from Ed in Red)
Sat, 31 Jan 2004
Role of Speculators
Sorry, what I meant was What is the ultimate PURPOSE of the successful
----- Original Message -----
What is the ULTIMATE role of the successful speculator? (Apart from to to
help raise capital, pay taxes, provide liquidity and keep brokers and
bankers in the money)
own intentions give life purpose and meaning.
Tribe can help you clarify your intentions and create your path of right
the Trading Tribe
Fri, 30 Jan 2004
The Younger Days
Congrats on your work and devotion.
In this forum we talk about different people, but what about you?
I have a few questions, and if you don't want to answer any of them - I
understand - no problem - privacy...
Some say "concentrate on the goal", I say "concentrate on the
goal AND the way you get to the goal". For a young man, like me (and
probably many others), I wonder what were you like when you were young, how
did you get there, where You are now.
I am curious:
1) when was the first time you made a trade?
2) why and how did you decide to be a trader instead of let's say being an
engineer, what was your motivation?
3) when did you posses the knowledge about fractals and found out that it
can be applied to the markets?
4) from which source did you learn the most about the markets (else than the
5) did you have a regular job, did you work within a financial institution?
I don't know if I can ask this question, but just in case I'll post it 4)
did You have hard times, when you didn't know what to do, which direction to
5) when you were 21, were you more interested in the science&books etc,
or the girls&party?
I hope You don't consider me as too daring, but I really would like to know,
so I am taking the chance.
Dziekuje, (Thank You in Polish:)
First trade I remember: giving an aluminum commemorative coin and getting
five magnifying lenses, circa age 5.
I do both. Software engineering and trading can be complimentary.
I view fractals as a market metaphor, not as a particularly rigorous trading
I consider the markets to be unknowable. I study myself and my systems and
how to clarify and focus my own intentions.
I put a lot into the institution of The Trading Tribe - or maybe writing FAQ
is putting me in an institution.
Some positive intentions of uncertainty and confusion: to guide
research and innovation. Innovators seem to like the feeling of
I recall liking to party with girls who read science books.
Fri, 30 Jan 2004
Thar she Blows !
This whole whale mess could have been avoided had he taken his feelings to a
tribe meeting. TTP, a better way to spill your guts.
investigators claim they can commune with dolphins.
send and receive feelings
Fri, 30 Jan 2004
Tribe Contact in Connecticut!
Dear Chief Seykota,
I have two questions for now.
1) Who is the contact person in charge of the Trading Tribe in my state,
Connecticut? An e-mail sent by me to the person in New-Haven was returned as
2) How can I get
hold of your book: The Trader's Window. This book was referred in a talk by
Sri Harold Klemp, Spiritual Leader of ECKANKAR. I have search in vain for
this book but can find it on the web or local bookstores.
Thank you for taking time to read my e-mail and I look forward to a
favorable attention and feed-back.
you do not find a responsive Tribe Leader in your area, you can start a
Tribe of your own.
book in not in print. I have a copy at my home, that people may read,
while they are here.
Thu, 29 Jan 2004
An old TTP session from 1989
I am writing you to re-make your acquaintance. We met at a Van Tharp seminar
in Chicago in 1989, at which time you guided me through a TTP session in
front of the group, and where we also shared a private conversation.
Although we ran
into each other on two separate occasions the following year, I did not take
the initiative to continue our earlier discussion. Accordingly it is my
fault (and my loss) if I drifted out of your memory long long ago.
I would have liked to have gotten to know you better as it is not often that
you meet someone that understands the feeling of being on the razor's
edge of life.
I think you know
what I mean by that. It is the detached, surreal and primal feeling where
the usual duality between man and his universe breaks down - you become part
of and one with the universe. If you allow yourself to feel this
sensation, there are no more good or bad experiences, just events that allow
you to revel and grow in the sensation of being on the razor's edge of life.
Fear and anxiety dissipate in the calm tranquility that begins to permeate
A few years ago I met Norman Lear at the TED conference in Monterey www.ted.com
- fascinating people). He recounted that early in his career, before his
success with "All in the Family", he had some modicum of success
and decided to set up shop in New York with lavish surroundings and
He soon found that
he had overextended himself at a time when he could not produce a hit
series. Yet he mentioned to me that on the day he was being evicted from his
office with nothing to his name he did not feel despair, anxiety or anguish.
