Questions

(Quotes from Ed in Red)

Answers

Tue, 10 Feb 2004

Thoughts on Ultimate Puropse

see: Role of Speculators, Jan 31, 2004

From reading the January 31st post on the trader's role, I offer the following:

The question 'what is the ultimate purpose of trading?' is basically another way of asking "why".

The writer is looking for a cosmic answer, looking for Truth with a capital 'T'. A noble question, but one which, like all ‘why’ questions, ultimately does not resolve within the ‘why … because’ loop.

The memory-programmed part of the mind which asks "why" is not capable of understanding the ultimate answer, but only capable of asking more follow-up ‘why’ questions, likes kids do on long car trips, linking the memories of answers together.

Every 'why' question really boils down to "why am I in this situation?" but takes many forms: "why (a) did that stock go down (b) didn't my system work (c) am I here (d)  ... etc." 'Why' is essentially always a cry for liberation from one form of ignorance or another. As a vaccine for the burning feeling of ‘why’, one might ask oneself ‘why ask why?’

These deeper questions about life might be better addressed if some of humanity's basic intentions are unbundled. A straightforward way with ancient precedence is to declare four root intentions of human life: love, wealth, duty, and truth. So unbundled, answers become apparent:

Love: We don't trade to experience love. The market is not your girlfriend, wife, or mother, unless you had a very twisted mean mother. Fulfill this goal somewhere else.

Wealth: We trade for wealth The market is a place to fulfill this one goal. That's it. For wealth we can chop wood, carry water, make trades.

Duty: Each intends to fulfill societal duties. Each is in some situation where duties arise. One can also agree to additional duties. Duties to one's tribe, country, town, family, oneself. Not much to do with trading per se, except that fulfillment of the goal of wealth makes one able to then fulfill other duties in a grander way, and fulfilling duties keeps one’s mind clear enough and free of guilt so as to make better trading decisions. Right livelihood can be a part of duty, following our calling, or having a talent for one’s work, motivated from a deep vision of how one’s duty fits in with the world.

Truth: Finally, the goal of experiencing Truth is most seriously pursued by turning away from the marketplace which is always changing, looking for and finding That which is unchanging. Many express this search for ultimate truth by researching smaller truths: A trader, for example, looks for a holy grail system. A scientist, for example, manifests this human intention to find truth by looking for it in his science. He may discover many useful truths about his subject along the way, experience temporary fulfillment, on his way to the ultimate search and recovery of the truth about himself.

The FAQ writer is feeling the need to fulfill these other human goals in life, and is trying to see if that can be done through trading. Essentially, trading is one of the more fascinating ways to acquire wealth. Not love. Not duty. Not truth.

Parsing one's basic human urges and fulfilling each brings contentment, and undoes that mental frustration which arises when mismatching expectations, attempting to fulfill one intention through the means of another.

For example, another big confusion is when one seeks truth in love. That creates mismatched expectations too. Enjoy love in love. Love is warm and fuzzy. Truth is elsewhere.

Celebrate trading for what it is, a means of gathering wealth, an honorable goal, then get on with fulfilling other life goals.

Debugging and recompiling one’s personal operating system in this manner may lead to smoother multi-tasking threads of life’s experiential data flow, and provide a concluding return( ); of the 'why' mental loop. This is my understanding.

Trading for many is introspective, one-to-one with the screen, almost like a meditative monk in a cave.

Yes, from intentions = results,

Your intention for trading is accumulating wealth, so your result of trading is accumulating wealth.

Fundamentalists are Whys Guys.

I see your four, maybe more.

Four of a Kind

beats two pair

Clip: http://www.earlyfishing.com/

14wcphoto.html

Tue, 10 Feb 2004

Sounds right, and timely, too.  I wonder if you could study this, and suggest how to do it, what options to elect and how it can benefit FAQ readers.

Tue, 10 Feb 2004

More Kelly

see: Kelly, January 28, 2004

Hi Ed,

Let's try the coin flip example using my Kelly formula.

