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Ed
Seykota's FAQ
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November
19, 2021
Getting a
Round Tuit
Ed,
I feel grateful for your work on the Trading Tribe and Govopoly.
I sketch out a trading plan on paper and your work inspires me to
acknowledge my feelings
of apprehension and fear.
I notice that I feel excited about the concept of building my own
personal trading strategy. I also notice I feel overwhelmed and fearful
when I think about building a backtesting model.
I delay
backtesting and continue to think about programming a model and the
hurdles I'll likely face. I stop and notice that I spend a lot of time
thinking and not a lot of time doing.
I mail a request to Trading Tribe for a copy of "The Essentials" and a
"Round Tuit." I acknowledge the intentions of my feelings (overwhelmed
and fear) and write out a step by step plan to articulate my trading
strategy and codify my rules into code for a backtest model.
The plan is a guide to help maintain focus on the present and apply the
principle of compound interest to compound learning. A little bit each
day adds up. I place my Round Tuitt in a prominent place on
my desk as a reminder to stay present in the "moment of now."
I celebrate the process of following my plan to back test my trading
strategies. I become overwhelmed and fearful and I pick up my "Round
Tuit" and say, "You don't need to backtest - you can always get around
to it someday."
I laugh at the absurdity of this statement and I get back in the
moment. I feel a fresh burst of motivation and energy -- and a little
bit silly that a plastic coin helps me maintain my path of Right
Livelihood.
I wish you well, |
Thank
you for sharing your process and for acknowledging the work.
In TTP we celebrate our feelings and appreciate their positive
intentions.

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Fear:
The
Feeling of Risk Control
You can ignore it, fight it,
overcome it and take the risk.
You can embrace it, celebrate it,
work with it and manage the risk.
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Image
Credit |
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November
18, 2021
Wants
Linguistic Precision
Dear Ed,
Could you clarify the response to the inquiry from the FAQ list dated
Oct 7, 2021?
Specifically, the underlined statement related to the five trades … are
they 5 trades of the same stock (or) 5 trades representing unique
equities within the entire $50k portfolio?
Is there a distinction between taking “a position? and making “a trade”?
Thank you kindly in advance,
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Thank
you for raising this issue and or caring to notice imprecise writing.
The "five trades" refers to diversification into five separate
positions in different instruments. Five positions in the
same instrument would amount to one 5x-large position.
I use position
(noun) to refer to instrument in an account or in a portfolio.
I use trading
(verb) to refer to the action that moves instruments in and out of an
account or portfolio.
I use trade,
in context, to refer to either.
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November
14, 2021
John Conway
Dear Ed,
Did you know John Conway?
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Thank
you for asking about John Conway (1937-2020): mathematician;
game-theorist; inventor of the Game of Life.
I know of his work and do not have a personal connection.
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November
11, 2021
Health and
Wealth
Good afternoon Ed.
I hope this email finds you well.
First
off, congratulations on your successful weight loss program. I think
that's awesome. Someone once told me if we didn't have our health we
didn't have anything. He was right. Health is wealth.
The
Essentials card has been a tremendous reminder for my trading plan.
Pretty cool the day it came in the mail I doubled my money. Very
thoughtful, thank you.
I enjoyed your book The Trading
Tribe very much. Thank you for signing it. I plan to order
Govopoly very soon.I also wanted to thank you for sharing your wisdom,
knowledge and giving us a platform to communicate with you. Be well,
take care!
Best Always,
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Thank
you for acknowledging me and the work.
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November
7, 2021
Fairness
Good morning Ed,
Hope this email finds you well.
As I am reading Loren Eisely's essays on evolution, Nature and the
cosmos, questions emerge and I think of none but you as the teacher for
explanations.
Eisely believes, contrasting to Dawanian theories, the human brain is
the pandora's box which experiences sudden and "violent explosive"
transformation while his body remains a "peculiar larva nakedness."
Because of the discrepancy of body and brain, huma becomes creatures of
society, swinging between human and animal.
Eisely emphasizes, "man could not be man if his dreams did not exceed
his grasp." Here comes my question and my puzzlement:
If man's rise is credited with its brain, why isn't this 3-pound,
15-centimeter gray matter
been distributed evenly across the board? Why are their chiefs in
Native Indian tribes? Why are there so many called and so few chosen?
