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Questions
(Quotes from Ed in Red)
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Answers |
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Thu, 14 Jun
2007
Merci!
Mr. Seykota,
I love your website! It's full of great information and I have only
seemed to have touched the surface.
I have ordered
3 recommended readings and look forward to reading them.
I recently
began a job day-trading and peruse your site during quiet lunch hours. I
would like to become an expert, self-aware trader. Thanks for the
inspiration! |
Welcome!
Enjoy!
Per your day trading, see
Warren Buffet, below. |
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Thu, 14 Jun 2007
Warren Buffet Video
Ed,
I think you might like this.
http://video.google.com/videoplay?
docid=-6231308980849895261&q=
genre3Abusiness&total=57536&start=0
&num=10&so=0&type=search&plindex=3 |
Notice Warren's super-long-term
orientation.
Coca Cola [symbol: KO]
Warren hangs on to KO
through a decade of decline.
He cites the value of the brand,
the "moat" around the franchise
and his need to understand things.
|
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Wed, 13 Jun
2007
Trading System for Beginners
Hi Ed,
First of all, it is a honor to send this humble mail and I know you
should receive many mails every day, from many places in the world.
I'm trying to develop a trading system with linear regression and moving
average, but it's not working as I would like. I'd like to know what do you
think about this kind of trading system and how to develop good trading
systems. |
You might consider having a
look at the TSP and Associates links above. |
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Wed, 13 Jun
2007
The Trend
Mr. Seykota,
I have been searching far and wide for a trader who can define a trend.
None have lived up to the task ...
I have read piles of books and none have been able to answer my question
either.
So I turn to a legend, you sir are my last hope. |
Part of the problem you may
be having in defining a trend is that trends do not exist.
Like the past and the future, a trend is
merely an idea. There is no such thing in nature. Trend is
an idea about the
overall average historical direction of prices; trend is a convenient
way to view history; trends do not indicate the direction of prices in
the moment of now, or even exist in the moment of now.
Furthermore, The methods you use to
define trend (to view history) are entirely up to you, so you get to define trend any
way you wish; everyone may have a different idea of "the" trend.
Let's say you make a graph the volume of
air in your lungs. If you define trend by the one-second average,
your air volume
trend may change several times per minute. If you define trend
by a 90-day average, then your air volume trend may gradually increase for
several decades and then decrease.
Lung Volume vs. Height
Clip:
http://www.spirxpert.com/refvalueschild.htm |
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Wed, 13 Jun
2007
Tribe Meetings
Hello Ed,
Just wanted to let you know how beneficial I believe the [City] Tribe
experience has been to me, even though I've only been to two meetings.
The snapshots really helped to clarify my vision / intention.
For example, at the first meeting I drew an unclear image and commitment
for
the "Fun" snapshot. The tribe brought this to my attention and "aha"
this
helped me clarify my intention.
Sounds simple enough; little hinges swing big doors.
I enjoy sharing my commitments as it really helps me be accountable and
mindful of my intentions.
I envision greater growing awareness as I continue with the Tribe.
Thank you for all your efforts in bringing this process to our
attention.
All the best,
Ps. Within days after the last Tribe's meeting a very nice piece of
business
presented itself to me. |
Thank you for sharing your
process. |
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Wed, 13 Jun
2007
The Jademaster
Ed,
Is the full length Jade master story in digital format? I find that
thought provoking trading / life metaphors make things more interesting
and fun. Your short story makes me feel like I am not alone and the path
I am on has been traveled before and there are many lessons to learn
which helps sustain my patience. Are you willing to post a copy of the
full version to the trading tribe website? |
I'm planning to include the story in
my next book. |
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Wed, 13 Jun
2007
IV Tribe Meeting Feedback
Hi Ed,
Thank you to you and tribe for helping me realize the incongruent
desires I had (calm/peace & trading a $100,000 account to live off of).
I took your advice in acknowledging the following:
a.) I need more $ for this to be realistic.
b.) Instead of building a system that I find comfortable (the "if I
build it and they will come" model) I should be "finding out what the
market (investors) want" as far as a fund/investment vehicle is
concerned; what risk/returns/correlations they desire.
This really landed with me because I relate to and believe in, having
the end snapshot then working backwards to make it happen. Having a
semi-specific idea about what people want and THEN building to suit
feels right.