If heads, win $2.
If tails, lose $1.

Kelly = Average Trade / Average Win.

The average win is $2.
The average loss is $1.

The average trade is a win of $2 followed by a loss of $1 in 2 trades. So I gain a total of $1 every 2 trades. Therefore my average trade is $0.50. I may need to average a lot of trades to learn this.

$0.50 / $2 = 0.25 Kelly bet size.

You used $1 for average trade, but that is the average loss, not the average trade.

I get the same answer with variable bet size.

The statement, that the average trade is $.50, is ambiguous.

A trade is a transaction involving a series of steps. Fifty cents is an amount of money.  They can't be equal.

The ambiguity resolves with, for example, The Average Payoff of the trade is $.50.  The Bet of the trade is $1.00.

Note that the Kelly  solution, a 25% bet size, is far larger than industry standard.

When you factor in the organic part of your trading system, you might come up with a much lower, more palatable solution.

Make Sure The Additional Risk

Makes Sense

Clip: http://www.maertens2.com/

Tue, 10 Feb 2004

Radial Momentum FAQ

Dear Ed,

although I'm neither physicist nor mathematician or engineer, I really find
your theory of "Radial Momentum Accounting for Lift" very interesting. That said, I think the e-mail from June 17th, 2003 from "A University Physicist" is exceptionally repelling.

(See: http://www.seykota.com/

rm/FAQ/index.htm)

(Quote) "I am not saying that the small effect is non-existent. I am just saying that, being small, it is not very interesting, and this is why nobody cares ... You may think that this tendency to idealization and neglect of small features of the reality in the favor of clarity and simplicity is just my personal trait. First of all, this is indeed my trait, and I am happy about that. Second, this is the very essence of science. The scientist who can do this idealization and abstraction from non-essential features the best - is the best scientist (the same in trading). This is not just my personal view, but, rather, I would think, view of scientific community ... "

For me this viewpoint suspiciously smells like Karl Popper's Immunizing Stratagem at work: The Bernoulli Principle applied to the accounting for lift doesn't quite work. So you just neglect "small features of reality in the favor of clarity" and alas, the theory becomes immune to refutation. As it now cannot be refuted, it proves valid, right? Now how's that for a scientific approach?

I also think the writer's reference to trading is quite telling and this coincides with an observation I often make with clients who have an academic background.

The more thorough (or better) it is, the more difficult it sometimes seems to be to transport even the most simplest principles (such as trend following?).

Instead they like to retort to fundamental analysis (which has it's merits, stocks have to be priced and sold to be available on the market in the first place, but that's another story) and a great number of other complex strategies.

The greater the number of unknowns and variables, the more difficult it obviously becomes to refute or falsify a strategy, thereby creating the illusion of it becoming valid. "Small features of reality" are again "neglected in the favor of clarity". I just love it.

Trend Following and Radial Momentum Theory both hold that things in motion tend to stay in motion.

Radial Momentum Theory confronts  the physics of lift that appears in most high school and college physics texts, and on the FAA exam.

Conventional wisdom uses Bernoulli's Principle to explain lift; I claim it just does not apply.

-----

Bernoulli holds only for air that is non-compressible, as do tractable versions of Navier-Stokes Equation.

Radial Momentum Theory claims that compressibility is at the very heart of the lift phenomena.

-----

Part of the persistence of Bernoulli in lift physics is that there is, until now, no replacement theory for it.  Another part is political inertia.

Basic Science  (the deep core  stuff) changes very slowly.  I suppose that in about 30 years -  enough time for young scientists to replace the establishment - Radial Momentum Theory may find a place in the textbooks.

Cultural beliefs and myths give flavor and charm to a society.

Gandhi

You must become the change

you wish to see in the world.

Clip: http://www.abundantworld.com/

Tue, 10 Feb 2004

Your intention to win in the long run might include the willingness to take small losses in the short run.

