Ed's FAQ 9/1/07

Note: The intention of inclusion of charts in FAQ is to illustrate trading principles - The appearance of a chart does not imply any kind of indication or recommendation to buy, sell, hold or exit any positions.

Questions

(Quotes from Ed in Red)

Answers

Mon, 10 Sep 2007

Up and Down Feelings

Ed,

Feelings from Events of Today:

Events are price events -- markets going up and down. I find myself paying more attention to the aggregate of the portfolio of trades and less concerned with the plus and minus of the individual trades.

This morning when I first check the status of my portfolio of trades, I am up around $500 and feel pretty good about it.

As the morning progresses I go from $500 up -- to $500 or $600 down. I still feel pretty good but feel some concerns rise that I could end up thousands down before the day.

The market then seems to stabilize and hover between $150 down and $600 down and I feel myself relax. I am thinking that this is a normal down and within my ability to tolerate. Then later the value of my portfolio of trades rises to the point that I am up $500 or so. I get rather excited that I may be up for the day.

The next time I check I am up over $1000, then up over $1400, then over $1600. My level of happiness and excitement rises with the markets.

I notice that the ones that are up now are different than the ones up when I first check the market. This makes me feel good too, because I am thinking that the portfolio of trades allows me to have something similar to a synthetic option that does not cost very much (because gains and losses offset) but that allows me to be in position for a big move should one happen in one of these markets.

I end up over $1400 for the day and feel encouraged, excited and feeling good, optimistic.

I did notice some reluctance to check the status of the trades at the midpoint of the day when I had been up $500 or so. I push myself to confront this feeling and check the market and that was when I see that I am up even more.

My plan is to watch the market and determine if there are places to add-on to my biggest winners.

Thank you for sharing your process.

Part of your system seems to include checking your positions throughout the day and noticing that you feel ebullient when you portfolio is up and concern when it is down.

Another part is to "watch" the market to determine if there are places to add on.

Per your periodic checking, you might consider getting more into your feelings with, say, a stack of phone books. If your account is up, say two percent for the day, you might then place two phone books on your chair, between the chair and your butt, so you can experience being "up" with the markets. If you are, say, down three percent, then you might place three phone books in your lap to get a sense of being "under" by three percent. Every time you check the markets, be sure to adjust your phone books accordingly to bring your personal experience in line with your account.

Per watching for places to add on, you might consider defining a plan for adding on, before the market opens. Absent a plan, you may default to adding on when you feel good.

Trading Accessories

to help market checkers

get into the experience

of being up and down.

Clip: http://marshallbrain.com/gif/phone-book3.jpg

Mon, 10 Sep 2007

My First Trade as a Trend Follower

Ed,

Several weeks ago, I am thinking about the US equity markets. I am thinking gold may be a good trade. I take a look at the chart and see that it is not trending up (around $670 at the time). I want to win and to win I must follow, not predict trends. I forget about gold. I focus on building my trading system. I am making good progress. Making advances, one step at a time.

Last Friday, I watch as gold rallies. Over the weekend I update my SR system in excel with fresh gold prices. Price has penetrated the long and short term resistance. Although my system in C# is not complete, I feel that if I don’t get in, I could miss a good trend. It seems that other trend followers feel gold is trending up too.

I want to experience the feelings of buying high and selling low. Although I am a little uncomfortable starting to trade without my system being complete, the system won’t do me much good if I cannot follow its signals.

Since I feel position sizing is most important in my trading, I use a gold ETF as a proxy (ticker: GLD) to take the appropriate amount of risk. The NAV is only at a slight premium (.11%), so I feel confident that the value of the ETF should reflect the value of gold.

I use the knowledge I have gained through my system testing to develop my trading plan. I feel comfortable risking 1% of my capital. I set my stop to the short-term support and determine my position size accordingly.

I record my feelings below as a way to share and learn more about myself. I focus on the three types of events described in 9/9/07 “Workshop—Preparation Summary of Conversation” FAQ.

1) Price goes up, down, or sideways
2) I place an order or I don’t place an order
3) My order fills or doesn’t fill

When I look at the chart of gold, it clearly seems to be trending up to me. I confirm my visual inspection with my system to determine entry point, stop point, and position size. On Sunday night, in anticipation of my first trade as a trend-follower, I am excited. I feel warm and I am smiling. I hope I will have the discipline to stick with my position until I am stopped out. Overnight, Comex gold is up a few dollars.

Monday morning, my heart races as I turn on my screen and log into my brokerage account. When the stock market opens on Monday, GLD is already up .30. I enter a limit order and I am filled at 69.64. My stop is 63.50. My position size is set so that if my stop is hit, I lose 1% of my equity.

If I get a signal, I follow it. I enter a limit order and it fills. I don’t really feel much as I go through this mechanical process. I mostly focus on making sure I do not make a clerical error (execute the correct posture, volume, and instrument). Most of my feelings, especially anxiety and fear revolve around the first event of the price moving after I am in the trade. When the price falls, I become concerned that I will lose money on the trade. I am looking for the positive intention in my feelings and hoping to delve into them more in the coming days.

Thank you for sharing your process.

You might consider using stop orders to enter markets as they are consistent with trend trading. With limit orders, you risk missing the move.

Mon, 10 Sep 2007

Workshop - Preparation

Wealth and Money

Ed,

1) I am looking at my latest personal checking account statement and I see the balance is [big number] I feel very happy and I have a big smile.

2) My family and I have great relationships; we communicate clearly with each other and support each other.

3) I easily win sparring matches against every student in my martial arts class.

4) My body is youthful: healthy, strong, and energetic; it's better than what it was 25 years ago. (I am 45 years old now)

My feeling now is joy for supporting other attendees and other attendees supporting me in personal growth.

Thank you for enumerating measurements of your success.

