Questions

(Quotes from Ed in Red)

Fri, 14 Dec 2007

Buying Dips / Selling Rallies

see previous

Thanks for FAQ. It's fantastic.

Note you might want to edit the subtitle of the most
recent entry to change from:

"One problem with buying dips is that

you might wind up selling the collapse;

one problem with selling rallies is that

you might wind up buying the blow-off."

to:

"One problem with buying dips is that

you might wind up buying the collapse;

one problem with selling rallies is that

People who accumulate a position on the way down, by buying dips, and hold it through further price deterioration may wind up having to sell the whole position out during a collapse.

The Trouble With Buying Falling Things

is that they may very well

keep on falling.

Clip: http://www.usm.maine.edu/~lsavage/

UrbanGeographyProjects/Streetscapes%20Web/

Fri, 14 Dec 2007
 

Classic Video

Thu, 13 Dec 2007

Wants Data

Good Day Ed,

Do you know of any resources or sites (besides yahoo finance) that provide a historical listing of all stocks and their end-of-day data from the NYSE, NASDAQ, and AMEX. The reason I ask this is that when performing historical testing I want to be able to use stocks that would have traded during that particular year.

As you know, stocks can become delisted, change symbol name, merge, or be bought out entirely by a competitor and cease trading. I have found that when a company ceases trading the symbol is removed from the master list as though it never existed.

Any help is always appreciated.

FAQ does not endorse people or commercial products.  See Ground Rules.

Thu, 13 Dec 2007

Sadness

Thank you for sharing your process.

Sadness

One of its positive intentions

is to motivate action

to remedy loss and aloneness.

Clip: http://zindy.zone.dk/html/drawings/

Thu, 13 Dec 2007

Wants Specific Markets

Mr. Seykota,

I'd like to say how much I respect what you've accomplished from my readings in Market Wizards and that I look forward to receiving your book.

FAQ does not or offer specific trading advice, or recommend specific trading system parameters. See Ground Rules.

Thu, 13 Dec 2007

Whipsaw Song on YouTube and Next Book
 

Ed,

Thank you for continuing to hold me accountable.

The book is currently in its fourth draft.  The video is currently in its second version.

Thu, 13 Dec 2007

Zero Volatility #2

see previous

Hi Ed,

I simply compute the std dev of prices (5,6,7,8,9,10) in Excel;

I obtain a std dev equals to 0 if I consider the changes (1,1,1,1,1) but I don't understand the utility of this; better idea of actual volatility come taking in account the min and max value (5,10).

Do you agree ?

You might consider:

1. Giving your "better idea" a name different from Standard Deviation, since that name already refers to an idea.

2. Consulting EXCEL about the difference between the STDEV and STDEVP methods.

3. Taking your feelings about <mastering standard procedure> to Tribe.

Thu, 13 Dec 2007

Pyramiding and Anxiety
 

Ed,

I notice that both fading the up-move and pyramiding on corrections that run counter to the underlying trend being traded - are inconsistent with the core principles of trend following.

FAQ does not or offer specific trading advice,

or recommend specific trading system parameters.  See Ground Rules.

You might consider taking your feelings about <anxiety and stress> to Tribe - and reporting your insights to FAQ.

Steamroller

Some people try to deal with short-term market fluctuations by buying dips and selling rallies.

One problem with buying dips is that you might wind up selling the collapse; one problem with selling rallies is that you might wind up buying the blow-off.

Trend Traders refer to counter-trend strategies as trying to grab nickels in front of a steamroller.

Clip: http://www.mellcorealty.com/

display/index.html

Wed, 12 Dec 2007

Checkout

Ed,

I am not able to commit to consistently attend the IVTT meetings now. I plan not to attend regular IVTT meetings from now on.

You and TTP help me find my path to right livelihood. I am glad to join the TTP community. I plan to attend our local tribe meetings regularly and report my process to FAQ from time to time.

Thank you Ed. Your work on TTP to me is invaluable.

Life is a process.

Trading is a business.

Family is a blessing.

Wed, 12 Dec 2007

Completions / Questions / Feeling Sad and Lonely

Hi Ed,

This post sits and sits on my PC for a long time. I notice I am afraid to send it. I read it and notice “I want to avoid” and “I am afraid” running though it. With the help of TTP I am feeling now; just noticing feelings without judgment is new and very helpful. I try to get the positive intent and act if necessary. So, I edit this and am grateful and thankful to be afraid.

