| Next ==>
from Ed in Red)
Tue, 31 Aug 2004
What are your thoughts on blunt honesty with yourself and others?
might like to take your feelings about the difference between
"honesty" and "blunt honesty." into the process.
Blunt end of a Maul
assist or injure
on your intention.
Tue, 31 Aug 2004
You state you do not believe in time. This is different than time not
My current belief is that beliefs frame (and give form to) now.
Please comment on beliefs as related to forms.
you believe time exists, you perform that act of believing in the
you believe time does not exist, you perform that act of believing in the
do not know how to do anything in the past or future, including believing
in time (or not believing in it).
Clocks can't do anything
the past or future.
Tue, 31 Aug 2004
I am thoroughly enjoying the TT site. As I read the newest chapter, it
dawns on me:
There is no time ...
like the present.
The tricky part ...
to like the present.
Being in the Present
Sat, 28 Aug 2004
Dear Mr. Seykota,
I'm writing to ask if you ever had Trading Tribe inquiries in New Jersey.
If yes, is it possible to contact those traders for the purpose of
starting a new TT.
I live in central NJ and have been trading for a living since 1999. Thank
you very much.
Tribe Directory - How to Join, above.
Fri, 27 Aug 2004
Hello Mr. Seykota,
... I came across your name and website ... seems to be a mix of projects
and TTP. Looking through TTP I still don't really understand what this
website is all about.
It seems to be
mainly a type of religious youth group but not youth, for gathering and
helping improve yourself mixed in with trading stocks or investments, as
you call them "instruments." Is this what TTP is?
I would like to
think it is that but more developing systems and plans to trade stocks as
well. It also seems like a group to help each other figure out their
emotions and how they affect "systems". systems = anything,
economies, markets, life.
I really enjoyed your "Risk Management" page. It gets me
motivated and brainstorming. It is just too bad that I didn't get into
this stuff around the time I graduated, I would have probably come up with
some crazy formulas. I hope that the following questions don't sound
really stupid. I have been trading stocks for just over a year now,
learning it all completely on my own motivation. I started with no
knowledge of stocks or markets or the like.
Once I got down the to calculus part it stopped me for a little bit trying
to remember this stuff. Before I continue trying to remember this on my
own I am going to write this email.
What I'm stuck on is the R = part
Maybe it is beyond me or maybe I just need a quick reminder.
It looks like you took
S = (1 + b*P) * (1 - b) * S0
divided both sides by S0 to get:
S/S0 = (1 + b*P) * (1 - b)
then you put each side equal to R?
R = S / S0
R = (1 + bP) * (1 - b)
Then with FOIL and a little math took the one side down to
R = 1 + b(P-1) - b2P
What I don't understand is why and how you put both sides equal to R?
From there on I
can't pull out what I learned. As I type this something in the back of my
mind is trying to remember something about dx/dy bah I need to go back and
take a refresher class on trig and calc. I love math but those years in
school I was turning to lazy mush.
Moving down the page, I have a couple more questions.
- Figure 6, 7, and 8 seem to make sense, but it would help to picture if
you used a Z axis showing your calculation with numbers like you did above
with the 1000$ starting amount. Are you using the Kelly Formula?
- Lake Ratio:
How far down the X axis does the Earth start in the calculating the Lake
Ratio? All the way to 0 or when the equity or fund was originally
Either way it
seems relative. Wouldn't you have to have a relative historic fraction to
compare to, because it seems like it would be lopsided, especially if you
started your earth at 0 stock price?
Or are you using
this system to compare volatility relative between instruments instead of
PS: Shouldn't it be "divide the total area of water by the area of
the earth below it" instead of volume?
Looking at this Lake Ratio I have a few ideas popping up in my head on how
to use geometry to come up with different systems of comparing volatility.
I have a couple more suggestions to make the page easier to understand. If
you want them let me know. I hope to eventually find time to look through
your other theories page "radial momentum".
(return) is just another name for ending stake, S, over starting stake, S0.
can find out more about TTP at TTP - The Trading Tribe Process, above.