Rather, he said
(paraphrasing and possibly embellishing from memory), "All I could
feel was that life had given me a gift. I felt a thrill and elation in that
I was able to experience this too, the feeling of losing everything."
Clearly he had
opened himself to to life's wondrous experiences, and his life is a
testimony of what is possible. I thought you might appreciate that story.
Ed, If you are so inclined, I would greatly appreciate hearing from you. I
would like nothing more than to bask in a conversation about life in general
with you. I will be in my office (toll free at xxx-xxx-xxxx) on Monday and
Tuesday next week (Feb 2&3) and at my home office (xxx-xxx-xxxx)
tomorrow Jan 30 and Wednesday to Friday of next week. We can try to arrange
a time for a phone call via e-mail if that is more convenient.
prefer communicating about the work by email, to document the work and to
allow others to listen in with their eyes.
Ye, Ear Ye
Wed, 28 Jan 2004
I read the recent Kelly posts. Maybe I can clarify them. I think he is
trying to say that Kelly can be expressed as Average Trade divided by
Average Win. K=E/W, where K is the Kelly fraction of the account to bet, E
is Average Trade, and W is Average Win.
If I had not worked out the algebra myself before reading the post, I doubt
I would have understood it.
On another topic, I participated in the first Denver Trading Tribe meeting
January 24 as a receiver. I clenched my fists and gritted my teeth and felt
the anxiety and tension of staring at the screen as a trade goes against me,
or against the sender in this case. Immersing myself in feelings is new for
me. We had a good first meeting, and I look forward to sitting on the hot
My own trading is so long term that I do not stare at computer screens,
except to write code to backtest potential trading systems. One or two
losing trades do not bother me, but when they pile up above 20% drawdown, I
feel uneasy. I have to force myself to follow my system. I write code and
backtest everything I can think of. I search for other markets to trade. I
work out the mathematics of drawdown. Most of my learning has occurred
during drawdowns. When I am hitting new highs, I feel on top of the
world, follow my system with joy, go snorkeling in the Caribbean, and drink
a Pina Colada while watching the sunset over the ocean.
Despite the pain of inevitable drawdowns, I have followed my long
term trend system on commodities (it doesn't work on stocks) without
breaking my rules for nearly 4 years. It has made me more money than my
engineering job in that time. At the end of February I will cut the cord,
ending my formal employment, leaving my time free to develop new trading
Thank you for starting the Trading Tribe, writing FAQ, and giving me some
things to think about.
the Coin Flip Example from the Risk Management Page, your coin can win 2, or
from your simplification of Kelly
Trade (Wager) = $1
Win = $2
K = 1/2
the full Kelly formula, and other methods all indicate an optimal risk of
1/4, so there is something a little loose here.
might wonder how you know that the feelings of drawdowns are really painful.
you might wonder if you like the markets running your personal life - as you
can only do fun things, like snorkeling, when the markets are up.
about just do what you want and allow your feeling about the markets to pass
can pass through
a river passing through
Wed, 28 Jan 2004
Reasoning Out Loud
I assert that a trading system is not (a necessary and sufficient condition)
to trade trends for profit.
Though, a trading
system is necessary to trade trends for a profit. I then ask the question,
"What is sufficient?" Sufficiency is found in TTP.
TTP, though vague,
must influence intuition. Thus trading systems are not the mechanical
authorities, I imagine them to be. They are augmented by some thing else
either outside or inside the system. It must reside outside the system. If
it were inside then the system would be complete and could not change—it
would be perfect.
Looking back to
risk management, I see hunch systems mentioned. In the final analysis, a
hunch system plays a role in the picking and trading of instruments.
I believe that hunches are the intended results of TTP.
you continue figuring it all out, you might become aware of the feelings
that propel you to do so.
are your feelings of wanting to figure it out.
out these feelings can be very challenging, since they may keep changing
while you are figuring them out.
just more drama.
Wed, 28 Jan 2004
Thank you for your recent reply. We have checked the system and cannot
see any bugs. I have enclosed several graphs to demonstrate the system
returns, drawdowns etc. You may need to view it at 200% magnification to
read it easily.
I read your reports and graphs correctly, then your Core Equity goes
from 20,000,000 to 120,000,000 in one day, your Sharpe Ratio is zero and
something you call Core Equity High DD % is -29.66.
might try turning on the lights.
See No Bugs:
off the monitor
program in the dark.