You might consider how you feel about the way you are employing your assets - particularly your cash.

You might also notice that in our world, there is an increasing difference between wealth and money.

Zimbabwe Stock Index Rises

while wealth falls

Zimbabwe in the middle of economic disintegration, with GDP declining for the seventh consecutive year, half what it was in 2000. Under President Mugab the country's farming, tourism, and gold sectors are collapsing. Unemployment is likely near 80%.

Though western central banks are not printing money nearly as fast as their Zimbabwe counterpart, they do have a long history of increasing the money supply.

Part of the growth in Western stock markets over the past twenty-five relates to wealth creation (capital assets and technology) and part to an increasing money supply.

As in Zimbabwe, Western stock markets are one of the principal entry points for new currency.

Clips and Information:

http://www.zse.co.zw

http://www.mises.org/story/2532

Mon, 10 Sep 200

Workshop Issue: Death - 2
see previous

Dear Ed,

I am speechless (not totally).

Ed says: Workshop Participants may email snapshot specifications to me.

I thought: this is Christmas. I mail something and it will come true :0).

Actually, we have somebody in the tribe who constantly talks about dying and I am closest to him. So we can have a ride just the two of us.

AHA. It's my trading or whatsoever. I actually have no idea of trading, just wondering that the money was really streaming in during the last three years. My calculation was: one position is 0.5 % of the portfolio, I take out all positions in a definite downtrend and everything is ok. This calculation definitely looses its existence when the bull market for stocks ends.

Wow, (1) I better unload some equity, (2) forget my greed, (3) think about diversification and liquidity, (4) hope to learn more about stops at your workshop if I dare to show up and ... (5) we two sit down and feel about death ... ???

What an issue. I hope we get it through.

Thank you for sharing your process.

Harold and Maude

share an interest in death.

Clip: http://www.ohthebill.com/bio/

haroldandmaude.jpg

Sun, 9 Sep 2007

Breaking Through

Ed,

Thank you for your time, honesty, energy, and caring. Listening to your observations about the co-dependent, "all about myself", someone for hire, on the "take", dishonest, mercenary, welfare-mentality, un-prosperous, poverty out-looker, (I may have left out a few) that I allowed myself to become was / is painfully accurate.

I see now that my behavior and attitude have done damage to my sacred self, and as a result, has been dishonest and disrespectful to everyone, especially the ones I care about the most.

Your words are still resonating, and I'm still hearing, listening, and making changes as quickly as I can identify them.

Funny, I spoke with my oldest son tonight, and tried to explain the sledgehammer (the truth), I got hit with over and over again. He thanks you too. He and I identified WHEN it (my gradual down hill slide) started. He reminded me that I never used to be that way. That gave me hope that I can figure this out and fix it. He was supportive and encouraging, and also said if he ever meets you, he will thank you face to face.

I'm still taking in what you said, and will be for a long long time. This is not anything I can't change. If I wandered into my own crap, then I am, can, and will get out of it. I need to change. I know I can uncover and reclaim the person I really am.

I've started by being honest and sincere with myself. Behaving, thinking, and accepting the victim role is no longer acceptable to me. I see now that I have damaged the integrity I used to have and therefore every relationship I have presently, and most recently the ones I had.

I thank you so very much, with all my heart, for the time you gave me. I needed to hear and accept what you said, even though it is / was very very painful on many levels. You cared enough to tell me the truth - I hold that close in my heart.

Thank you again for your caring, time, energy, and honest observations. I hear you. I get it.

Thank you for sharing your process.

Addiction

One way to help someone

break the addiction to being a victim

is to confront him with the notion

that intention = result

and that he is actually getting

what he wants.

When he accepts

that he is responsible

for every aspect of his life,

he stops seeking to be a victim.

Clip: http://www.scenta.co.uk/_db/_images/

addiction.jpg

Sun, 9 Sep 2007

Workshop - Preparation

Summary of Conversation

Ed,

Today we discuss that there are basically three types of Events:

(1) Price goes up or down, or doesn't go up or down.
(2) I place order, or I do not place order. (3) Order fills, or does not fill.

With respect to each event, I have feelings. The purpose of this report is to document the feelings associated with the events from the the first 3 weeks of trading.

Wheat: No orders, prices go up. Still no orders.
At the presentation you give to the Austin Association of Financial Traders you ask who is long wheat (and not one single trader in a room of over 90 people raise their hand). see previous

You suggest that I might want to consider the wheat market. At the time wheat is trading at around 680. I try to open my futures trading account. I am a little nervous about trading futures but feel serious determination about learning how. I meet with frustration after frustration in trying to get my account open. While watching e-trade take over ten days to open my account I watch wheat break out and go to 720.

I have several conflicting feelings--excitement at getting into the game, and disappointment at missing the run. I feel I missed wheat since it was up 40 plus, then watched without putting in order as wheat goes up another 100 ticks. I now feel embarrassed and more than a little perplexed as to why I stayed on the sidelines without entering any orders. This seems to be a pattern of mine. I miss out on the great and then look for something is ok, like there is an upper limit on how much I allow myself, how much money, how much love, etc.

And I watch wheat go up and up and still no orders to get in. I wonder if I have problems buying highs or whether it is just that I am some profit protection mechanism that keeps me out of the good stuff. As I write this, I can feel myself shutting down and at the same time, wanting to enter an order to buy wheat just to see how I feel and prove that I can buy highs.

Dow Jones. Sell Stop Order at 13240. I place order because I am feeling pressure from [trading partner] and because I missed wheat and I don't want to disappoint him by missing another one. In writing this, I notice something else, a lot of what I do is to make others happy, to help me feel connected to them and to make them like me or be happy with me so that they will not disconnect from me. This is something I want to take to the Tribe meeting. So against my better judgment, because the market is lower than I would like, I go ahead and enter the order to sell Order filled. Price goes down. I feel good. Price goes up. I feel pressure to lower my stop, but with support from Ed and [trading partner], I do not lower my stop. Price goes down. I feel happy at being up and having stayed with it when my inclination was to bail and so I look for place to buy more. I place an order at 13290 and it is filled.