Aversion to loss can lead to:

Experiencing loss (and seeing its positive intentions) can be part of the process of minimizing loss, in both your trading account and your psyche.

Expressing Loss in Song

You are my Sunshine,

my only sunshine

you make me happy

when skies are grey ...

... and now you've left me

and found another

you have shattered all my dreams.

Clip: http://skywise.critter.net/

Mon, 9 Feb 2004

Mon, 9 Feb 2004

Primate Programming

Chief Ed,

It appears you have a very immediate, well-developed sense of humor. Accordingly I think you might enjoy my little web project.

If your company succeeds in displacing humanoid programmers with primates,  you might expect strong lobbying efforts to protect the status quo.

This might appear in typical political disguise.

Look for an Animals Rights to Fair Wages initiative.

Amphibious System Designers

know how to get the bugs out

Clip: http://www.maertens2.com/

Mon, 9 Feb 2004

TTP is a Trend Following approach to communication.

Correctness is incidental to TTP.

Sun, 8 Feb 2004

TTP & Parenting

Ed,

It seems in parenting that I seek to experience my repressed feelings by recreating them in my children.

I am not certain if that is a significant distinction, or if it even matters.

I recall times in the past when I spanked my children and felt satisfaction as I witnessed their fear and sadness.

Congratulations on your willingness to see this, to experience it and to disappear it. 

As it disappears, you and your family stand to gain greatly.

Spankings get Handed Down

from Generation to Generation.

Fully experiencing spanking

is one way to break the cycle.

Clip: http://www.angelfire.com/comics/

Sun, 8 Feb 2004

Sun, 8 Feb 2004

Sat, 7 Feb 2004

Celebrate

Dear Ed,


The more I practice TTP, the less I have to say.

Consistent with your self pro-claimed intention, TTP itself might one day dissolve into just another of my passing AHA's - providing yet another proof of results = intentions.

Hoo-Woo: Celebrating a Homer

Woo-Hoo: A Homer Celebrating

Clips:

http://sportsillustrated.cnn.com/

baseball/mlb/news/1998/09/07/

mac_61/lg_watching_ap.jpg

http://www.realitymouse.com/

Yes, to the extent you mirror the substance, tone and texture of FAQ, you help create it's disappearance.

Experience the Dot

and notice the haze vanish

Clip: http://redwood.ucdavis.edu/bruno/

psc129/figures-demos/gray-vanish.jpg

Sat, 7 Feb 2004

Too Much to be Interesting

Ed Says:

Very interesting !

Sat, 07 Feb 2004

Opportunities and Awareness

Sometimes we are sitting on top of great opportunities in commodities and we aren't even aware of it.

Texas toilet starts gushing oil

Woman returns to crude-covered home

Clip: http://www.msnbc.msn.com/

Thanks for flushing out the facts on this one.

Sat, 7 Feb 2004

TTP in Portuguese

Ed,


I have made a translation for the Process, into Portuguese, at [URL].

Fri, 6 Feb 2004

Amygdala, TTP and Non-Verbal Studies

Mr. Seykota / Chief Ed,

I thought you might be pleased to see this intriguing web site I found as a result of searching just one word on the TT site, the word is "amygdala".

It's a very interesting page:

http://members.aol.com/

nonverbal2/amygdala.htm

#AMYGDALA

... is under, and leads to: The Center For Non Verbal Studies (overall) Home

http://members.aol.com/

Fri, 6 Feb 2004

Date: Fri, 6 Feb 2004

Contributors to FAQ are anonymous. I do not release their names or forward mail to them.

FAQ Contributor Profile:

Anonymous

Clip: http://www.doppelpunkt-pe.de/

Fri, 6 Feb 2004

Why Get Slaughtered

Dear Mr. Seykota,

Why be a trend follower when "followers" in general get slaughtered?