Tue, 27 Jan 2004
I think you may
find this interesting.
Candice Pert believes the body (not the brain) contains memories charged
with emotion. Also believes you have to 'speak it' ... see:
CP: Let the emotion all bubble up. Let the chips fall where they may. My
personal experience using catharsis was with the New Identify Process. I
think the NIP bonding might serve to relax the cortex and let the emotion
come through. I believe that the process of catharsis is not complete
without saying things, because we must involve speech and the cortex, to
know that the emotion has come all the way up and is being processed at the
highest level. To feel and understand means you have worked it all the way
through. It's bubbled all the way to the surface. You're integrating at
higher and higher levels in the body, bringing emotion into consciousness.
some, verbal expression is in tune with the process. For others,
kinesthetic body sensations work well. Others find visual elements
enlightening, and tactile sensations stimulating.
experience often has multiple anchors, in various experiential modalities.
good receiver goes with the sender's experience, wherever it goes, and in
whatever mode it presents.
more you work out in your Tribe meetings, the less you have to do in public:
to practice receiving
a verbal-mode sender.
Tue, 27 Jan 2004
Hope you had a good Christmas and New Year.
Just read your response to the post about the results from my system. I did
have an error in the code and it is now rectified. Many thanks.
I enclose a copy
of the results from my latest system. I can't see anything obviously wrong
with this version. As always, if you have any questions or comments about my
system, then please don't hesitate to let me know.
drama seems to be to release buggy code, to have others report problems with
it, and to generate yet another fix in a hurry.
might take your feelings about making an effort to get things right,
like your software, as a starting point, into the process.
"OK to release";
"Stick with it, don't quit it.";
Tue, 27 Jan 2004
I have been trying to incorporate the TT process into my family life. I
am having trouble getting my son to understand the process. When he
becomes upset at
something and losses control of his emotions, I try to tell him to embrace
these feelings. But he says he doesn't know how to embrace what he is
of TTP is not to insist other people use it.
you focus on being a good receiver for your son, he may just fall into it.
you give up trying to control your son (getting him to understand the
process, to stop being upset, to stop losing control, to start embracing his
feelings) you give him room to change, and set yourself free in the process.
son might be doing the resistance part of a dance that is very familiar to
both of you,
you experience your own feelings about what you want your son to do, your
part of the drama may disappear, and the dance may also collapse into a more
meaningful and satisfying communion.
the audience goes home.
Mon, 26 Jan 2004
I have a question.
In my TTP with [Name] as below, I set forth a broad issue rather than a
trading-specific one: my tendency to "not begin things until so little
time remains that I do a hurried shoddy job."
process, I find various emotions and feelings relating to this. There is one
predominant feeling - that of a tension in and around the neck and
shoulders. This leads to some other feelings and emotions, eg, tightness in
stomach, irresponsibility for setting unrealistic goal, pressure on back,
We leave the words
and verbalizations aside and concentrate on the feelings -- all of them
dissolve but the original one (tension in neck) remains. Despite a fair
amount of time in the process, this tension does not go away. At that
point we are both not aware how we proceed, so I write this mail to you. The
tendency I brought to the process is not gone. I notice some other changes
though, eg, being more composed. This is our first TTP so perhaps we (I?)
need more practice. Any thoughts, advice, comments from you or FAQ readers?
might consider noticing the similarities and differences between:
to make a feeling go away.
it's positive intention.
former indicates a grumpy judge protecting the feeling. You might try
experiencing the feeling of not liking the tension. When that fades,
you can proceed to experience the tension.
Feelings May Judge
a Knot of Nots.
untie a knot,
loosen the outside layer
Mon, 26 Jan 2004
Hello Mr. Seykota:
My name is [Name] and I live in Reno. I recently listened to one of Van
Tharp’s taped seminars, and he mentioned The Trading Tribe. I did a web
search and was surprised to learn that you were just up the hill. Attached
is my resume and essay. I look forward to hearing from you.
B.A. in Anthropology ...
Occupation: Trader and investor.
Occupation Experience: I am a partner in a family owned [Type] company,
based in [Place]. I began trading in the stock market while in college.
After graduation, I began trading commodity futures. I have been a delegate
member of the Chicago Board of Trade. I am currently an IOM member of the
Chicago Mercantile Exchange, Inc. I have some experience with
neurolinguistic programming. I spent three days in consultation with
[Mentor] in an effort to improve my trading and my self.