Ratio is a conceptual model to support discussions about volatility and
draw-downs. You can frame water and earth as volumes or as areas, as
long as you use the same units of measure for both.
Rain Falls on your Performance Graph.
more on this
other topics relating to Risk,
Risk Management, above.
Fri, 27 Aug 2004
Power of the
I have recently read that you believe that short term trading can be just
as profitable as (long term) trend following, but that one will need to
work ten times as hard to achieve it.
Is this quote
correctly attributed to you and if so, what is the nature of the short
term trading: trend following over a shorter time frame / swing trading /
do not know what you read unless you tell me the source or provide the
If you have the ability to believe whatever you read, you might consider
writing down some very beneficial things about yourself, and then read
careful what you eat.
Fri, 27 Aug 2004
What is Best?
Since I was a teenager I've been pondering about this question - is it
better to be accepting to whatever that happens, or to fight for it and
keep pushing (the never-say-die spirit)?
Time and again people push their limit and they achieve even higher peak
that they wouldn't of otherwise. Never, never, never quit. Fight till the
On the contrary, reality is just perfectly as is. Market is always right.
Reality is always right. It is right because it is just what it
At some point, I thought I have the "answer." If I give my best,
then I can accept whatever that happens with joy. Do everything that I
can, and accept the outcome. It resonates with me.
But then recently the second question creeps in - what is my
"best"? How do I know that I've done "everything"? It
just seems that one can always make a case that "I could have done
Or, in TTP context, there is only now, and no one can change whatever has
happened in the past. There is no concept of should-of, would-of or
Does TTP have a concept of "best" then? Best or better implies
comparison of two or more objects. But if there's only now, there's
nothing I can compare to. If I run the 100M in 9.87s, I cannot run any
"better" nor any "worse" than 9.87s in that now
moment. So all athletes who say they've given their best and leave with no
regret actually are saying they've given their best, and their worst?
I'm still confused, as I still haven't resolved my original issue. To
accept or to push? What does giving my best mean? What does do everything
I can mean? I feel it is a good entry point for me, perhaps in a polarity
context. Our meeting is twelve days away. In the meantime, now, may I
please ask for your insights? Thanks.
from Latin com (with) + petere (to seek) - to strive, with
others to achieve a goal.
sometimes compete with others (as in the Olympics or in Business).
struggle between individuals helps the community to find the best way to
do something - and helps the contestants discover right livelihood.
are all best at being ourselves. When we locate and practice right
livelihood, we re-frame questions about who is best and whether
to strive or accept as part of the beauty of the free-enterprise
system of relating to each other.
acclaim, the biggest, richest, best looking, smartest, thinnest, most
compassionate, most powerful, greenest, most curly and hottest and coldest
guy on the block.
Whether you see
Curly as a nemesis or as an ally may depend on the extent to which you
realize right livelihood.
Fri, 27 Aug 2004
I'm pleased to report the New Orleans Trading Tribe met last night for the
first time. Two tribe members attended. We shall gather every second
Thursday night hence.
Thu, 26 Aug 2004
How may one join the tribe?
Does one have to hang on skewers for three days? ;-)
Or kill a buffalo with bare hands? ;-))
information on how to join, See Tribe Directory - How to Join, above.
do not know where to find any bare-handed buffalo.
to Play it close to the vest
do not reveal their hands
Thu, 26 Aug 2004
Thanks and a
Dear Ed Seykota,
Thank you for your reply to my question and obviously even more thanks for
your replies to other questions that I read. What we get here is
mentoring, a missing link for many traders.
Is there something like an optimal percentage of trend followers
within the total population of market participants?
small or a dangerously large percentage? Trend following group’s total
profits and their per capita profits being the criteria for calling that
percentage optimal or dangerous. Of course there is an issue of trend
definition by each of the followers, so let’s say it is a long term
trend, more or less in line with your definition.
choppy markets persist sometimes because there are too few trend followers
in, too many out of the market – sitting out a choppy market?
trending markets, trend followers tend to wax strong and confident; they
follow breakouts with enthusiasm and vigor. This tends to
precipitate choppy markets and strings of false breakouts that tend to
discourage trend followers.
percentage of money on trend following methods tends to seek its own
to discourage all
the most stalwart sailors
Thu, 26 Aug 2004
I've read just about everything at "The Trading Tribe" web site
in recent months. Thank you for such valuable and insightful information.