I am reading the older FAQ's and feel they are a treasure trove. What a wonderful gift you and the Tribe give, thank you! Most of the questions and responses impact me. Some of the questions or posts are so germane; I feel I am the sender. I have a felling we are one, one sender. Could it be that we are one sender/receiver in the under Fred network?

Your response on Wed, 26 Mar 2003:

Ed says: Seems like you start something, get about half way and then start off in a new direction. That is consistent with your feeling of information overflow.

How about you resolve to pick one task, say eating an apple, and finish it completely, even the seeds and stem.

Trends come and go. Trend followers do too. Some stay longer than others.


This gives me an AHA. I have difficulty completing tasks. I go to the store pick out an apple and eat it completely, including the seeds and stem. I enjoy this completely. I am completing more tasks now.

Your response on Fri, 11 Apr 2003:

Ed says: Different schools justify different political structures. The Austrian School tends to justify Capitalism. None of these schools predict prices very well.

As you seem set on understanding and predicting things, I suggest a puzzle for you: write down a description of your own feelings about how come you want to predict things and send it to FAQ.

If you can't do it, you can stop trying to describe larger systems; if you can, the insight might set you free from your obsession to predict the future.

This gives me an AHA. I am living now, trading now, creating system now, and smearing the past and future all over myself. So here goes:

I ask questions about why because I want to predict. I want to predict things because if I could I would not feel the feeling of loss. I want to avoid loss because I want to avoid the feeling of anger that I feel if I lose. I want to avoid anger because I think it is bad and people that are angry all the time are bad.

My mother beat me as a child and is angry all the time. I judge her as a bad mother. I want to avoid anger because if I feel the anger and let it out I am like her. I want to avoid being like her because I think she is a sad and lonely person. I think she acts like a mistreated child. I want to avoid being like her because I want to avoid being sad and lonely. I want to avoid sad and lonely because I judge them as bad.

I want to stop this now. I want to stop this now because I feel stuck at sad and lonely. I feel stuck because I have a tendency to not complete tasks. I fail to complete tasks because I am afraid to fail. If my task is not complete I cannot judge it as a failure. I am afraid to fail because I judge my father as a failure. I am afraid to be like my father because he has a mental disorder. I judge his disorder as bad and socially unacceptable. I am afraid to be like my dad because people do not like him. I am afraid to be like my dad because he is sad and lonely.

I want to stop now because I judge sad and lonely. I am afraid to be like my dad because people will not like me. I am afraid if people do not like me I will be sad and lonely. I want to stop now because I am sad and lonely.

I want to force myself to push on.

I want to push on because I am curious of what is next after sad and lonely. I am curious of what is next because I am thinking about the future. I think about the future because

I am sad and lonely. I focus on right now. I am sad and lonely.

Thank you for sharing your process.

You might consider taking your feelings of <sad and lonely> to Tribe.

Sad and Lonely

One of the positive intentions

of experiencing sad and lonely

is that the form

tends to attract people

to support you.

Clips:

http://www.pbase.com/accordsystems/

image/51701447

http://fanart.lionking.org/Artists/Kida/

LonelyNala2.jpg

http://www.goodephotography.com/

sadandlonely_2.jpg

http://image2.greetingcards.com/dgc/i/c/

Wed, 12 Dec 2007

Drama With Trading System #2

see previous

Thank you for sharing your process.

Tue, 11 Dec 2007

Attachment

see Drama

Ed,

When an activity becomes a craving, interferes with right livelihood and serves to cover up other feelings, it might be medicinal.

Tue, 11 Dec 2007

Float vs. Daily Volume

Good Day Ed,

If a stock has very low daily volume but a high float is it possible to have your order filled for an amount greater than or equal to the daily volume.

If you don't care about the price you get, there is no effective limit to the amount of stock you can buy or sell.

Open Outcry

on the Chicago Mercantile Exchange

Tue, 11 Dec 2007

Drama With a Trading System

Hi Ed,

I hold a large quantity (for me) of a particular stock that I purchase back in year 2002.

My trading system gives me a signal, by the slightest of margins, to exit on Friday 7th Dec. to be auctioned on Monday at Market-on-open.