Life Experience: I am an avid rock climber and skier and have traveled
extensively in the western United States in pursuit of these activities. I
enjoy foreign travel as well. I am recently engaged and I love to spend time
with my fiancé.
I am available for interview at anytime, but preferably between the hours of
7am-6pm. My home phone number, xxx-xxx-xxxx, is the best number to call.
Also, I will be out of town Jan. 31- Feb. 2. I look forward to the Trading
My Understanding of TTP
The Trading Tribe Process is an interactive process that objectively allows
us to observe ourselves utilizing a supportive, group environment. Since we
are all interconnected and interrelated, the more we understand ourselves
the more we understand each other. Therefore, the benefits produced through
TTP help us all.
“If you don’t know who you are, the markets are an expensive place to
find out.” The trading experience penetrates straight to the core of our
being. The intensity of this experience becomes the perfect environment for
Fred and CM to act out dramas. The Trading Tribe Process allows us to
resolve dramas without expensive lessons in our trading or personal life.
Most importantly, TTP reveals that trading life and personal life are one
and the same.
are welcome. Consistent attendance is essential. Next meeting,
February 5, 2004 - 7:00.
Mon, 26 Jan 2004
[cc to Ed / FAQ as an update subsequent to the second [Place] TT meeting.
For Ed: We had one
member unable to attend because of a medical emergency. This is a
communication to keep him in the loop]
Oh, one update on the meeting [Name] and I did. My issue was the feelings
that come up when I communicate with a prospective client.
My thoughts before
our meeting go something like, "They won't understand me. They will
think it's risky because I trade futures. They won't listen to me. They
might shut down and not understand how I manage risk" etc. These
thoughts are accompanied by various physical sensations like tightness in my
throat and chest, butterflies in the stomach, etc. I send these feelings in
the meeting and [Name] receives them until I sense them resolve and I no
longer feel them. No big AHA, they just cease to manifest.
Before our TT meeting, I wonder if my thoughts and feelings might suggest
that I have doubts about my abilities myself. An interesting side effect of
the process is my realization (really more of a gut feeling) that I don't
have those issues.
Instead I have
issues surrounding my perception of my ability to communicate my competence
to prospective clients. I also have the intellectual understanding that
these feelings manifest when I focus on things that are not in the now, and
when I worry about what "might" happen.
Today I have my first interaction since that time with a prospective client.
It happens so naturally that I almost do not notice the big change! I have
none of the feelings from before. I tell the person what I do. I tell him to
go to my website and read my disclosure document, and to give me a call or
email if he wants to proceed. I can't describe the feelings through all of
this except to say that I do not notice any whatsoever. I feel very matter
of fact through the whole thing. Just, "He needs some information. Here
is how to deliver it. Now he takes the next step if he wants."
Like I said, no real feelings associated with the actions. Perhaps there are
some feelings at the time, but since I do not get attached to them they
disappear. I am not sure. What I am sure of is that my performance is
improved because of my lack of self-consciousness about explaining myself.
I know this to be
the case, as the prospective client responds to me very positively and with
an inflection in his voice that conveys that he really does want to learn
more about my service.
similar to this where I focus on my worries, they do manifest with the
prospective client and the response is more along the lines of, "That
sounds complex and risky. I don't know about getting involved with some kind
of technical analysis charting mumbo jumbo. How do you know what you are
buying is a good value and not too expensive?"
This is an
interesting response considering that I primarily communicate with
supposedly sophisticated investors that I would normally expect to be
familiar with trend-following tactics. This illustrates that people give me
exactly what I expect them to, without too much regard for the range of
potential responses given the investor's knowledge level.
It seems that I do not have to change the investors or their sentiments
about what I do.
I can change my
perceptions by feeling my feelings, thus changing my expectations from a
focus on a negative outcome to a neutral awareness and readiness to respond
in whatever manner is appropriate.
This might allow
me to refrain from sabotaging a potentially productive relationship by
forcing prospective clients to doubt me, and instead allow those that are a
good fit with what I do approach unobstructed. The people that do not mesh
well with me and my style may self-select themselves out of the process
without any undue energy expenditure on my part. That seems like a win / win
At any rate, the TTP produces results so far for me. See you guys when I
return from the NYC meeting.
Judgments about feelings about confidence can lead to dramas involving too
much and too little confidence.
help you maintain balance
long as your confidence is in balance.