I feel excitement at not missing the trade, but feel somewhat anxious about the risk exposure being more than I am comfortable with. So I lower my stop to 13450 and I feel some relief because I have lowered my risk exposure. I then watch as the price for DJ rises right up to my stop and takes me out. I feel some relief at being out of the trade but immediately start looking for another (probably safer or more mediocre market) to get into. I then watch as the DJ goes down right through where I was to a place where I would have been up over $1500 per contract.

I feel numb and withdraw my feelings about missing this down move. I cannot explain what stands between me and getting back into the DJ trade after I was stopped out. I feel somewhat embarrassed for lowering my stop and getting stopped out. I feel so chagrined that I withdraw my focus and feelings from the DJ trade and thus miss it when it goes down again. I could have reentered when it took me out and turned right around and went back down, but I did not do this.

I seem to be like the surfer that misses the good waves, and takes the mediocre waves. That lets the good get away and settles for less. That has an upper limit above which he is not comfortable. Pattern is to stick with a position rather than acting to get into it. One of the cardinal rules of trend trading is to be in the market for the big trends and I am keeping myself out.

More to come ...

Thank you for sharing your process.

Variations from sound trading principles often indicate unwillingness to feel feelings.

You might consider taking your feelings about scolding children to your Tribe as entry points.

Scolding

can tie k-nots.

Clip: http://www.und.ac.za/und/ling/camese_scold.gif

Sun, 09 Sep 2007

Workshop - Preparation

Death

Dear Ed,

thank you for your confirmation letter for the October Workshop.

My first mail was eaten by this Email program so I try another one and hope that this is shorter and more concise despite the upcoming headache.

Possible Outcomes of the Workshop:

I have a partner and we love each other.
I enjoy the luxury feeling of being a woman.
I make a decision where to stay and act accordingly.
I have an empty flat.

Man, all is "I"... where is the "you"?
I feel, when the "I" is happy, I will make the "you" happy.

Possible Outcomes after Workshop:

I have a kid and do my best in raising it.
I do my best that my tribe members get the most out of the tribe.
I am very interested in human architecture and engage there.
Other forms of Right Livelihood.

Progress:

I visit my hometown [City] without visiting my parents and my brother and realize that living there is like drinking cold coffee.

In [City], we have a tribe meeting and afterwards I have all sorts of feelings and insights. I am still working on your post of September 27 "Finding a Man with Your Interests is easier once you know your own interests". I go to the [Name] Museum of Architecture in [City], it is closed. A nice guy lets me in, give me two posters and advises me of a Lecture in the evening. I suppose if it would have been in the family I would have studied it. I am really fascinated by good modern architecture which enhances the life of people who are using it.

After the Lecture I am left alone by an aspiring Architect from [Country] who involves in networking with some prize winners. All of a sudden, a nice guy appears and involves me in a discussion. I enjoy his company very much.

Unfortunately, discussion is taken over by the older one who tells a lot of stories about anything. When I realize what he is doing, the younger has left already, but gives me information about another Lecture. I will show up and hope that I am doing / not doing the right things.

My Snapshot about Right Livelihood = Moving brought up: me standing in a big empty room lit by the sun. This is about the opposite of what I have now and I know I am not alone with this issue. I commit to throwing out things every morning I am in the flat (now or never).

Concerns:

When I love somebody I am always thinking that he is dying. Before I write this letter, the issue pops up again. I see the guy I met in [City] in the internet and off it goes: oh my God, he is an entrepreneur ... isn't this a real stress job ... it could he has a fragile health and is going to die. Perhaps that is average; if you like somebody you never know whether the person will be there the next day. Anything could happen.

I have a lump in my throat like feeling inhibited. First I thought it is linked to trading, like markets going up and down, but it's not.

Trading:

I trade long-term roughly like (1) stock has a yearly performance of more than fifty percent (2) chart looks promising and volatility increases (3) P/E ratio is reasonable, good story, etc. for CM to hold the position (4) risk management via position sizing, pyramiding up and selling downtrends.

This year - like last spring - I have a break-down in equity of thirty percent at the worst day. I am very upset. I medicate the feeling by buying a synthetic CFD-contract of that funky December wheat on August 21. Wow! I get interested in commodities as an - at least psychological - offset to the risks of the stock market. But what to do when you forget to roll? Dear Larry Williams wrote about the issue in a book but forgot to mention what he did in the situation.

Last year during summer drawdown I was REALLY UPSET, because I lost my job DESPITE I didn't need it any longer. This year during summer drawdown I am REALLY UPSET because markets didn't find a bottom DESPITE I was still in the positive for the year. Looking at the facts there never was a need to be REALLY UPSET.

This seems to be an online-workshop now and now I forgot the conclusion I drewa second before. It's gone.

Thank you for sharing your process.

You might consider taking your feelings about death to your Tribe as an entry point.

Jag-o-Hearse Fun Car

For people who like

to obsess about death.

It's a two-seater

so you have room

for a friend in the front.

Clip: http://www.jagweb.com/jaguarmodelclub/

TVjags/tvjags.htm

Sat, 8 Sep 2007

Questions on Trading

Hi Ed,

If I do my math correctly, it's been almost 20 yrs since Market Wizards and another 20 yrs since you started trading.

How different is your trading system now and 20 years ago? Also, have chart patterns and picking spots to buy / sell been helpful to you or cost your money on balance? (From the FAQ, I see you mention a lot about the long-term trend but little about the other two primary components of your trading)

(Market Wizards) Ed says, "I am primarily a trend trader with touches of hunches based on about twenty years of experience. In order of importance to me are: 1) the long-term trend, 2) the current chart pattern, and 3)picking a good spot to buy or sell. Those are the three primary components of my trading.