I took action and met with a friend who is a
[brokerage house] advisor and
asked him what "people want"? It was very productive and led to some
other contacts.
p.s. had fun playing music with you …
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Thank you for sharing your
process. |
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Mon Jun 11, 9:50 AM ET
Positive
Intention of Anger
Dear Chief Ed,
I enclose a
link to an article that claims anger helps people make better choices.
Wesley Moons, a psychologist at the University of California at Santa
Barbara, and his colleague Diana Mackie designed three experiments to
determine how anger influences thinking—whether it makes people more
analytical or careful about their decisions, or whether it leads people
to make faster, rasher decisions.
... they found that the angry subjects were better able to
discriminate between strong and weak arguments than the ones who were
not angry—suggesting that anger can transform even those people who are,
by disposition, not very analytical into more careful thinkers.
Link:
http://news.yahoo.com/s/livescience/
20070611/sc_livescience/angerfuelsbetterdecisions
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Anger is a strong feeling
associating with a grievance.
One of the positive
intentions of anger is to focus attention on the aggravating situation.
Therapists regularly
prescribe drugs and anger management classes to "cure" anger
by making it go away.
Anger
has a positive intention.
Clip:
http://www.coalharbournhc.com/
images/anger.jpg |
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Mon, 11 Jun
2007
Byron Katie & TTP
Ed,
Our Tribe is extending our work by using Byron Katie's work. I
find this work compliments TTP and the combination is potentially very powerful. I view TTP/Rocks
and this inquiry process as being different entry points into the same
system.
Perhaps this approach attracts me because of the
analytical nature of using inquiry to unravel my stressful thoughts. My
experience is that inquiry provides a method for experiencing my
feelings without resisting them.
I also notice that this process
emphasizes the "now" and that it is done in SVO-p. I am considering
installing the steps of this inquiry process as new resources in my next
Rocks process.
Links: www.byronkatie.com
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TTP is essentially empirical
and it seems to work well in conjunction with other disciplines.
Please let me know how the
combination works. |
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Sun, 10 Jun
2007
Banning Depression
Dear Ed,
I'm just reading a book in which the author describes something that sounds very much like how
one creates a knot:
"Eight years ago, I'd been in a position where I felt depressed all
the time ... Fortunately I got enough pain that I pulled myself out of
that pit, and as a result I linked massive pain to depression. I began
to believe that being depressed was the closest thing to being dead.
Because my brain associated such massive pain to the very concept of
depression, without my even realizing it, I had automatically banned
it from my vocabulary so that there was no way to represent or even
feel it."
No way to even
feel it?!??
In your experience, what do you think of this approach?
Instead of fully feeling depression, he claims that by removing the
word from the vocabulary, he can get rid of it:
"In one stroke I had
purged my vocabulary of disempowering language and thus a feeling that
can devastate even the stoutest of hearts."
Have you experimented
with this idea, and does it work as the author suggests, or merely
tighten the knot and in the process plant the seed for a bigger drama? |
Depression is a state in
which the subject feels inadequate and despondent.
For example, if your mate
leaves you, you may feel inadequate and despondent and call the
combination depression.
One of the positive
intentions of depression is to get you to stop doing what is not
working.
In our Tribe work, we
encourage the sender to fully experience his feelings (including
depression), to discover the positive intentions of his feelings and to
support those intentions.
In the Rocks Process for Depression,
we typically replace a Medicinal Rock such as withdrawing and cutting off communication, with a
Pro-Active Rock such as inviting deeper emotional connection.
Professionals typically prescribe medication, such as
Wellbutrin, Prozac, Zoloft, etc, to deaden the senses and
prevent experiencing the underlying feelings.
A belief that depression is
bad may interfere with gaining information about being on a
non-productive path; the trading analog is engaging in Trend Following
without using stops.
Depression
has a positive intention.
Chronic Depression
may indicate unwillingness
to experience feelings
of inadequacy.
Clip:
http://www.medem.com/medem/images/
jamaarchives/JAMA_Mental_Depression_
Depression_JPP_01.jpg |
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Thu, 7 Jun 2007
The Officer and The Marijuana
A Lesson in
Risk Management
Hey Ed,
Here is the video I said I would send you at dinner. its really funny.
http://www.youtube.com/watch?v=dv2l1CzGQHU
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One of the principles of
risk management is to start off with a small position - and make sure you have
the resources to take a big "hit."