Mon, 26 Jan 2004
Trend-following in NBA
Dear Mr. Seykota,
Thank you for bringing trend-following in my life. I've noticed the changes,
and one of my goals for the year is to commit to continue developing and
improving trend-trading ideas, and then implement and execute them as the
Another area I have been practicing trend-following is my fantasy game on
NBA.com called "Virtual GM." Like any other sports fantasy game,
the goal is to pick players (under some cap constraint) that produce the
most. To me, the game is about optimization, picking the players with the
highest expected value under the given "salary." You don't have to
know anything about the NBA, and you don't need to know.
The added flavor is trend-following. There will be players who have sudden
streaks of hot shooting and playing extremely well for three or four games,
and on the flip side, some stars started to play poorly (usually a warning
of coming injuries). The true super-stars (like a strong trend) will tend to
rebound after some poor nights, while the mediocre (weak trend) will have
some great nights that followed by some poor nights. I've learned that it
pays to follow the ones who have been playing well, and not try to follow
the former stars who are out-of-favor.
I've learned not to question how long the hot streak would last. They can
go for much longer than expected. Kobe Bryant scored 40+ points in 9
consecutive games last season, and I simply rode his trend. There were times
I thought, "Hmmm, maybe he'll revert back to the mean soon," but I
decided to commit to trend-following and hang on until he cools down, and a
new trend emerges in another super-star player.
There is also a time when a star-player joined a new team and played poorly.
I was tempted to buy him, believing that he'll rebound. But then I felt the
trend is really down, and if I buy him then it'll be going against the trend
and bottom-fish. I ended up buying someone else who has shown a strong trend
instead of him. He has some very good nights and keep playing well. It is
true that I could have done much better with him on my team, but I am proud
of myself to stay with my game plan.
Trend-following is in many aspects of life!! Trend-following is fun!! If one
day I win the fantasy game because of the trend-following method, I guess I
should invite you to watch the All-Star game (that's the grand prize)
the laws of momentum.
Mon, 26 Jan 2004
Risk - Another
LIVING DANGEROUSLY - 1ST
For businesses, governments and citizens, misjudging risks can be costly. A
guide to better targeting, by John Smutniak.
SINCE September 11th 2001, it has become obvious to all that the world is a
risky place. Even before that atrocity, the world had seemed far from safe
to many, especially those concerned with business and finance. The end of
the dotcom craze and the bursting of the stock market bubble had already
created huge uncertainty. But those are only the most recent examples of
unexpected events that can make a
mockery of people's plans.
Today's perception of heightened risk is fostered by more than al-Qaeda.
Globalization, for one, has increased the sense of peril. Natural and
man-made disasters, including forest fires, earthquakes, big industrial
accidents and various transport calamities, have added to the feeling of
being under siege. According to a joint study by Belgium's Centre for
Research on the Epidemiology of Disasters and A.T. Kearney, a management
consultancy, growing globalization happened to coincide with an increased
frequency of both man-made and natural disasters.
Part of this fear is irrational. After all, earthquakes pay no heed to a
rise in free trade. What has changed is that telecommunications and media
coverage now ensure that such disasters are reported from ever more
But part of the perception of increased risk is justified. Some technologies
are indeed making the world a riskier place, creating new potential hazards
such as untried drugs and genetically modified crops, as well as innovations
that can scupper the best-laid business plans (such as Napster in the music
industry). Blow-ups of markets and firms often reflect risks in the real
world. Terrorism, or even rumors of it, can send fortunes sinking. A new
epidemic such as SARS can ravage an entire industry (in this instance, world
Despite such perils, for most people in rich countries life has become much
safer in a number of important ways. Over the past century their life
expectancy has risen by around two-thirds. Workplaces, the wider environment
and many diseases have become less hazardous. Democracy has spread. Wars in
the rich world have become less likely. Even terrorism has become less of a
worry in some places, such as Northern Ireland, Italy and Germany.
So it is not strictly true to say that life has become more risky; instead,
some risks have become smaller, others have shifted to different people, and
new ones have sprung up to take their place. This survey will review some of
these shifts in the burden of risk and explore an extraordinary phenomenon:
that when people confront risk, whether they are running governments,
businesses or their own affairs, they tend to mismanage it.
LOOK ON THE BRIGHT SIDE
Risk is different from uncertainty, which is unquantifiable. It is more of
an educated gamble based on the odds. Taking such educated punts has become
easier, thanks mostly to two factors.