(FAQ, 9/14/06) Ed says, "You can make a catalog of chart patterns that has millions of entries, or you can simply follow trends."

FAQ does not offer specific trading advice,

or recommend specific trading system parameters. See Ground Rules, above.

Your trading system includes (1) some trend catching math and (2) your willingness to follow the signals.

Your math is likely currently long wheat and gold. If you are not actually long these in your account, then perhaps your search for the ultimate holy grail math is little more than a distraction from the real issue: namely, willingness to follow your signals.

Chicago December Wheat

Most Trend Trading math is long.

Not all systems are.

Sat, 8 Sep 2007

Logotherapy

Hi Ed,

Do you know about Logotherapy, and if so, can you share some of your thoughts? The excerpt below sounds very familiar to TTP:

From Viktor Frankl's "Man's Search for Meaning", "Logotherapy bases its technique called 'paradoxical intention' on the twofold fact that fear brings about that which one is afraid of, and that hyper-intention makes impossible what one wishes ... in this approach the phobic patient is invited to intend, even if only for a moment, precisely that which he fears ...

A young physician consulted me because of his fear of perspiring.Whenever he expected an outbreak of perspiration, this anticipatory anxiety was enough to precipitate excessive sweating ... I advised the patient in the event that sweating should occur, to resolve deliberately to show people how much he could sweat.

A week later he returned to report that whenever he met anyone who triggered his anticipatory anxiety he said to himself, "I only sweated out a quartbefore, but now I'm going to pour at least ten quarts!" The result was that, after suffering from his phobia for four years, he was able, after a single session, to free himself permanently of it within one week."

Yes, In TTP we use the Healing Field of Acknowledgment to encourage you to do more of what you are already doing.

This type of exercise tends to untie k-nots.

For more anecdotes on this type of technique, read about Milton Erickson.

Sat, 8 Sep 2007

Wants a Guarantee

Hello Mr. Seykota,

Have just finished the Michael W. Covel book "Trend Following". I am interested in getting into to trading with the idea of making a profit.

I think that I was born to do something like this, but will need to learn from the grassroots level.

Will the books you recommend on your web-site cover the process of going long and short and chart making and analysis, the rudimentary knowledge that a trader needs?

I will get those books if that is what I need to start ... hope to see you in Nevada in October.

I do not know if the books on my site are "what you need to start."

You might consider taking your feelings about [getting permission / approval / guarantees from others before you can proceed] to your Tribe as an entry point.

A Guarantee

is a promise

about the non-existing future.

Clip: http://www.templecitrus.com/guarantee.html

Sat, 8 Sep 2007

Heads Up

Ed,

I have a great hot seat in this Thursday’s tribe meeting. Thank you and other tribe members for support.

Two issues in trading bother me a lot recently. One is that I am watching Wheat trending up everyday but Idon’t have a position in it. Instead I am waiting for Cotton to gain momentum to enter a position. The other is that Gold is much stronger than Silver, but I choose to long Silver instead of Gold. I feel something is not right inside me. So I bring these two issues to the tribe as entry.

After check-in, Ed summaries issues from all of us and asks us who want to work first. I step in and take the seat first. With Ed’s provoking probe, I am starting to heat up. I feel humiliated. I feel sad, frustrated, and even angry. I start to hold my palms together very tightly, and my palms are sweating. Ed pushes me getting into feelings more and more. I start to head down and squeeze my eyes hard, and my eyes are getting wet.

Right there, Ed ask me to freeze all of my forms, and think of a time when I am a child, I act just like that. I recall that at a time I am working on my homework with my nephew after school when I am in first or second grade, my uncle comes over and says that my work is much worse than my nephew’s, and I am so stupid and not able to do anything better. That humiliates me so much, I feel very sad and angry.

What I do is heading down and getting my eyes wet, so I don’t have to experiencing the feelings of humiliation and inferiority. I also recall some of other similar scenarios. That is it! This is the rock I use to medicate my feelings of humiliation and inferiority. It helps me to let the feelings go away. Ed gives the rock a name, ‘Duck’.

Ed asks me whether I want to keep the old rock or to have a new rock in which tribe members can help me fill useful and strategic resources, to cope feelings of humiliation and inferiority. I say that I like to have a new resourceful rock. After several rounds of role plays, I squeeze following resources in the new rock and bury it deep inside me.

1. Be a ‘duck’, a 5% solution
2. Work hard - get knowledge / skills
3. Share my feelings with others
4. Ask for help
5. Ask other persons how they feel
6. Take a deep breath; think of a plan
7. Be open to new resources
8. Fight back - stick up for myself.
9. Head up and keep eye contact

On the way driving back to home from Ed’s house, I have more insights from my rock process. The old rock can only help me avoid feelings temporarily. It can not help me on the way to achieve the right livelihood. Fred knows my unwillingness and keeps designing dramas for me to experience feelings of humiliation and inferiority.

Missing the best profitable trend of Wheat in a year is one of the dramas that Fred arranges for me to experience. The new rock gives me willingness and supports me to do things that I like to do and to get the results that I want. I think inferiority might just be an illusion. The failure is part of any game, I am willing to embrace it and learn from it. So, does it matter, if I see a trend in a market and initiate a position in it, the trend reverses and my position stops out? No. It might be just a part of trading business, or maybe I need more experience to identify a trend more accurately. How about the trend lasts for a long time, I make huge profits from it? It is also just a part of trading business. Success and Failure are on the sameboat, but not inferiority.

Thank you for sharing your process.