I hold this stock for nearly 6 years now and I watch it climb from very low levels to the point where if I close my position now it will result in a very large profit for me (nearly 15% of my entire account)

What could be simpler? I'm long, my system signals an exit, so I must get out.

Over the weekend (prior to Mondays open) I find myself agonizing on whether or not I should exit, whether of not I should wait a few more days (to observe the market action) and whether or not I should slightly change my system parameters so that the exit is not triggered.

I am fascinated by this behavior, yet I am unable to control the feelings arising from this.

Intellectually & logically, if I am following a system I need to get out on Monday, no questions asked. Yet on some other non-intellectual level I don't want to exit. I want to delay.

I look for signs that will confirm to me that I should stay in for a while longer. I find many.

I find support levels that I previously did not notice. I notice that the trend one degree higher that the one I'm operating with is definitively up. Other indicators say "stay in". The fact that my exit was signaled by the slightest of margins does not help my decision making process.

Regardless of all this I know that if I stay in beyond Monday, I'm not following my plan.

That is what it's all about, being disciplined enough to follow the plan no matter what.

I'm torn between the two options of getting out or staying a bit longer.

What to do?

I tell myself that I can always re-enter the stock but my system dictates that it will have to be at much higher levels and at a greatly reduced position size since the prices are now at much higher levels. I don't like this reentry option, I prefer to sit tight with what I have.

Very intense feelings come up with respect to the above and I am unable to take this to Tribe since our Tribe has stopped meeting.

I try to experience these feelings alone, but I only 'scratch the surface'

On Monday, I literally have to FORCE myself to exit and this is a very difficult decision for me. I don't like it at all.

I exit with a nice profit, yet I feel sad, I feel regret and I feel lost. My leverage is gone. I did not want to get out.

The fact that I now have a large realized profit offers little consolation.

I will add that I have no problems whatsoever exiting positions that have small losses or small/medium profits, yet with this particular situation (i.e. a very large profit) I experience these intense feelings.

As if to rub salt into the wound, the market confirms to me that I made the 'wrong' decision by opening at the lows of the day (where I exit) and closing at the highs on a very large range day (approx. 6% move up in a day)

Thank you for sharing your process.

You might consider exploring your feelings about <attachment> to the stock.

In the 1950's Harlow and Harlow give baby Rhesus Monkeys a choice between a surrogate terry cloth & foam rubber mother and a surrogate wire mesh mother with a milk bottle. 

This is to discover if babies prefer affection to food.  They do.

They also discover that the baby monkeys with the cloth mother later display a higher level of social and mental development than their wire mother counterparts.

In humans, emotional attachment seems to have many positive intentions. Dr. William Sears, a champion of Attachment Parenting recommends:

Clips:

http://yourparentingsolutions.com/

attachment-parenting-baby/

http://www.oznet.ksu.edu/sedgwick/

Mon, 10 Dec 2007

Zero Volatility

See Volatility #2

Per your example:

The changes are {1,1,1,1,1}. 

The mean is 1.

The variations are {0,0,0,0,0}.

The standard deviation is zero. 

I wonder how you get 1,87.

I can get 1.87 as follows:

Series: {5,6,7,8,9,10}

Mean: 7.5.

Vars: {-2.5, -1.5, -.5, .5, 1.5, 2.5}

Sum of Squares: 17.5

Divide by 5: 3.5

Take Square Root: 1.87.

Replace delimiter: 1,87.

Mon, 10 Dec 2007

Radial Momentum

see Boyd

Mr. Seykota,

I like to use the T-38 because it is a simple airframe with a symmetrical wing. I agree with you, when a T-38 does a no-flap approach it gets it lift purely from angle of attack (AoA).

The forces to account for are relative wind, cord line, camber (=0 in this instance), AoA (alpha between relative wind and cord line), weight, thrust, and drag (parasite and induced).

My question is can one use radial momentum to better explain the interaction of these forces?

Radial Momentum applies to radially expanding fluid, such as in the Levitator Disk and  the Collapsing Cone.

Sun, 9 Dec 2007

Colonel Boyd

Mr. Seykota,

I've been going through some material on Colonel Boyd. From what I have read it sounds like you two may have been kindred souls.