I hardly believe in the instinct of a player and I strongly disagree with what some people say about being given the key to inspect the market by someone who already has it, like for instance the "turtles."  (a couple of clones who inherited a wizard's secrets).

Do you really believe that someone may learn how to be a trader without having the instinct in him?

I am only 20 years old, I still study in college and pay my tuition, I have traded for about 2 years now and I have spent hundreds of hours analyzing the weaknesses and the strengths of the market (parallel and opposite indicators, reverse effects etc.) but what troubles me is the fact that I feel like I haven't shaped any solid boundaries yet because I don't know how to shape them.

Mr. Seykota, what should I do in order to become more technical and critical in terms of speculating and choosing stocks? I have made some very interesting picks during my trading carrier but I still fell like a hog who might get slaughtered any time.

TTP avoids use of the "Why's Guy's" word, why.

You don't post any evidence for your premise that followers get slaughtered.

You might take your anxiety about following and getting slaughtered into TTP, as a starting point.

Bridge / Slaughter House

(Builder unknown, c1872)

Clip: http://www.virtualvermont.com/

coveredbridge/slaughterhouse.html

Fri, 6 Feb 2004

Tales from the DIM  Process

(D-o I-t M-yself, without a Tribe)

I find no happy judge Doing It Myself. I locate feelings and judge them to be uncomfortable.

I accept the discomfort and attempt to focus on the physical properties of the feeling. I find it very difficult. I frequently drift off into memories and visual images that seem to accompany the experience.

These memories and images often point me to episodes, whether real or imagined, that alert me to my moral weakness. That is, the feelings I judge to be ‘bad’ seem to be ones in which I give in to pride, vanity, deceit, coveted ness.

It seems that the positive intention of some of my feelings is to keep me on the path of moral righteousness.

I’ve managed to open up a big can of worms with the DIM Process. I am quite Judgmental.

I cannot tell whether I am making my situation worse in the absence of a tribe or adding to my drama. I am committed to experiencing my feelings, yet I acknowledge how much limitation there is utilizing the DIM Process.

Yes, trying to do it all by yourself may layer-on more judgment.

Your Tribe can encourage you, validate your feelings, and help you find positive intentions for the feelings you don't like.

Pride, and Your Other Feelings

can have Positive Intentions

Clip: http://www.barnsley-bs.co.uk/

pics/pride.gif

Fri, 6 Feb 2004

Bugs

Fri, 6 Feb 2004

Your insistence that "void" have a color or temperature may indicate unwillingness on your part to go to "void" with the sender. 

You might try these:

Just be there, endlessly, with void, for an indeterminately long moment of now. That's kind of how "void" is.

Or, validate, with: "Great, keep coming up with more ways to avoid going into your feelings."

Or, ask the sender if he is willing to experience "void."  If he says yes, encourage him to act out the experience of "void." If he says no, ask him to locate the judge (feeling) that holds that unwillingness.

A stuck sender indicates a stuck receiver, and an opportunity for both to work through the issue. 

In tribes with several members, others can step in and receive the stuck-ness from both the sender and receiver.

To escape the Void

try

a void dance.

Thu, 5 Feb 2004

Traders and Gamblers have a place, especially in Nevada.

To hear a question to Pilgrims

about uneasy feelings,

Click Here

For directions to Nevada

from Florida,

and things to do,

Click Here

I am now planning to deliver another seminar, sometime this year.  If you can't wait until then, you can take your feelings of impatience into TTP - or see about Private Consulting at the bottom of the FAQ Home Page.

Clip: http://www.wavsource.com/

Thu, 5 Feb 2004

OK.

Benjamin Disraeli

In Support of Chartists

and Corn Laws

Clip: http://www.lib.utexas.edu/

Thu, 5 Feb 2004

Quote

Thu, 21 Aug 2003

Ed Says:

I don't know of any study about a fear / hope : commodities / stocks model.

Thu, 5 Feb 2004

Positioning is a function of the rest of your trading system. 