Sat, 8 Sep 2007

Envy and Jealousy

Dear Mr. Seykota:

Thank you for the FAQ post on last email. We had a intense rock process in our tribe. Not only me but one of the other member experienced the rock process for the first time. I feel it was very successful. Thank you for your assistance in intensifying the feeling by providing visual end result of the old medicinal rock. I am now enjoying my new rock. Suddenly socializing is something I look forward to and enjoy.

After every rock process, it becomes easier to observe my self and identify new bad rock. I found Jealousy plays a huge role in creating negative result and waste of energy. Dealing with Jealousy from others and dealing with my own jealousy toward others. From my last Rock process I have a new rock to deal effectively when people are jealous of me.

However as much as I hate the feeling of jealousy, I also noticed that I spend lots of my energy to avoid being jealous of others and ended up spending quite a lot of energy being jealous about others and worst case being very evil about it.

After my previous rock process which was about 2 weeks ago, I try to analyze the positive intention of being jealous is it's a signal of loosing focus and is a best time to review your investment position and your life's activity and definite chief aim in life.

I would have to ask my tribe members for help in creating a new rock. I know all successful people have to deal with this issue and believe they are master at understanding the positive intention of Jealousy. I feel it's one of the most important part of success in anything.

I would appreciate if you can give me some insight on positive intention of Jealousy. (Truth is I really can't find it's positive intention)

I'm sorry its becoming a long email but I must share this because I just found a gruesome truth about my trading activity. On the positive note I am getting organized and started to log all my trade for clients (Net of commissions and fees) I had some nice trade in the past 4 month. With market going through draw downs my client's NAV are Flat or few percentages gain at best from 4 month ago. I felt I am doing well with this volatile market. However after logging all my trades, I couldn't believe that when I make have gains, I loose it's gains with almost exact dollar value few trades later, it's continuation of that and it is a very consistence pattern. After the gain I cut down new position in to half or even 1/3 and yet believe it or not I cut my loss just exactly when I am break even. Before I got involved with TTP I would be down 30 - 40% by now so I am happy to be break even however I know I must figure this out. It's like clock work, I win, I win, I loose, I loose and end result is break even net of commission and fees. There is something wrong here. It really has nothing to do with market condition in my opinion. I hope you can give me some feed back.

In conclusion, I sincerely thank you for the work that you sharing with all of us. I am very grateful. Thank you.

Thank you for sharing your process.

Jealousy is the desire to protect your property. The positive intention is property management.

Envy is the desire to possess someone else's property. The positive intention is to acquire the same or equivalent property for yourself.

Jealousy and Envy in k-nots both tend to entrain exciting drama.

Curiously, Envy is on the list of the seven deadly sins while Jealousy is not. Were it the other way around, Envy might be envious of Jealousy's position and Jealousy might be Jealous of maintaining its own position.

The Seven Deadly Sins

Lust (Latin, luxuria)
Gluttony (Latin, gula)
Greed (Latin, avaritia)
Sloth (Latin, acedia)
Wrath (Latin, ira)
Envy (Latin, invidia)
Pride (Latin, superbia)

Note:

This list is a pretty good guide for tying k-nots.

To tie k-nots, simply develop judgments

that these feelings are bad.

The Girl On The Right

feels jealousy if the boy is hers

and envy if the boy is not.

Envy and Jealousy

can support each other

in creating exciting drama.

Clips:

http://www.reconnections.net/jealousy.jpg

http://www.androidblues.com/

JealousyStepbystep/jealousystep.html

Sat, 8 Sep 2007

Frustration

Hi Ed,

First, I would like to say I read about you in the Market wizards book and from then have held your insights in high regard. The responses to the questions are reviewed by me often (and I mean that)!

Second, I have thought about writing for a few days and am always left with - "what should I write?"

so here goes:

I am new to your TTP process and the FAQ on the web site. I am currently reading through the FAQ section and am struck by the fact that I have repeating Drama in trading and all other parts of my life. I look at it now as "great I see it and can get it sorted out and start right livelihood."

But where to start, I live in [City] and no tribe is close. Can I start my own? I would Love to come to a work shop but, Oct 07 is a date I have committed already, so how often do the workshops run?

My current intention then is to read FAQ completely, read your book and to contribute to others.

I have a story:

Just the other day I am preparing to take my daughter to college and as prep for that I check the breaks on her car. I find they need to be replaced, it is Saturday and I am the only one to do the job in time, so I get the parts and get started. As I start, I cannot find my old wok gloves that I always use for "dirty jobs."

I search and search but no gloves. Where could they be? Who moved them?

I get angry! This whole glove thing creates anger and irritation in me. Every time I touch a dirty part or bang my hand I get more anger. The whole job goes bad and takes four times as long as expected. Finally I am complete and move on.

The next day we are to pack up stuff for the move. I go outside open the hatchback to my SUV and there are the gloves in plain view right where they have been for days. I am struck by the repeating Drama of the whole thing, and feel "was I angry before I did not find the gloves?" "Have I been angry?" Now I feel "If I relax, experience my emissions, stay open to all my surroundings and send out love how will my life change?"

Thanks for any response and your devotion to others.

Thank you for sharing your process.

For information on how to locate or start a Tribe, see the Tribe Directory link above.

If you have a frustration k-not (you have a judgment about frustration - you do not see its positive intention - you are unwilling to experience it) Fred is likely to engineer situations for you so you can experience frustration.

Frustration

A feeling we have in a k-not

typically comes up

before

the associating drama appears.

Clip: http://www.nbrii.com/blog/content/

binary/frustration.jpg

Fri, 7 Sep 2007

Positive Intention of Cycles

Ed,

Do you think the Fed can succeed in stabilizing the economy? Greenspan seems to think we can't do it.