I'm almost done with Air War College. I recognized the OODA Loop from past readings. I had no idea how huge a role Colonel Boyd played in the way wedo business. I'm going to Nellis AFB for a week in January and will stop by the Aggressor Squadron to take a look at the memorabilia. My curiosity is peaked. I like what I read about not fearing ambiguity I think it applies to all aspects of life (as do most of his concepts).

I was also skimming through your work on radial momentum. I have a basic understanding of aerodynamics and I'm curious how radial momentum effects the equation for lift,

L= (C sub l) (rho) (V squared) S?

My work on Bernoulli indicates that the "official" wing curvature explanation for lift (per high-school and college textbooks, NASA, etc.) contains a mis-application of Bernoulli's equation.

My work indicates airplane lift is mostly a function of angle of attack and that the "official" airfoil explanation showing in the illustration above does not apply.

For more information on Radial Momentum: 

www.seykota.com

For an inside view of an F-18 taking off:

http://alt.coxnewsweb.com/ajc/swf/

blueangels/blueangels.swf

Clip: http://www.boeing.com/companyoffices/

Sat, 8 Dec 2007

Dear Ed:

Thank you for your support.

You might consider putting your letters through a spell / grammar checker before you send them.

Aerosol Spell Checker

Just spray a little

on your monitor.

Clip: http://www.worth1000.com/entries/

Sat, 8 Dec 2007

FAQ Withdrawal

Yes all is well and I am (up until now) enjoying a few days off from composing this column.

If you find my publication schedule unsatisfactory, please be sure and contact our subscription department for a full refund.

Hold My Calls

Clip: http://www.cslab.ece.ntua.gr/~jdros/

Fri, 7 Dec 2007

The Magazine Covers

Food makes headline in two large magazines, not very emotional though, I wonder what you think about these covers.

 

Clips:

http://www.economist.com/printedition/

http://www.economist.com/images/

Thank you for reporting the covers.  I concur with your opinion that neither cover has much emotional juice. For more on magazine covers, see:

http://weblog.blogads.com/

Thu, 6 Dec 2007

OK.

Extremely Prominent Angel

Clip: http://www.mccullagh.org/db9/

Thu, 6 Dec 2007

Ex Wife with Sex Life

Thank you for sharing your process.

You might consider taking your feelings about <wanting to control others> to Tribe.

Possessiveness and Jealousy

help up protect

our possessions.

They do not work so well

in trying to control

other people.

Clip: http://www.unclematty.com/training/

Thu, 6 Dec 2007

Diversification of Lag Parameters

see previous

Ed,

Here is a basic plan of research:

Take an optimal system from the Support/Resistance system (140/20); define this as S. Use this system because results are already on the web site.

Define the diversification system, T, as the same system with the Trading Metric held constant and the Trend Definition look back allowed to vary (x/20). This gives results down the column of the optimization table.

Use the existing GC data.

Split the $1M account into 2 $500K sub accounts.

Produce results for S(140/20) using 1 sub account, heat unchanged at 0.05.

Produce results for T(x/20) for x=20 to 420 Step 20 using other sub account, heat 0.05.

For each of the 21 pairs of S and T add the sub account equities for each day to give a combined equity run for each pair. From this calculate drawdown, ICAGR, and hence bliss.

Using sub accounts allows verification of the results of each system before the equities are combined. This makes for easy error checking.

If your research shows a significant diversification benefit, the granularity effect may turn out to be of second order magnitude.

Yes, given you are starting with a optimal (single lag set) system, you are unlikely to improve on it by substituting another single set.

Wed, 5 Dec 2007

New Resource for Negotiations

Ed,

While watching [name] on the hot seat, I get a tingle in my legs. I take this form into my process. I intensify the tingle. You ask me what this tingle wants me to do with my legs. I lift them up so that they are fully extended and it feels very painful. You ask, what are your legs doing? They're locked into a position. This immediately reminds me of a short position I have on.

I take this to mean that it hurts when you get locked into a position. I keep going with it and get more familiar with the form. You tell me to let my legs move without trying to control them. They float around and there is no pain. When I try to control them, the pain is intense and I have to release them. This leads to the insight, "when you try to control the market, it is painful."

I move on to another form, the feeling of being paralyzed when I look at how much risk I'm taking. I feel sick to my stomach, like I'm on a tight rope staring down at the ground far below. This leads to the insight, don't take more risk than I can stomach.