It has definitely helped my trading and I quote "gems" I've
learned at the site frequently with my trading friends.
A couple of questions about trading systems:
1) Is it advisable to trade multiple (3 to 4) trading systems
simultaneously for diversification purposes or is it better to focus an a
2) Do thoroughly developed and tested trading systems typically have a
"life span" and then after some period of time lose their
A system comprising 3 to 4 subsystems is a single system.
A system exists as long as someone follows it. People have a life
span and tend to lose effectiveness near the end.
Following acknowledges the principle of Momentum; as long as momentum
exists, there is a place for trend following.
a long-term position
Thu, 26 Aug 2004
I would like to tell you that you are correct about many of the things you
say ... The general concepts are the conscious mind, the subconscious
mind, and the universal mind. These ideas and the application of certain
exercises including meditation have helped me greatly.
that TTP facilitates communication with Fred. Other methods deliberately
try to reprogram Fred. Ok.
The student from The Jademaster in The Traders Window one day says
"The stone I
hold is not genuine Jade." But why didn't the Jademaster just
tell him that the very first day he knocked on the door?
is an indefensible concept about a feelings pump, intentionally unique to
TTP. I do not know if Fred appears yet in other methods.
does not answer "why" questions - see Ground Rules.
Thu, 26 Aug 2004
After many months of brewing green tea,
I find sweeping the floor is TTP,
My thoughts swirl in flames! I finally see!
Jade is not the Trade, because Jade is Me.
Thu, 26 Aug 2004
I am reading the book Trend Following from Michael Covel and learn
so much again about your great talent as a trader and mentor to others and
... sincere regards and thank again you for what you bring to us in
trading and in life.
Wed, 25 Aug 2004
Dear Mr. Seykota:
I ... began learning about trend following strategies and your great
success in investments and life ... I am considering moving into trading;
I was born a passionate competitor and believe I’d excel at this form of
In any case, as I’ve learned about the temperament required for
successful trading as alluded to by the content on your Trading Tribe
website and in the book Trend Following, it occurred to me that a
potentially useful resource for your members would be the Power of Now
program (book and audio book), by Eckhart Tolle.
the Power of Now is a psycho-spiritual method of liberating the egoic
mindset and attaining enlightenment, doing so by being entirely in the
By being in the
present moment, the only moment in which life ever occurs, our ego-related
thought processes die along with our sense of time, thereby dissolving
anticipatory or backward-looking feelings, thoughts and energies.
help but note that enlightenment (as just described, though it really
defies mental labels) is the best and final outcome of some of the
elements of your program, so I wanted to mention this resource to you as a
possible aid to your own and your members’ learning process. I have no
personal interest in the program other than it was a transformative tool
on my own path.
seems to advocate freeing ourselves from our analytical minds and egos,
letting go of negative thoughts.
advocates re-uniting our conscious and subconscious processes through
developing willingness to experience all our feelings.
Wed, 25 Aug 2004
Tue, 24 Aug 2004
Wants to Know
More about TT
I have just looked at you site and I am interested in finding out more
the trading tribe, how do I go about that?
Essentially I am interested in meeting people who have an interest in
developing their trading skills through sharing information and ideas with
Trading Tribe Directory - How to Join, above.
Tue, 24 Aug
Check out [stock], it is a very strong trend.
popular screens can pick out the strongest trends.
entering a trade, you might like to formulate a plan for exiting.
about half of trading
Tue, 24 Aug 2004
I have noticed in past posts that contributors have questioned why the
trader in the exercise in system definition did not go short and that you
had not encouraged him to adopt such an approach.
I too could not
understand this and initially thought this must be related to not fighting
the long term trend for stocks to increase in value. This confusion
dissipated when I did some quick spreadsheet workings which made every
thing clear to me.