-----

Greenspan Says Market Turmoil Like 1998, 1987

NEW YORK (AP) -- "The human race has never found a way to confront bubbles," former Federal Reserve Chairman Alan Greenspan said Thursday in reference to the euphoria that can precede contractions, or reactions, like the current market turmoil, according to a published report.

Greenspan, speaking to economists in Washington, D.C., compared the turmoil to that of 1987 and in 1998, when the giant hedge fund Long-Term Capital Management nearly collapsed, The Wall Street Journal reported on its Web site.

"The behavior in what we are observing in the last seven weeks is identical in many respects to what we saw in 1998, what we saw in the stock-market crash of 1987, I suspect what we saw in the land-boom collapse of 1837 and certainly the bank panic of 3/8 1907," Greenspan said at the event organized by the Brookings Papers on Economic Activity, according to the Journal.

Greenspan, now a private consultant, said euphoria takes over when the economy is expanding and leads to bubbles, "and these bubbles cannot be defused until the fever breaks," the Journal said.

Bubbles can't be defused through incremental adjustments in interest rates, he suggested, the paper reported. The Fed doubled interest rates in 1994-95, and "stopped the nascent stock-market boom," but when stopped, stocks took off again. "We tried to do it again in 1997," when the Fed raised rates a quarter of a percentage point, and "the same phenomenon occurred."

The human body and the human society are essentially cyclical.

We eat, eliminate, sneeze and bear children cyclically, as discrete tasks.

Those who want to stabilize the economy might get a personal feel for what they are trying to do by trying to stabilize their own urinary process - so it flows in a continuous 24/7 trickle.

If they survive that experiment, they might consider creating a personal analog for trying to prevent the market from ever taking a dump.

This Device For Taking The Cycles Out

of the urinary cycle

helps to reveal

that cycles

are the healthy way to go.

Clip: http://www.medscape.com/content/2004/

00/48/85/488560/488560_fig.html

Fri, 7 Sep 2007

Protecting and Giving

Hi Ed,

The baby is asleep so I had a few minutes to think. You mentioned intentions = results. I was wondering how you come up with your intentions?

I think it's fairly easy to set intentions before you get to the place where you start thinking about how to protect what you have more then how to make it bigger.

I view you as a uncompromising intellect, who has worked hard to get where you are. So with that you understandably don't like to 'give' things away. At the same time it seems like you read all these emails and respond. Many times your responses on FAQ seem to purposely make the reader work for the true meaning, and that's fine by me.

Thanks for taking the time to read and respond to all
the FAQ's emails.

You might consider taking your feelings of protecting your stuff and giving your stuff away to your Tribe as entry points.

Receiving

is the essential gift.

Clip: http://www.briony.com/works/

peaceful_embrace1.html

Fri, 7 Sep 2007

Gloating

Ed,

Would you please tell me what might be the positive intention of gloating?

Thank you

To gloat is to feel or express great, often malicious, pleasure or self-satisfaction: gloating over a rival's misfortune.

One positive intention might be to announce your mastery of a situation and / or to discourage rivals.

In Trading and in Life

gloating seems to attract

self-correction.

Clip: http://www.ecpa.be/commonground/

downloads/images/gb_banana_peel_HR.jpg

Fri, 7 Sep 2007

Now's the Time

Hi Ed,

Ed says: In the 70's people wonder if the markets are changing. Today people wonder if the markets are changing.

I appreciate your answer and I like to share my thinking.

In the moment of now it seems many questions and answers remain the same. It's the same in many fields: there's a time where there're no computers and backtest is made by hand with a pencil and a paper; there's a time where there're computers but not for all and you need to punch cards; there's a time where computer become personal and their potential increase year after year ... and yet I read an author tell that's a too much demanding task for someone to write his own testing software !

Resources are never enough when intention is not to use them.

I'm writing this few lines and suddenly it comes to my mind "Now's the Time" by Charlie Parker.

Thank you for sharing your process.

This Is About All The Computer

some traders need to use.

Clip: http://www.pei.literacy.ca/facts.htm

Thu, 6 Sep 2007

Women and Vulnerability #2

See previous

Ed,

Yeah, based on your photo:

“Honey, you’re tits are standing between me and my work – GO AWAY!”.

You might consider taking your feelings about women, and people in general, to your Tribe as an entry point.

You might also consider finding ways to express your feelings of anger in ways that do not harm others.

Thu, 6 Sep 2007

Guilt

see previous

Hi Ed,

Ed Says: This Runner is running and may not be aware of what's running him.

Your comment hits the nail on the head and is something I think about a lot.

I engage in a DIM and keep a log about how I feel about several issues throughout the day.

I avoid to analyze and just write down what comes up without much judgment and thought. I find that the same couple of emotions I am unwilling to feel are the ones that continually set me up for drama; sadness, anger, fear all link up to set me up for drama.

I think about this and how I try to move away from these feelings only to end up in more drama. I feel that I engage in self sabotage particularly when things are going well - I achieve things and then somehow self-destruct. I usually feel guilty about doing well or being happy, having a good time or just having nothing to worry about or keep my mind active.

Ed - what is the positive intention of guilt; how is it that I feel guilty about doing well or simply enjoying life? I feel this may be linked to my traumatic experience in childhood or perhaps being made to feel guilty is a way to control a lively, energetic and mischievous kid.

You might consider taking your feelings of guilt to your Tribe as an entry point.

Guilt is a Feeling

of unnecessarily harming someone.

The positive intention of guilt

is to keep you from harming others.

If you have guilt in a k-not,

you might hurt people regularly,

and find that others get together

to remind you to feel it.

If you feel that having fun harms others,

(result of subscribing to a guilt trip)

you might feel guilty about having fun.

Clip: blog.myspace.com/altobinky

Thu, 6 Sep 2007

News-a-Mentals

Ed,

This is from my broker this morning.