Thu, 05 Feb 2004

Fort Lauderdale Tribe

Welcome

Fort Lauderdale !

See: Tribe Directory

Life is a Beach

Clip: http://www.usmusicvault.com/

Wed, 4 Feb 2004

Wed, 4 Feb 2004

Wed, 4 Feb

Trading Mistakes

Overtrading ...

I trade intraday breakouts, a real simple system: trade 55 periods breakouts on 5 min charts, take a stop (test it) and get out just before the close ... it works on a lot of futures, so I am satisfied with it.

When you follow a system sometimes you get bored ... 4 or 5 years ago I traded only discretionarily and was a "break-even" trader, with a lot of "concentration" stress.

You watch the system do its work, and you get bored, so you think: well I see an (arbitrageur) opportunity and enter the market with a stop.

Then you lose, again, you lose again, again and again, you don't accept the loss and you keep on seeing new chances to make money.

I don't know how to test a stop without executing it.

When you are willing to experience boredom, it passes through. 

When you are unwilling to experience boredom, Fred finds ways to make your life interesting.

Invitation to Fred

Clip: http://www.football-crazy.de/

archiv03/1l03sp25.htm

Tue, 3 Feb 2004

Visit to NYC - All Day Session

Every Tribe has its own way.

Cross-pollination between Tribes is a good way to share methods and extend the work.

TTP b

Wed, 04 Feb 2004

More Questons

see: Questions Jan 16, 04


Dear Mr. Seykota,

Ed Says: 3. The market conditions are: up; down; sideways. The appropriate
corresponding trading postures are: long; short; out.

If the trend is already in progress, one way to get on board is to enter a stop order just outside the recent trading range.

If a trend is not currently in process, you can enter a stop order outside the long-term trading range.

Trend Followers

buy on penetration of resistance,

sell on penetration of support

 and ignore targets.

Wed, 4 Feb 2004

Useful Gauge

Hi Ed !

Here's a useful gauge for trading dashboards if there is no more precise measurement available.

Other popular feeling meters are the neck, the forehead and the gut.

Scientific Investigation

of Experience Storage Sites

Clip: www.ozone8.com/

Wed, 04 Feb 2004

TT Phoenix

Ed,

The Arizona Trading Tribe is currently a tribe of two. [Name] and I met for the first time yesterday and discussed our understanding of TTP. We will be holding our first TT meeting on 2/13/04.

Congratulations on getting a Tribe up and running.

For words of wisdom and stimulating questions, see contributions on the left side of the FAQ pages.

Wed, 4 Feb 2004

Two Silly Observations

1) FAQ = Frequently Asked Questions is passive tense as it masks the persons
who are asking the questions

1) The S in SVO-p refers to the subject of the sentence, not the name of the author.

2) I find no quotes for symbol, FAQ.

Mon, 2 Feb 2004

Man or Machine

Dear Mr. Seykota,

First, I would like to thank you for all that you are doing! I just recently joined the Salem, Oregon Tribe and we just had our first "hot seat" meeting last Saturday. I have two questions:

Do you have or are there materials available that will help us to be proper receivers and senders? I want to get the most out of it and would appreciate any guidance or additional direction.

Secondly - once a person has put Fred into place, are a lot of the systems out there sufficient or are only a small number of them actually successful over the long haul.

You can find a lot of material on this site.  I am now working on a book about TTP, for publication later this year.

One of the best ways to master receiving is to keep trading roles, sending and receiving, in your tribe meetings.

The place in which you might put Fred is in close communion with CM.

Mostly, people use their systems to deliver what they really want.

Mon, 2 Feb 2004

An AHA about AHA's

Mon, 02 Feb 2004

2004 Proclamations Update -

and typo correction

I wish to correct several typos in my previous submission. As there are several, I will resubmit the entire letter below.

I will also take into consideration your yet to be made suggestion of examining my feelings concerning thoroughness and taking the time to do things properly.