For example, if a stock is at $10, the maximum profit to be made from
going short is $10 per share, while the upside potential is unlimited. If
the $10 stock went up 5 times its value, to $50, a $40 profit per share
could be realized, while even in the best case scenario for going short
would only reap the maximum of $10.
profits from going short can only be realized from stocks which have very
high entry prices, usually an indicator of upward price strength, not
It is now clear to me that in trend following, we want the price to
continue to move in our favor for as long and as much as possible, yet
being short a stock has an inherent limitation to do this. Long only for
big, major-mover, long-term multi-fold trends tend to occur on the long
side - although riding them can have complications.
Mon, 23 Aug 2004
Under-Fred Network ...
The Political Brain
By STEVEN JOHNSON
As The Times reported not long ago, a team of U.C.L.A. researchers
analyzed the neural activity of Republicans and Democrats as they viewed a
series of images from campaign ads. And the early data suggested that the
most salient predictor of a ''Democrat brain'' was amygdala activity
responding to certain images of violence: either the Bush ads that
featured shots of a smoldering ground zero or the famous ''Daisy'' ad from
Lyndon B. Johnson's 1964 campaign that ends with a mushroom cloud. Such
brain activity indicates a kind of gut response, operating below the level
of conscious control.
Could the U.C.L.A. researchers be creating the political science of the
future? Consider this possibility: the scientists do an exhaustive survey
and it turns out that liberal brains have, on average, more active
amygdalas than conservative ones. It's a plausible outcome that matches
some of our stereotypes about liberal values: an aversion to human
suffering, an unwillingness to rationalize capital punishment and military
force, a fondness for candidates who like to feel our pain.
What would that kind of insight tell us that we didn't know already? One
thing is certain: evidence of a neurological difference between liberal
and conservative brains would not be another instance of genetic
determinism, since patterns of brain activity are shaped by experience as
much as by genes. (Those who suffer from post-traumatic stress syndrome
also show unusual patterns of amygdala activity, but those patterns are
almost inevitably the imprint of a specific event, and not the long arm of
But a recent
study by Paul Goren at Arizona State found that voters typically formed
their party affiliations before developing specific political values. They
become Democrats first and then decide that they, say, oppose capital
punishment and support trade unions. But how do they make that initial
decision to be a Democrat? The most likely indicator of political
preference is your parents' party affiliation, but if everyone simply
voted along family lines, the dominant party would simply be the one whose
members had the most voting offspring. The real question is why someone
would ever break from the family tradition -- without feeling strongly
either way about specific issues.
Is there something intrinsically reductive or fatalistic in connecting
political values to brain functioning? No more so than ascribing them to
race or economic background, which we happily do without second thought.
Isn't it more dehumanizing to attribute your beliefs to economic
conditions outside your control? At least your brain is inalienably yours
-- it's where the whole category ''you'' originates. No one denies that
social conditions shape political values. But the link between the brain
and the polis is still uncharted terrain. Prozac showed us that the
slightest tinkering with brain chemistry could have transformative effects
on a person's worldview. Who is to say those effects don't travel all the
way to the voting booth?
lives generally assume the contours of the feelings we are unwilling to
might consider setting up a Party party - one that sponsors, say dinner
parties, at which political advocates could take turns experiencing each
Candidate is a Shoe-In
Mon, 23 Aug 2004
"Traders may find that the majority of their
trading activities are basically ritualistic in nature and actually
contribute little to the process of trading successfully. Meanwhile, a few
activities, many of them subtle and unconscious, dominate the
I appreciate that every case will be different, at least in detail, but
would you please give an example of the above, especially clarifying the
phrase "basically ritualistic in nature" and giving an example
of the 2nd sentence.
Thank-you very much for your website.
might keep a log of all the things you do during your trading day.
them according to how much time you spend doing them.
them according to how much they contribute to your performance.
you get two very different rankings.