Heavy Hitters
know what they can handle.
Clip:
http://www.travelpod.com/users/
technotrekker/overland05.1130801640.17-toke.jpg
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Thu, 7 Jun
2007
Donchian Today
Greetings Ed!
Here's a quote ... that I stumbled upon:
"Ed Seykota once told me he taught a college course in trading that
lasted 10 weeks. He spent the first week of the class teaching basic
information about trading. He then spent another week teaching the class
Donchian's 5 & 20 trading system. However, he needed the remaining 8 weeks
of the class to convince people to use the system he had taught - to get
them to work on themselves enough to accept the losses that it would
generate."
I first read this and thought 'how stupid of these people who can't
follow a simple system'. Then the market came and knocked me off my high
horse with a huge brick. I took a loss. Then I read the quote again and
came up with a question:
Does the Donchian system and others still work today? I know the markets
haven't changed because human nature hasn't changed therefore these
system work right? I just wondered that by having the discipline to
follow the rules would a Donchian 5 & 20 system work well?
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I recall teaching the
course in using a weekly-rule system at an adult education class at a
high school. I do not recall trying to convince anyone to do
anything.
I do recall the class
starting with about seven students and, by word of mouth, ending with about fifty.
If you want to see how the
5/20 system works, you can simulate it on a computer.
|
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Date: Thu, 7 Jun 2007
Words of Wisdom
Ed,
Here is a
twist on some standard advice.
http://www.frontiernet.net/~jimdandy/
specials/life/life.htm |
OK. |
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Wed, 6 Jun
2007
Word
Popularity
Hello Ed !
I find this website, and feel you might be interested in it.
Its easy to use!
You might like to read the below so you understand what the site does
I invite you to type in the word ‘feeling’ into the “find word” box and
notice what words surround it, and sit next to it!
Enjoy!
Link:
http://wordcount.org/main.php |
OK. |
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Wed, 6 Jun
2007
Moved to Boat
Ed,
Part of my snapshot is living on my boat. I bought a boat, delivered it,
and
live on it.
Thanks for your help, |
Thank you for sharing your process.
Popeye
eats a lot of spinach
and hardly ever gets on a boat.
Clip:
http://www.autographsmovieposters.com/
Popeye_Collection.htm |
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Sat, 02 Jun
2007
The Morning
After
Hi Ed,
this is after a home-TTP and a Tribe meeting.
Home-TTP alone is really a nerve-racking affair. But it worked!
Fred immediately recognizes keyboard of 20 May 2007 and starts being
very sad.
We do a lot of crying and movements which resolve in some sort of flying
around
like an airplane and Qigong movements.
I remember me playing piano as a kid. The piano teacher hit my hands and
I stop
playing the piano. As a teenager I take it up again. I gave it up when
my
school exams show up at the horizon. It is like an island, just the
piano and me.
Somehow I lost a part of me when I gave it up.
At the tribe meeting we discuss our k-nots about power and perfection.
We have
a wonderful meeting despite of the k-nots.
We also discuss the difference between snapshot and image. Fred produces
an
image instead of a snapshot if there are k-nots or rocks. The image
draws CM and
Fred in the old situation where the k-not is created. The body starts
making
movements and Fred and CM tune in.
I remember the situation and some of the feelings attached to the
situation. My
heart aches. I talk about it. It's not finished yet but it's a great
relief to
speak out that I didn't like it. I get more into the feeling that as a
grown-up
I can make my own decisions. Today I feel calm and settled.
We do note that things are improving. |
Thank you for sharing your
process. |
|
Fri, 1 Jun
2007
The
Positive Intention of Quitting
Hi Ed,
TTP isn’t a cure for unwillingness.
Only quitters quit and I am proud to be quitting something that I feel
so many people find hard to.
It seems I am unwilling to feel the freedom that would be mine should I
stop discretionary trading.
As you’ve pointed out to me over the last few months my drama driven
system is medication that numbs the despair and sadness
I feel when I reflect on how poorly I have used my life so far.
It seems that I know how strong that despair feels and how upset I am so
I trade and trade to blank it out.
I exit my position and convert my non-base currency. I email asking that
my account be closed.
I have a net worth of negative £170,000 with very high monthly bills and no job
to go to but I know if I get out now I can rebuild my life.
Seeing it written down makes it seem easier to handle I need to grieve
for that lost money then move on.