The first is information technology, which has made it easier for people to
study many past risks in the hope of learning from them. For example,
life-insurance companies have looked back at records of births and deaths to
estimate lifes pans, create actuarial tables and set insurance premiums.
Thanks to computer models, the odds on a freakish storm or earthquake are
better known, epidemiologists are more successful at tracking diseases, and
even man-made crises such as banking debacles and stock market crashes can
be catalogued and studied to produce better (though, as we shall see, still
far from perfect) forecasts. Such technology is also providing better
information on the costs of such mishaps when they do occur.
The second factor that has made it easier to quantify risks is the
growing use of markets. Markets are especially good at shifting risks from a
party that does not want to bear them to one that does.
example, can move the cost of a house burning down from a home owner to the
insurance company and its shareholders. A stock market listing can shift
business risks from a single family to thousands of investors worldwide.
Risks, though, are not as easy to trade as bananas or cars. People vary in
their view of risk, and of how to value it.
For all the progress in using such tools, perhaps the biggest obstacle to
dealing effectively with risk remains human beings' perceptions and
misperceptions of it.
People tend to get
risk wrong in a variety of ways, often consistently. A growing awareness of
this has been revolutionizing economics. It has also been changing the way
corporations, governments and citizens deal with the risks they face. This
survey will argue that the largest gains will arise from coming to terms
with this softer side of risk.
More and more of the world's risks these days are taken on in financial
markets. Stock markets, which on one view are simply an estimate of the
future rewards of all firms discounted by their risks, have become more
volatile in recent years. This is partly because technology has made
financial markets more efficient, which makes them swing more quickly as the
economic outlook changes.
But not all of the volatility in the markets is a response to real changes
in fortune. In their eagerness to minimize the risks of financial markets,
investors sometimes exacerbate their wobbles. The sheer sophistication of
the instruments to manage the risks of market moves may, paradoxically, have
made them riskier.
biggest risk of all remains a very human emotion: panic, which can cause
markets to seize up completely because they are insufficiently liquid, as
nearly happened during the LTCM hedge-fund debacle in 1998.
Those wobbles in financial markets have led to a boom in derivatives
(meaning financial contracts--such as futures, options and swaps--derived
from the prices of other securities).
The chairman of
America's Federal Reserve, Alan Greenspan, thinks that this kind of
financial innovation is good for the global economy. It makes the financial
system more flexible, increases the potential rate of economic growth and
allows banks and businesses to control the level of
risk they take.
Yet many disagree. Last year, Warren Buffett, America's most famous
investor, called them "financial weapons of mass destruction".
Certainly the new market for credit derivatives, in effect a type of
insurance against bond defaults, is causing worries. And America's Freddie
Mac, a quasi-governmental mortgage underwriter, had to restate billions of
dollars in profits because of improper valuations of its massive derivatives
Around 90% of the
world's 500 biggest companies now use derivatives, according to a poll last
will argue that some of the worries over derivatives stem not from any
inherent evil, but from their power to disguise the intentions of their
Companies used to concentrate on the more easily spotted risks, such as
financial ones. Now, just as bosses have learned to use sophisticated tools
to manage financial risks, they are facing a whole array of new hazards.
Increased scrutiny of corporate governance after the scandals in America and
Europe has complicated their life. Increased regulation makes managing a
company a minefield. Globalization has intensified competition. Instant
communications and heightened media interest mean that a company's
reputation can be quickly and easily tarnished.
Governments have the most to learn about risk. Without a better grasp of the
costs and benefits of the rules they create to control it, they can do more
harm than good. In most rich countries they are still expected to take on
risks when markets fail.
Yet they have
been making bad choices: banning some activities that carry low risks and
potentially high benefits, and encouraging others that are highly risky
without offering much return.
One of the trickiest problems in dealing with an uncertain future is
people's seemingly irrational response to it. But advances in psychology
have given us a much better understanding of the way people behave in the
face of risk. The results are striking, as the next article will explain.
Much of the current growth in derivatives associates with people not wanting
to experience risk.
current fashion of our society is to avoid / suppress the feeling of
feelings tends to precipitate drama in which Under-Fred finds a way to for
the feelings to manifest.
example, the anxiety suppression (security) methods we use at airports don't
work very well and may actually increase anxiety.
you become willing to experience risk, you make wiser choices and life
becomes less risky.
shift it, say, to balancing
risk of getting there late
the risk of getting caught.