After tribe, my legs keep coming on and off as I move in and out of positions, but I become less certain as to what they are trying to tell me.

Then something interesting happens.

Thank you for sharing your process.

Getting a Leg Up on the Competition

Clip: http://www.freakingnews.com/

Tue, 4 Dec 2007

Protest Meeting

GOLDMAN SACHS TRADERS GATHER

OK.

Tue, 4 Dec 2007

Telling Her My Feelings Works

Hi Ed,

I am dating this girl and after a few months I begin to feel things that are reminiscent of feelings I had in my former marriage that I hate. I feel like I am always taking the initiative, always initiating physical intimacy, always picking up the check, and generally under appreciated. I feel that it really sucks and what a fool I am to get involved with another girl that is going to treat me this way.

I begin to blow her off. Not taking calls, etc. I think, if she wants to talk she is going to have to take initiative. She does and we agree to meet at the Central park Zoo.

The morning of the day I am to meet her I am conversing with my friend telling him I have to get out of this losing relationship with the girl and it hits me.

If I blow her off I am just avoiding yet again all these feelings. Then I will just do this again and again.

I commit to myself to meet her and tell her my feelings.

I follow through on my commitment and meet her in the park and tell her the feelings I am having that I don't like and that I see things progressing lopsided and that I don't want that. I tell her I want her to make a plan for a date sometimes and make it happen and take me along. It takes a while as we are walking around the park for a few hours, and I am scared to be so frank, but I do it as I am not afraid for the whole thing to just go away anyway.

She listens. She does not judge my feelings. She thanks me. Ed, this girl has never heard of TTP and she validates my feelings without repercussion. We seem to get closer almost instantly and I feel now I can say anything.

Thank you for sharing your process.

So Ya Want Me More Aggressive

Be careful what you wish for.

Clip: http://www.bbc.co.uk/schools/gcsebitesize/

drama/images/expression/aggression3.jpg

Tue, 4 Dec 2007

Help, I'm Trying to Get Out of This Monitor

Dear Ed:

I trust all is well.  At our last tribe meeting I suggest to our Chief that all tribe members meet for dinner for a change on a day other than a regular TTP meeting day.

Yesterday, we meet for dinner at a Chinese restaurant in downtown. After we finish dinner the waiter brings the fortune cookies for all and we each pick one. One member reads his and makes a comment ... this actually belongs to you. The message is

"With all the good choices

you could make,

why choose to make a bad one?"

Thank you for sharing your process.

Gold Fortune Cookie

Just the thing

for the man

who runs his life

on cookie fortunes.

Clip: http://www.weddingthings.com/Merchant2/

Mon, 3 Dec 2007

Pride, Gluttony, and Wrath

Dear Mr. Seykota:

I hope you are well. I am writing today to ask sincerely for your insight because I feel I am stuck right now.

I searched everywhere on the site and I could not find the FAQ mentioning the positive intention of Pride, Gluttony, and Wrath.

I refer to the FAQ on Sat, 8 Sept 2007. My Aha is that I got a huge judgment on Pride along with Gluttony, Wrath and also demand for Respect.

Although I felt I handled the situation with humor, basically I encounter some drama last week which I believe originated from Pride and demand for Respect. As I write this I am not proud of this fact, and I even feel little shame. However I want to fix this problem and I feel I need help.

Below is the definition of pride from the seven deadly sins which I looked up on the Internet.

http://en.wikipedia.org/wiki/Seven_deadly_sins

In TTP we hold that every feeling has a positive intention.

The article you cite seems to intermix feelings, desires and actions.

Some examples:

A positive intention of feeling pride might be to alert you of an impending fall.  See Proverbs 16: 18-19 (KJV) and similar warnings from many cultures.

A positive intention of feeling Gluttony might be to do some weight reduction exercises, like the push-away (from the table).

A positive intention of feeling Wrath might be to duck.

A Pride of Lions

Clip: http://www.steppestravel.co.uk/

Mon, 3 Dec 2007

OK.

The Price Per Pound

can also enter into the calculation.