-----

Dear Ed,

As always, I give my permission to publish all, some, or none of the following: I am writing in to give an update to my 2004 proclamation.

Similar to my equity curve, my commitment to my proclamation experiences some drawdowns, but overall the trend is UP.

I am one of the tribal chiefs who are waiting for a tribe to appear, so I am not yet able to enjoy the process in a group setting. My understanding of the Tribe and the process comes from reading FAQ. Before I started my tribe, I had feelings of nervousness and trepidation about what would happen / what if no one shows up? (Tightness around the chest & tingling like little needles across the back of my neck, skin tightening along my forearms.)

I believe intentions = results.

So I start my tribe and almost instantaneously find my answer.

I am a part of tribe, currently a tribe on one. I am a part of another tribe, my family. I am also a subset of a larger tribe, the community I live in. In this way I am also part of the tribe that is FAQ.

Allowing myself to feel the fear of being a tribe of one, (by taking the action and directly experiencing the feeling) also has allowed me to experience the joy of being a tribe of one.

I don't mean to sound trite about this; but it has been profound for me. As soon as I allow myself to feel the feeling (hit ENTER to send email) I move on to the next emotion. I feel I am a tribe of one. I am a trader, and I follow trends. All of these feelings feel good to me. The tingling in my neck, arms and chest pass, and is replaced by a feeling of lightness. Less gravity is the best I can say it. I could go on but I think I have made my point. I offer this to the community in that it may help someone else who is on the verge of declaring their tribal affiliation. I have received many insights from reading FAQ and I wish to contribute.

On a related note: Since I resolve the drama of wanting to be part of a tribe, I am moving on to new feelings. Being a good receiver is something I practice now continually. I originally think I need to be a good receiver so I will recognize my tribe when we meet. The unintended consequence is so much more wonderful! My tribe is still out there in the non-existent future. I am here receiving what is in front of me in the present. And as Maxwell Smart used to say, "and loving it". There have been many small AHA's from receiving my family and community. There is great joy for me in noting how easy this is, once I stand aside and let it happen. I also  notice that the people I encounter seem much happier to be received.

Lastly, I offer up the example of the traffic lights. Specifically, the cross-walk indicators. Another of my proclamations is to be true to my system and follow signals.

Upon deciding to receive my surroundings in their entirety, I discover that the cross-walks are talking to me. As we are all aware, they talk to everyone but most people don't listen - they just cross when they see and perceive an opportunity. I believe this is how most people trade. But I have a system and sticking to the signals is a big part of it. So I resolve to pay attention to the signals and follow them. So easy to say, so hard to do. Until it isn't.

In the beginning I stare at the signal, waiting for it to turn green. As you would expect, people all around me jump the signal and start to cross. One goes, then two more, then five. It is herd mentality at work. I feel the crowd working on me, urging me to violate my signals. To me it feels like being at the beach in the water facing the shore, and a wave comes along behind pushing me along with the crowd.

By experiencing the signal, I feel the crowd. I let myself feel the pressure on the back of my legs. I practice. I look forward to signals for a chance to practice my "signal - patience".

I celebrate the pressure on the back of my legs. It becomes easier, and the tension passes. I like waiting for signals now. I still feel the pressure on the back of my legs when the crowd starts to move, but
it is not as intense, and I feel lighter while I wait. “ Less gravity," again.

Yes, you can practice receiving, just in the process of life itself.

Attending another tribe for a while and attending a workshop are other ways to get the hang of the process.

Sun, 1 Feb 2004

Family Tribe

Ed Says: When you release having to control others, you set yourself free.


Yes!


Ed, yesterday we made our eighth meeting and feelings started to flow. As I grant complete freedom to others I start to find freedom for myself. Thanks.

Your remark is quite punctual as I happen to be involved in a long-standing recurring power struggle drama with someone else.

You might consider what is standing between you and converting your power struggle (pushing against someone) into personal power (pushing with someone).

Plenty of Power

when you work together