Is this a defective design or a joke from nature? Imagine every human
life is the replica of Leonardo Di VInci, Albert Einstein or Confucius,
would human civilization still experience Thomas Cole's five-stage of
history? Would we be able to delay or eliminate the
"Destruction" and ""Desolation"?
Or is it possible that even Aristotle and Lao Zi are just victims of
Nature-half human and half animal?
What is your take on this topic? I am forever grateful for your
explanation or answer.
Thank you and take care!
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Thank
you for raising these questions.
- - - - -
On the fairness of people having different abilities, mental
capacities, assets, etc.
I recall my kids saying, "That's not fair."
I reply, "If life were perfectly fair, you'd both look like me."
They reply, "eeeuuuwww," and drop it.
- - - - -
On delaying destruction.
The fundamental condition of life includes birth, growth, maturity,
decay and death.
You can accept this natural progression and enjoy it while you got it -
or you can resist
it, at your own peril.

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If Life
Were Perfectly Fair
you'd look like this
and so would everyone else.
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Image
Credit |
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November
5, 2021
Intentions
and results
Good morning Ed,
Hope this message finds you well. How do you define "hope"
and "intention"?
Thank you!
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Thank
you for posing these questions.
- - - - -
Intention: the structure of a system.
For example, a pendulum structure includes a string and a
bob. That structure (intention) produces the resulting behavior:
namely, it swings back and forth.
If you wish to get a different result (behavior), you can change the
intention
(structure), say by shortening or lengthening the string.
Wishing has little to do with intention. You change your
intention = result by altering the system structure.
- - - - -
Hope: a desire for a condition to change.
For example, if you hope for some or another stock to go up (you do not
accept the current price) you may wind up medicating your hope
by loading up on the stock, over trading and inviting
drawdowns.
You might consider hopelessness as a helpful attitude for
system traders.
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November
4, 2021
Doubting
Dear Ed,
Thank you for maintaining this website and continuing to help a lot of
other investors and traders.
After doing a lot of technical work and psychological preparation
suggested by most of the experienced traders and investment
professionals, I was able to generate 15% return per year but I was not
fully satisfied.
I created and back tested some new strategies to do 100% returns per
year, But I ended up getting poor UNEXPECTED results due to various
reasons including some execution reliability and discipline issues due
to the large drawdown of 10% in one week period. As of now I am down
30% from the peak.
Even though I knew from back testing and simulation I might have to
face
a 30% drawdown in TWO WEEKS, I did not think that it would be this
painful to experience a 20% drawdown EVEN over a THREE MONTHS time
period and wouldn't be able to stick to the strategy when the going
gets tough. I am basically trying to pick up the nerve back here and it
was very painful and decided to write to you.
I know in a situation like this you remind traders the quote "Everybody
gets what they want" and I know from the intention equals results
principle I concluded that I have to realign my intentions in a Tribe.
I still find it difficult to go to the Tribe and continue to judge and
doubt the TTP technology as I couldn't get my intentions right the
first time.
So, I decided to write to you to find out if there is something wrong
with me or I am doing or you also had similar experiences in your
trading career.
I have written to you a few times and each time your insight was
something I never expected and it fixed the issue miraculously.
Your thoughts are much appreciated, and thank you sir.
Thank you Ed, Take good care of yourself.
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Thank
you for sharing your process.
You might consider taking your feelings about <doubting>
to Tribe as an entry point.
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November
1, 2021
MMT and
Govopoly
Ed,
I am new to you, but I have been looking at your website etc., via
reading the mention in “Unknown Market Wizards”.
Anyway, I am planning to purchase the Trading Tribe book and was
wondering about Govopoly.
The question I have is this: Do your thoughts in Govopoly integrate
Modern Monetary Thinking (MMT)?
The reason I ask is because I have listened to Mosler recently and what
he is saying seems borne out by what fiat systems in place around the
world are manifesting. Just wondered, before I make decision
to purchase or not. Thank you, Mike
p.s. Bastrop… do you take in-person visits? I live in Houston.
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Govopoly
presents a model of the intention (structure) of the economy and how it
generates its results (behaviors).
The model explains MMT as a justification for the generation of fiat
currency.
Yes, I take visits from visitors, especially if they bear musical
instruments that they know how to play.
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