Thanks for helping me find the strength to be a quitter, I really fear
where it might have gone if I hadn’t. Ended relationships and financial
ruin we’re sure to have been on the way.
This is the best move I’ve made in ages and I am proud of it.
Thanks Ed |
You might consider taking your
feelings of despair and sadness to your Tribe.
Quitting is a Lot Easier
when you are not using the behavior
as medication.
Clip:
http://www.webtree.ca/tree/gifs/
web_cartoons/quit.gif |
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Fri, 1 Jun
2007
John Henry
Ed,
I wondered if you saw the article about the demise of
John W. Henry in this week's Wall Street Journal. My
guess is that if we are seeing this type of article in
print, there are going to be some significant trends
in the near future. |
Henry's peak seems to coincide with
his shift of interest from trading to baseball.
If you know about some future
trends, I'd like to know how you know about them now.
|
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Fri, 1 Jun
2007
Back to Trading
see:
Back to Printing Money
Well Ed,
It looks like the manager found my replacement and my last day will be
next Friday. I just don't think working 12 to 16 hour work days is the
right livelihood with my family. (That is including my 1-3/4 hour
commute each way. Total 2-3/4 to 4 hour commute each day).
I think I have pinpointed more closely when my excellent trading
stopped. The "whittle" e-mail hit something that happened few years ago.
I would like to talk about it but it is too long for an e-mail. |
You might consider checking
what is standing between you and writing the email - it is likely the
same thing standing between you and trading.
Quick Cure for Writer's Block:
Write about the block.
Clip:
http://www.lombardi.ws/literaryAspirations/
writing/writersblock.JPG |
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Fri, 1 Jun
2007
Impending Merger Predictions
Maybe I shouldn't give you some of these, but here goes:
Investment tips for 2007 for all of you with any money left, be
aware of the next expected mergers so that you can get in on the
ground floor and
make some BIG bucks.
1.) Hale Business Systems, Mary Kay Cosmetics, Fuller Brush, and W.
R. Grace Co. Will merge and become:
Hale, Mary, Fuller, Grace.
2.) Polygram Records, Warner Bros., and Zesta Crackers join forces and
become:
Poly, Warner Cracker.
3.) 3M will merge with Goodyear and become:
MMMGood.
4. Zippo Manufacturing, Audi Motors, Dofasco, and Dakota Mining will
merge and become:
ZipAudiDoDa.
5. FedEx is expected to join its competitor, UPS, and become:
FedUP.
6. Fairchild Electronics and Honeywell Computers will become:
Fairwell Honeychild.
7. Grey Poupon and Docker Pants are expected to become:
Poupon Pants.
8. Knotts Berry Farm and the National Organization of Women will become:
Knott NOW!
And finally ...
9. Victoria 's Secret and Smith &Wesson will merge under the new name:
Titty Titty Bang Bang |
OK.
Hmmm ... OK, Gopher Resource
Corporation + Da Kine restaurants + Goldman Sachs.
Gopher Da Gold, Man. |
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Fri, 1 Jun
2007
Back
to Printing Money
see:
Whittling 05/20/07
Hey Ed,
Yes, I did notice that I used the term "Whittle" when describing my
trading and I did not like it. I felt like I did not want that word in
the same paragraph where I describe my trading. I am remembering when I
was virtually "Printing" money with my trading for about 7 years
straight and I want to get back to that.
It looks like I may stay a little longer at my job. The manager seems to
want me to stay and has not hired any one even though my notice time is
up. I do not feel good about leaving him in this position when he helped
me with a good job.
This way I can pack away and "build up" some more
guaranteed money also. After all the traders I am supporting are helping
me support my family even if it is not exactly what I want to do right
now. I can sacrifice a little more time and plan out my "Trading" and
possibly my "New Hedge Fund" meanwhile. I want to come for a visit when
I get a break or the job is over.
I also feel nervous about being long stocks due to how far the market
has moved such a short time.
The trend is so strong though! I feel like
I am lucky I have a job while other people are getting laid off and the
economy seems to be slowing. |
You might consider recalling,
back in the days of printing money, how you handle nervousness about big
and fast moves.
You Can Build a Pretty Good Approximation
to a Nervous Trader ...
Use a trend-following system
with very close stops.
Clip:
http://ideaseller.typepad.com/
photos/uncategorized/nervous.gif
|