Sun, 25 Jan 2004
Hi Ed !
The recent days at your house included a lot of good things. One: the
graduation to professional musicianship. Another gem is the principle you
articulated that you don't want a company where you have to baby sit people,
follow-up on others' projects, or find out why people didn't do what they
said they would.
advice "do whatever you want" I perceive starts with the communion
of wanting the vision of the company to manifest, then doing whatever one
that burdening attitude which has crushed the human spirit for centuries:
"I'm working for someone else who's making me do something I'd really
prefer not to" That's all gone. What's left is the alignment of desire
I see this attitude is revolutionary for management. Personally it inspires
me to work more, to dive in, to be work, and be attentive to keep
On another subject, this afternoon [Name] had some conflicting issues making
her unhappy, so I guided her through the right/left hand polarity, and they
Thank you for the C++ debug training.
lift of a driving dream seems to empower people more than does structure and
Sun, 25 Jan 2004
Ed Says: "To be a good trader, you have to be
good at doing nothing."
You said that during the Reno workshop and the words stayed with me. Since
the workshop, I have been working very hard at doing nothing, and I'm
starting to make progress. However, I have much work to do. On a daily basis
I have the feeling that I should be doing something. After all, I'm a
trader, shouldn't I be TRADING?
If you'll recall, I day-traded stocks for four years. Five or six hours a
day in front of the monitor. I spent much of the rest of the time thinking
about trading. I did well early on, but the last 18 months I just churned my
equity. Before the workshop, I quit trading, mentally and physically
burnt-out. If I was going to continue trading, something had to change. At
the Reno workshop, the Tribe helped me begin to gain insight into my trading
issues. In the goal-setting portion of the workshop I chose "Integrated
Trading" as my "snapshot". I committed to making trading part
of my life, not my life.
I no longer spend hours watching prices change. I have back tested and
implemented a very simple system: See setup. Enter trade. Enter stop. Hold
position until trend changes. I enter trades in the morning, then begin the
work of doing nothing-- get the kids off to school, take a run, clean the
house, go have a coffee, read the papers, go to lunch with my wife or a
friend, etc. Occasionally I return to my office to check for new signals,
raise stops, etc. I resist the temptation to fiddle with the positions most
of the time. I admit it's been challenging to sit patiently with unrealized
profits. My new approach has already paid off -- I've been very long
equities since November. This has been my most profitable period in several
years. I'm still long many of these positions.
However, doing nothing has its challenges. Now that I'm not busy, there is
time to contemplate. As a frenetic day trader, my brain was constantly
preoccupied/distracted with data/noise. With free time, repressed feelings
and issues percolate to the surface and new feelings appear. For instance,
even though I've had early success with my new approach, I don't really feel
like a "trader" anymore. I spend so little time trading. I now
feel unemployed. In fact, I could actually have a "real" job and
still execute my system. What do I want to do with my time? With my life? As
I vacuum the house in the middle of the afternoon, these thoughts come to
But I know what you're going to say. These feelings need to be taken into
the Process. Thankfully, the Denver Trading Tribe is now coming together.
We're having our first meeting this weekend. I look forward to the Tribe's
support in my quest to be a master at doing nothing.
Thanks for your help and inspiration.
who are willing to experience:
to have ample supply of excitement, clarity and knowledge.
be boring or interesting
as the lunar banjoist, above,
they are spontaneous.
Thu, 22 Jan 2004
Thank you very much for calling me accepting me into the Tribe. I understand
the attendance and participation requirements.
In our conversation you said that you would be posting the letter I wrote to
you. That's totally fine. However, in the letter I mentioned my boss's
technical system, which he calls [Name]. I feel that he may be upset at me
if he saw his trading theory posted on the internet.
might consider the feelings you have about revealing too much
information. When they become your allies, you can use them to
avoid repeating the drama.
make it interesting
make it boring.
Thu, 22 Jan 2004
Hi Ed !
I have something for you. Since your recent hot seat issues involve
relationships, and you like Erickson, I have a book of interviews of
Erickson on the subject of couples, his approach to therapy with couples,
examples of cases, etc.
One case, for example. The husband constantly used threats of suicide to
control his wife. Erickson recommended getting lots of brochures from
funeral homes and mortuaries, and leaving them around the house !
receiving can empower remarkable change.