-----

Is China quietly dumping US Treasuries?

by Ambrose Evans-Pritchard

A sharp drop in foreign holdings of US Treasury bonds over the last five weeks has raised concerns that China is quietly withdrawing its funds from the United States, leaving the dollar increasingly vulnerable ... what it does show is that world central banks are in a hurry to get out of the US. They don't seem to be switching into other currencies, so it is possible they are moving into gold instead. Gold is now gaining momentum across all currencies and has broken through resistance at 500 euros," he
said.

Source: FIMAT

You might notice that news often appears to justify a price move after a large part of the move is already on the chart.

December 2007 Gold

On August 31, on the open,

the price trades above the trend line.

On September 6, near the close (red circle),

some news appears to justify the move.

Wed, 5 Sep 2007

Back in Touch with Touch

Ed,

My trip to [City] was fabulous. I had a lot of fun and met some great people, including a lady who very kindly took it upon herself to help me get back in touch with my body.

Thank you for sharing your process.

Connecting with Each Other

we learn who we are.

Clip: http://www.manostsakiris.googlepages.com/

Thu, 6 Sep 2007

Associates Program

Hi Ed,

Thank you for encouraging me to continue my research, your acknowledgement is empowering!!!

I program and run tests 6-10 hours per day. Some ideas I try fail miserably, others seem to produce OK results. Before my (commercial software) purchase, I feel that I am going to be able to "whip together" an amazing system and be up and running in no time.

I write down hundreds of trading ideas over the last several years and can actually visually see them working together in my head years before I actually test them. I recall reading numerous trading books and websites for several years, not to mention reading FAQ religiously 3-4 times per day almost since its inception. It seems that doing all of those tasks, I somehow felt a perfect system will write itself once I start, look at all these ideas I wrote down, they have to work!!!

After I install and figure out how to code in the testing software environment, my programming picks up pace, I spend more and more time programming everyday. Eventually, I program for such a large portion of the day the I begin to ignore my main business. Frustration grows inside me as I feel I should progress quicker then I am, my mind races a million miles an hour (KM for Canadians, lol). I try this, that and the other thing, I eventually lose sight of my initial overall intention, I lose sight of each dynamic part of the system, I seem to program in fits and spurts, my mind goes black.

One night late at work, I eventually reach a "I'm starting to lose my sanity point", thoughts of failure dominate my mind. Fears of never being successful at my passion I have thought about since the age of 14 overtake me. I reach a point where I feel I have no ability to even keep programming and almost on the brink of tears, I just feel my emotions to there utmost intensity.

I feel and feel and feel and then WHAM!!!!!!!! All my strong feelings dissipate, I have instant flashes in my mind of the various parts of my system, things become clear again and I have fresh new ideas, (ie. Mainly mechanical things that I was ignoring and forgot to focus on the first several times around in my programming). I program these new ideas, things start to work as expected and get better. I can breath again. Emotions are powerful.

Thinking about this process now as I write this send, reminds me of your posts regarding frustration and it seems as though I follow some of the proactive responses; namely, trying new things, eventually taking a break/quitting for a while. I wonder if I have a ROCK that kept me doing an activity that keeps me in frustration for longer than needed, or I have an unwillingness to experience frustration and my "keep programming and Ill make it" behavior is medicating the feeling that I am not taking as a signal. Maybe the creative process of self discovery, illumination and getting clear is a bumpy ride? LOL, this reminds me your post of Bacon stating that things move violently to their place!

Thank you for sharing your process.

Insights

that appear while releasing feelings

typically illuminate the mind

Clip: http://www.psych.northwestern.edu/

~mjungbee/mjungbeeindex.html

Wed, 5 Sep 2007

Desire to know

Ed says, "Prediction implies a desire to know about the (non-existing) future."

True, and it seems that human has that desire for thousands of years, just like the desire for food and sex. They all seem like a necessity for human survival.

It seems that one of the things that many traders have a burning desire to know is whether the system is (still) profitable. For most people, if only he can "know" it is indeed a winning system, then following it makes easy.

Unfortunately, I think that there is no way that we can really "know" for sure. No matter how many back tests we do, there can always be a "25-sigma event" (as Goldman CFO David Viniar calls it) happening.

Yet the desire to know never dies, not even lessens a tiny bit.

My plan is to take the feeling of "wanting to know" to the hot seat. Or is it something that the Rock Process may help?

P.S.
I love your response to my question on Aug 22 (Causality).

Ed says, "He Feels The Passion Rising and he notices he does not fully understand it, so he stops, politely excuses himself and goes home to analyze it all.

No wonder I have been working as an ANALYST for the last 7 years ...

Thank you for sharing your process.

Let me know what insights you gain by taking the feeling of wanting to know to the hot seat.

Wed, 5 Sep 2007

Women and Vulnerability

Ed,

If fred.love(woman) && fred.vulnerability(express)
{
woman = bitch;
bitch.trample(fred);
}

You might consider taking your feelings about intimacy to your Tribe as an entry point.

Intimacy

A feeling of closeness

and a willingness

to share that feeling.

Clip: http://www.buzzle.com/editorials/

8-30-2005-75804.asp

Tue, 4 Sep 2007

Mathematically Correct Women #2

See previous

Dear Ed,

These findings at Cambridge will come as a great relief to the majority of well endowed women in our country - since it places no limit to the size of the hips, as long as the waist/hip ratio is maintained.

Also - it seems to me that the men in our land would prefer the Marilyn / Sophia-like proportioned women where the waist / hip ratio is also accompanied by a favorable face / breast attractiveness quotient ( if I may take the liberty to propose a new measure. )

I wonder though - if these observations reflect my personal preferences - or is it actually shared by my countrymen ... hmmm...Maybe I shall approach some Ph.D. types to do some meaningful research for a change ...

Sincerely & not so facetiously,

You might consider taking your desire for mathematical precision and predictability in the matters of women and the markets to your Tribe as entry points.

