 Rejection Dear Sir, You say that there is an inherent positive message inside each feeling. What kind of positive message is inside a rejection feeling? I am 30 year young male and I have to get through the rejection feeling almost daily. |
Thank
you for sharing your process. To reject means to dismiss or to refuse a proposal. Rejection has the positive intention of informing people they don't fit together. This releases them to find a better matches. Savvy salesmen know the value of receiving a clear and early rejection; it releases them to move on to other prospects with their resources intact. The feelings we judge tend to run our lives. If you have judgments about rejection you might say things like, "I have to get through it." You might also tend to attract and nurture relationships in which you get to feel rejection almost daily. For more on this, see The Trading Tribe. People who know the positive intention of rejection, celebrate it and move through it joyously and gratefully. They also know the value of cutting losses in trading. You might consider taking you feelings about <rejection> to Tribe as an entry point. |
|||
| Jun 2,
2020 Continuous Contracts Hi Ed, When I read your TSP section: "Continuous Contracts", I understanding that a continuous contract is a mathematical creation useful for testing futures trading systems over long period, avoiding and removing unrealistic rolling gain or unrealistic rolling loss due to contango or inverting phenomena. In real trading, there is no way traders can catch such gain or loss. But I find a issue along with back testing with continuous future data, I name it "Gap Issue". As below graph (posted on your website) indicates, in real trading, there is a gap between back testing theoretical entry_price and real trading entry_price. Given the same units we calculate from position sizing algorithm, the total money we would be in position buy_open next day in real trading is larger than in back testing. My hunch is that this "Gap Issue" might not affect obviously return rate of this trade, because when we exit the trade, the gap happens again and offset the gap effect of previous entry in some degree. I wonder if this gap issue is really a issue we need to handle or consider when we conduct back testing. Hope you can share your experience on this topic. My solution is that, in order to conduct more precise back testing, we can use continuous data to generate trading signal and position units, but for the entry_price and exit_price, we should use corresponding future contracts quote that we would buy or sell at that time. Always, I hope you healthy and happy and thanks for your generosity. |
Thank
you for raising this issue. Continuous contracts can give you a fairly accurate back test result without having to worry about the complications of rolling. If you want to replicate actual trading results, you might consider going the extra mile and extending your code to handle rolls. Note: the roll gap may vary day-by-day, especially near expiry; for best fit with actual trading results, be sure to roll on the same day. |
|||
| Jun 2,
2020 Impostor Dear Ed, Today someone followed me on twitter claiming to be Ed Seykota. Here is the link. Take a look at Ed Seykota (@EdSeykota5): https://twitter.com/EdSeykota5?s=09 The location of the account appears to be based in the Netherlands. Thank you for sharing your Covid-19 simulator. Cheers, |
Thank
you for alerting me about the impostor. I now have an alert on the FAQ_Index page. Thank you for acknowledging the Epidemic Lab. |
|||
| To Top of Page |