Clip: http://3quarksdaily.blogs.com/

Mon, 3 Dec 2007

MACD Chuckles

see previous

Mon, 3 Dec 2007

Penny Wise

Sun, 2 Dec 2007

Completed Modules

Sun, 2 Dec 2007

Thank You

Dear Ed

I want to thank you ... for your participation at our [City] tribe meeting. I feel we all learned from having you there and we will put what we learned to good use. One of our members wrote to FAQ about a problem with waiting and stated that he had addressed the issue in our tribe twice before and felt you were the only one who could help him.

As I read the post I got hooked by that statement and felt a little hurt and discounted as the member did not seem to be getting results from his participation in our tribe. I kept this feeling around for awhile and then remembered your coaching at the meeting where you said that if someone expresses a feeling and I have a problem with it , then it is not their problem but it is my problem.

While driving to the meeting I looked at that and realized I still have some issues around doing it right and effectiveness and he had touched that nerve again.

Sun, 2 Dec 2007

New to Programming

Ed Says,
 

You might consider mastering a book on Basic or C#.

Thanks Ed,

After your post, I quickly review my new copy of "C# for Beginners" book and find the description of "long" ie. "long integer".

Yes.

Sat, 1 Dec 2007

Missing FAQ

Occasionally, the author of an item requests revision or deletion of a submission.  See Ground Rules.

Some FAQ Items

wind up here.

Clip: http://img.alibaba.com/photo/

Sat, 1 Dec 2007

Anger & Bet Sizing

Ed:

Why when I win do I feel angry? On a small portfolio I was up over 1000% earlier this year but, when I thought about the success, I felt deeply angry (like at someone or something).

I then question whether my drawdown from there was medicinal (a boulder / or very large rock! ).

On another issue; all the recent posting's related to back-testing various parameter's on a system, seem's to be "passive predictive".

FAQ does not answer "why" questions. See Ground Rules.

You might consider taking your feelings about <anger> and <winning> and <risk> to Tribe.

Yes, Trend-Following systems and the associating back-testing and optimizations all assume the recurrence of trending markets.

Your run-up and subsequent draw-down may indicate you might consider following your own rule #2.

Mad About Money

Clip: http://www.coloria.net/dig.art/kuvat/

Sat, 1 Dec 2007

New To Programming

Ed,

I complete the exponential lag system in the TSP. Surprisingly there were several workarounds that I had to implement in order to get the system up and running in [Commercial Software].

Performing this tutorial is refreshing, and I feel that I expand my knowledge through manually constructing exponential lags and figuring out how to implement the position granulator in my commercial testing software.

Ed, I also feel that the "Position Granulator" formula in your System Math document is ambiguous and may be missing a step.

Position Granulator
Quantity = Round_Lot *

(long) (Quantity / Round_Lot + 0.5)

Round_Lot = 250 (for example).

In particular, I do not understand what the (Long) variable means, is this suppose to say roundToNearest or perhaps asInteger.

Ed, Perhaps providing a step by step example of rounding using the formula's will serve new comers to the TSP. I see the steps as follows:

1. (Equity * Bet Size) / (ATR*ATRfactor) =

The notation is in pseudo code, easy to translate to Basic, Fortran, C, C++, C#, etc.

The casting operator (long) casts (Quantity / Round_Lot + 0.5) to a long integer - this is the key to the granulation process.

You normally use the same variable on both sides of an equation when you are processing a variable through a number of modifications.

Your step-by-step example engages a rather non-standard convention of placing the result on the right side of the equation.

You might consider mastering a book on Basic or C#.

Sat, 1 Dec 2007

Dynamic Portfolio Selection with MACD #2

see previous FAQ Wed, 28 Nov 2007

Yes, when back-testing indicates the optimal time constant for MA3 is zero, it incidentally indicates a double MA system works better than MACD.

The promise of MACD is that it can get you in and out of positions before the MA lines cross.

In practice, it gets you out of positions prematurely, necessitating whipsaw re-buys.

The primary function of MACD appears to be to medicate feelings of impatience and fear that commitment to a long-term trend excites.

see: http://en.wikipedia.org/wiki/MACD

Gerald Appel

author of MACD

Medication for Appel's Commitment Deficiency

also, incidentally,

Moving Average Convergence / Divergence

Clip: http://blog.tapuz.co.il/alerts/

Sat, 1 Dec 2007

Exponential Lag Creator
 

Exponential lags occur in nature so they have no human creator. 

The same goes for distance, velocity and acceleration.