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Ed Seykota's FAQ
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Apr 24, 2021

Wants Tax Advice

I am a single guy and a trader considering Puerto Rico for the tax benefits and weighing the costs and benefits.
Besides the potential for statehood, I consider the natural disasters, the government that breaks promises and is inefficient at delivering basic services, the spotty electrical grid, the crime, the possibility I am entering at multi year top in asset prices both equity and the real estate  and would lose money on my real estate purchase in Puerto Rico and make less money from equities and the frictional costs of relocating.
That said, I see a number of positives like the tax savings in years I make seven figures which overcomes the dollar costs mentioned above, the day to day weather, the cheaper absolute real estate prices on the ocean, and the potential for personal growth moving to a different culture.
I have noticed you are one of the few (maybe only) prominent traders who moved to Puerto Rico. That seems telling given the big tax carrot. I see you also moved back to the States.  If you could share your views that will better inform my decisions, I would appreciate it.
Thank you for raising this issue.

FAQ does not dispense advice on specific trades or positions.  

You might consider taking your tax questions to a tax attorney.

You might consider taking your feelings about balancing quality-of-life issues with possible tax savings to Tribe as an entry point.
Apr 24, 2021

More Central Limit Theory

Thank you very much for your message. I could not clearly state the link between the central limit theorem and trading systems. You are right, I don't want to be under a wagon :)

I want to open the subject with your permission; The central limit theorem can make predictions about larger populations by looking at a small population. Can predict the consequences of larger places based on the consequences of a rural place about elections. Or, in line with the correct calculation parameters used when measuring the test safety of any train in a 1-year period, estimates can also be made for the calculation parameters to be used in test security in the 1 hour time frame of the same train.

This is a security measurement technique that we won't encounter much in real life. And I think the train is a trade train ...

We can reach the largest data set / stack in backtests that we will do in a daily and above periods in a trade system. However, in hourly and minute charts, such a possibility is often not available.

I think that the reason why trade systems do not work in very short terms is the inability to reach deep enough history. There is no such problem in daily, weekly and monthly charts.

Therefore, for example, we can conclude that the system parameters we found as a result of a backtesk that was inclusive until the first day of the public offering of the exchange in daily periods in s & p 500 are the best working parameters for other periods . But even though this is true, we don't have a chance to test it as we can't go back that much on the minute charts.

What do you think? Thank you again ...
Thank you for extending the discussion.

You might consider taking your feelings about [wanting to predict outcomes] and [having to live with uncertainty] to Tribe as entry points.
Apr 24, 2021

The Last Ten

I've been meaning to send this to you!

Make Health Last
Thank you for getting a Round Tuit.

You might consider watching the movie, The Game Changers.
Apr 22, 2021

Sticking in the Past

Hello from Florida,

The the best I can say is: My writing style is "stuck" in the past.. seemingly in all areas of my life.

Looking to make first connection with a Tribe - awaiting replies from reach outs.
Thank you for sharing your process.
Apr 21, 2021

Central Limit Theorem

Mr. Seykota,

the success rate of a trading system yields different results in each period. but based on the law of large numbers, if we do enough back-testing, could there be the same parameters that show the highest success rate for all of them?

In the central limit theorem, n> 29 inequality was used as the large sample size for one period. I tried to adapt this inequality to technical analysis systems.

One period was used in n = 30 inferential statistics. Although the sample was not distributed normally,

I observed that the 30-period simple moving average trend-following feature in markets with high momentum yielded the best results in my very long-term backtests.

What's the secret of the 30 periods?

Thank you if you find the opportunity and help.

As a rookie, you are a master traders that I take a lot of example from. (I got help from Google translate, sorry for the wrong expressions ...)
Thank you for raising this issue.

The Central Limit Theorem has to do with distributions within distributions; mighty handy for some applications. I wonder if you can tell me what it has to do with trading system design.

A wagon wheel works great on a wagon; you might not find it so handy for combing your hair.
Apr 18, 2021


Hello Ed

I notice it is quiet on your FAQ page and also a nosedive in your site Alexa ranking, so I am wondering if you are alright.

Life has changed a lot for me with this lock down in London and only just a few days ago are we permitted to go to the gyms again. I am concerned many people including myself will have formed a new and bad habit of not socializing much and going out much less.

I had the AstraZeneca - Oxford 1st vaccination a few weeks ago so probably will live through this pandemic but a few people I know have not been so lucky.

Best wishes
Thank you for checking up on me.
Apr 18, 2021


Dear Ed,

Hope you are safe and super as usual.

I decide and then it goes something like this! :

I make money on behalf of Ed. Then I use that money to gift needy people on behalf of Ed! Who gets blessing ? Who knows? Who cares?

I get to see and keep smiling memories!
Thank you for sharing your process.
Apr 16, 2021

Very Helpful

Hi Ed, I hope you are well;

I was a member of NY TT at one time;

I have written in to FAQ a couple of times--the TTP was and is very helpful to my life;

Thank you for sharing.

I'm looking at FAQ and Trading system project--hopefully I will have something to add;
Thank you for checking in and for acknowledging the work.
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