Sat, 21 Aug 2004
The Notion of
Ed, so many great thinkers of our history has tried to explain what “time”
is. So many people has devoted their minds to the subject and I have never
really stopped to think about their concepts because I always cultivated
my own belief of what is “time” that works for me. When you posted
your thoughts, I stopped to think about my concept again, because it
really resembles yours. You said:
“We live in a continually evolving, self -
computing moment of now. We have no access to the future or the past. Our
notions of future and past all reside in the now, along with everything
else. Time is a notion that connects two non-existing positions.”
This post is congruent with my belief that time exists as a notion;
as a fiction. But when you posted:
“I do not claim to own any time, and do not think
it even exists …”
I felt a necessity to ask you: how?
My thoughts about it:
Time does not exists as people usually think about it; time exists as a
notion or as a fiction; but it does exists as one;
We cannot say something does not exist only because it is a notion or a
fiction, since even notions and fictions exist or else we could not
Ex: Terminator 2 is a fiction; a group of people conceived it and
translated it to images and sounds using a movie structure. When the group
of people built that fiction, that same fiction began to exist, as well as
the movie, and we cannot say that the fiction T2 does not exist, because
it does, as a fiction. We can see that fiction evolve in front of us using
I cannot understand how we can create things and, even though we have
created them, they do not exist.
Ex2: S&P500, like all averages, is a fiction. It is a fiction that is
used to measure the evolution of the elements that constitutes itself.
However, though it is a fiction, or a notion, it started to exist in the
moment his creator create it. Today, people even trade that notion because
it is a notion that really exists.
I always believed time is a notion similar to an index. We have created
the notion, the fiction or the concept of time, which is an index that
measures the evolution of all things that constitutes it. Different people
have created different ways to measure or “quote” this index. First,
there was the “day-night” measuring system; then the “autumn-winter-spring-summer”
and even the “distance-light-travels” measuring system.
It is like
quoting the S&P500 in different currencies. We can do it in infinite
ways, but we can only measure it because it does exists, as a notion or
fiction, but it exists.
What is turning my mind around, right now, is “how can Ed say that time
is a notion (and as all notions, it exists as one) if Ed also says it does
I agree with you when you say we cannot spend time, give time, save time,
since we cannot spend an index, give an index, save an index, buy an
index; if we say that we can buy the value of the index, we are talking
about a whole different thing. It is not about the index itself, which is
a fiction; it is about the value people see in it.
I always thought that when people say “Thank you for your time”, they
were actually trying to say: “Thank you for your attention”, but they
cannot actually say it like this, because the concept of the index “time”
and the value of it (that can be translated into the things we actually
can do, or can give, or can spend) is mixed up by society.
thank me for my time, they actually are thanking me for doing something to
them; for devoting my mind or my work to them; for stopping doing the
thing I was doing to help them in anyway; and this is the value they
appreciate, not the “time”, although this is not clear to them.
This thought drives me to the conclusion that time is not the sum of all
moments, but only an “index” created to make people acknowledge the
evolution of all moments, and thus it is only a fiction.
But I cannot
understand how this fiction does not exist, in your conception.
Interesting: I stopped writing this e-mail to lunch and while I was
lunching, I asked my father, who is 68 years old, “Dad, what is time for
you”; believe it or not, he said “Time is only a reference”. I like
talking to older people… they usually have developed a life wisdom that
is very interesting to learn from.
You really provoked me to think about it and I appreciate if you can
elaborate this subject a little more. Your mind is a very complex mind,
Ed, and sometimes I get really amazed with the fact that there is actually
a mind like yours out there with all this knowledge that may turn lives
upside down with its deepness.
Thank you for your attention.
things that exist, exist in this moment of now. While the concept of time
may exist in the moment of now, time may not.
trading and in life, you cannot act in either the past or future; you can
act only in the moment of now.
Clocks a la Dali
Sat, 21 Aug 2004
FX and Help
I'm looking for
someone who is currently trading Fx on a computer system. I need help with
the basics of computer operation and hopefully someone who is doing well
trading Fx thats willing to help. This request is probably a long shot but
it never hurts to ask.
does not publish the identity of contributors or reveal personal
information. See Ground Rules.
Does Not Publish
identities of contributors