Ed's FAQ Jan 01-31, 2022

Contributors Say

Ed Says

January 28, 2022

Do-It-Myself TTP

Dear Ed,

Thank you a lot for sharing your knowledge and experience about TTP in your book "The Trading Tribe"! I appreciate it a lot.

As a 22 years old futures trader, I am reading your book to become a better trader, find my right livelihood and get some nice AHA moments.

Still not being able to find a Tribe in Germany, I try TTP by myself yesterday during my trading session. I try to be the receiver and sender at the same time.

In the beginning, I think I want to work on my frustration in my trading due to a lack of profitability.

I develop some forms - hurting neck, itching eyes, itching head skin and some more. The receivers cheer me on. Suddenly I describe a feeling of helplessness. I am afraid of it. I want to hide from it. I press myself into a corner of the room, I cry, and see the face of my mother (who tyrannizes me as a child because she hates men and therefore hates my young self for being a man).

I perform all forms at the same time and reach a climax of horrible helplessness, which feels good to experience. Then I stop because it is too exhausting for me. I feel clearer and purer.

Then I finish my trading session and write my trading diary report. Fred takes over my right hand and writes "I don't want to trade anymore. Enough." I ask Fred if he wants to say anything else. He replies "You son of a bitch, you left me alone when I needed you the most. I hate you. I don't have anybody else but you and still you leave me alone." Then he gets tired and stops writing.

Needles to say, I am overwhelmed right now. I don't know what to do. I am trying to feel what to do and feel to continue trading today. So I do. But I doubt myself and the entire situation.

Ed, can you please help me with this? I don't know what to do. Can you maybe share the pattern people displayed before deciding that trading is not for them so that I can put my situation in a broader context? Maybe there is some general wisdom that comes to your mind when reading this E-Mail. I am very thankful for every word you want to share with me and for every word you don't want to share with me.

Thank you once again, just for receiving my thoughts and feelings.

With kind greetings from Germany.

Thank you for sharing your process and your attempt to run TTP on yourself.

You might consider locating or forming a Tribe in your area.

Running TTP on yourself (the DIM process) has some similiarities with running a surgical process on your own heart.

Operating On Your Own Heart

May Present Issue

especially when it comes
to the part about
stopping the heart
during the operation.

Image Credit

January 26, 2022

Charts Not Working

Hi Ed,

I just wanted to let you know that the ''Long-Only'' and the ''Buy-the-Dip'' pages are not working still.

I hope the problem can be resolved soon and I hope you're doing well.

Best regards,

Thank you for reminding me.

I still have to upgrade the signal generator to work with a new data provider.

January 26, 2022

Mysterious Markings

Hello Ed

As per my understanding in charts EA = Exp Average, What is W and ST stands for?

Thanks

Thank you for raising this issue.

I have that part of the chart service in development. As such "W" and "ST" still have no particular meanings.

January 18, 2022

Acquisitive Minds Want to Know

Dear Mr. Seykota,

I am working on the part of my trading system that picks the stocks to trade on any given day.

I want my system to trade stocks with smooth uptrends, so it selects stocks with high volatility-normal strength (VNS).

In my experience, stocks display high VNS in one of two cases:

- When the stock price exhibits a smooth uptrend.
- When the stock price suddenly makes a big jump to the upside and moves very little thereafter.

The second case usually seems to happen when the underlying company is being acquired:

Once the acquisition is announced, the stock price usually makes a big jump up, barely moves thereafter and eventually the stock ceases to trade altogether.

I’m noticing that in recent years there are have been a lot of acquisitions,

because in backtests my system often picks the stocks of companies undergoing acquisitions - instead of stocks in smooth uptrends.

I also notice that the simulated performance of my system is deteriorating quite a bit in recent years.

So I’m wondering if the performance degredation I’m observing in recent years might be related to the fact that my system tends to select more and more of these undesirable stocks.

Any insight you could share on this issue would be highly appreciated.

Best regards from Austria,

Thank you for raising this issue.

You might consider testing your hypothesis by implementing a volatility trap in your back tester.

For example, you might inhibit entries into instruments that have short-trem volatility in excess of some threshhold.

You can then run a series of tests over a range of threshholds to find the optimal value.

Let me know if you discover anything surprising.

January 14, 2022

Lag Effect

Hi Ed,

Just wondering have you ever done some studies on the lag effect and rate of acceptance of new ideas or is this something that's been explored yet in system dynamics?

Thank you for raising this issue.

One way to model a lag:

L(t) = L(t-1) + dt * P(t) - L(t-1)) / tc

Where:
L = Lag Price (Dollars / Unit)
P = Current Price (Dollars / Unit)
tc = time constant (days)
dt = delta time (days) The solution interval.betwen t and t-1.

In this formulation the Lag tracks the Price
and does so more quickly for smaller values of tc.

January 6, 2022

Looking Forward

Dear Mr. Seykota,

I am thankful for your kind inscription in the book I recently ordered from you. I’m looking forward to reading your work. I’ve read the reviews and found that your content is more psychological than it is about trading methodologies.

The above insight is foundational. For I am a fervent believer that our mind affects our trading (and life) as the prime mover; thus making the unconscious processes conscious is essential to not only become an effective trader, but a whole human being. This was understood in esoteric circles, e.g., in alchemy, it was known as the great work, in jungian circles it is known as individuation, and, among other sources, this idea dates back to Apollo, via his ancient adage, “Know Thyself.”

Thank you for your work. I look forward to reading your book and applying it’s concepts to further illuminate any remaining dark crevices of the mind. As a philosophy of mind BA major and MA graduate, I am sure it will serve to be most illuminating.

Best returns,

Thank you for acknowledging me and the work.

To Top of Page

Epidemic Lab