The Markets and Women

(even mathematically perfect ones)

are essentially unpredictable.

Prediction implies a desire to know

about the (non-existing) future.

A meaningful relationship

with a market or with a women

may require willingness

to experience vulnerability

in the moment of now.

Clip: http://www.closetmonster.net/

Images/RobotSara06.jpg

Tue, 4 Sep 2007

Postage Stamps

Hi Ed,

I visit my local U.S. Post Office and notice the new stamps are "forever" stamps at $0.41.

I'm thinking that they may have chosen $0.39 as a better "forever" as ... well, you know ... 39 and counting ...

Your thoughts?

Forty-one is down one cent from 42. This is the first reaction I know of in the price of postage.

I ask my postal clerk if he thinks it's time to load up on the 41's. He says, with a wink, to be careful - they might be heading down.

US First Class Postage Rates

A pretty smooth trend.

One theory for the 14-fold increase

is that letters keep getting heavier

and more difficult to deliver.

Another theory is that as we keep on

inflating the money supply

the dollar is now worth

a fourteenth of its 1950's value.

-----

If the government were as frugal

as ever-39 Jack Benny,

the price of a stamp

might still be three cents.

Clip: http://www.spudart.org/blogs/

randomthoughts_comments/P3997_0_3_0/

Tue, 4 Sep 2007

Needs to Know

I need to know if you've made millions of dollars by trading and if you can still make millions of $ with just $50,000 using your system ...

I want to know this because $ is just a measure of success in the trading arena ...

I need to know this before I devote my time into learning from your trading ...

Success in life is another subject my friend ... success in life is happiness (whatever it is for you) plus success plus freedom plus good mental health or character.

Markets typically move before the "obvious" reasons appear. A need to know everything before you act can interfere with trading.

You might consider taking your need to know to your Tribe as an entry point.

The Need for Knowledge

can slow you down ...

... and / or get you into a lot of trouble.

Clips:

http://www.design4billions.com/pages/

stakeholders/images/knowledge.jpg

http://www.theosophical.ca/TreeOfKnowledge.htm

Tue, 4 Sep 2007

Beliefs Cause Feelings - or Do They?

Hi Ed!

For the first time I think the tone of my TTP-mail will be optimistic. I have gone through my boundaries and am finally on the right path.

This summer I read a psychology book written by Alberg Ellis. He mentions a few things that had great importance for me. First of all he makes it clear that all of your feelings depend on your beliefs.

How you react depend on those. Try to question them once in a while, especially if your feelings seems to say it's not working. The other part that really got to me was when he recommended not to feel that a situation is "AWFUL", but rather "INCONVENIENT". If you can remain sane, you have better possibilities to react constructively.

Ellis focus on belifs helped me to understand how I now view the rocks process. When you act outside of your earlier boundaries you change your beliefs. When you role play a situation, you are actually doing an analygy to backtesting in trading. If you try some action-rocks and find one you like and feel suit you, that one can replace the medicinal rock. It's the same process as backtesting a trading system. You have to try it in different conditions to be able to follow it with certainty.

So what has changed? First of all I have finally given myself reasonable goals of eating habits. Before I always felt bad when I ate a usual dinner, since my belief was that human beings are meant to only eat vegetables and fruits. I could never stick to that and it always ended with overeating. Now I eat healthy, enjoy less healthy food when that is served and feel really good about it.

Other parts are progress in snapshots. I am on my way of doing 15.000 push ups and biking 2000km this year. I have already done 12.000 push ups and 1300km. Other snapshots that work better are my validation of MY OWN feelings. Before I tried to validate others but to me it felt better to validate the feelings I felt. I measure each day I stick to validating my feelings instead of acting them out. I act them out in the tribe.

I have built up a email-snapshot group with some friends that I rely on. Each week I send them my progress of snapshots and they send me theirs. Some times I feel a little bit angry / hurt at them when they dont send anything but I only validate that feeling and stick to my plan. They can do whatever they do and I validate that.

My trading is working okay. I stick to my plan most of the time. I had some emotional sell outs, but I immediately build up a plan how to get back on track with the new situation.

Thank you for sharing your process.

A belief is the acceptance of a proposition without proof of its validity.

Some rational talk therapists hold that feelings depend on beliefs.

I also hold the opposite view, that beliefs typically follow feelings.

If you feel hungry, thirsty or lonely, you are not likely to be able to modify these feelings merely by changing your beliefs.

If you feel hungry, you are more likely to change your belief from "junk food is bad" to "junk food is ok" in order to medicate your feeling.

In this way, beliefs follow feelings, typically as medication for feelings we are unwilling to experience.

W. C. Fields (1880 - 1946)

Everybody should believe in something.

I believe I'll have another drink.

Clip: http://cns2.uni.edu/~wallingf/blog-images/

humor/wc-fields.jpg

Tue, 4 Sep 2007

Wal-Mart Cargo Ship

Ed,

Now I know how Wal-Mart gets all its stuff from China.

World's Largest Cargo Ship.

It carries 15,000 containers and has a 207' beam. Its 31 knots cruise speed means the goods arrive 4 days before the typical container ship (18-20 knots) on the China-to-California run - this is hugely competitive carrying perishable goods. Silicone painting on the ship bottom reduces water resistance and saves 317,000 gallons of diesel per year. 11 crane rigs operate simultaneously to load and off load her.

Additional info:
Country of origin - Denmark
Length - 1,302 ft
Width - 207 ft
Net cargo - 123,200 tons
Engine - 110,000 BHP
Crew - 13 people
Construction cost - US $145,000,000+

I wonder if you have photos of the boat that carries the dollars (T-Bonds) back to China - or if you have a hunch what they might do with them.

Date: Tue, 4 Sep 2007