Questions

(Quotes from Ed in Red)

Sun, 20 Apr 2008

Confusion

Ed,

Is this a true telling of a fraud bailout or a fake story of a true bailout? I am confused. I plan to work on confused feelings in our tribe meeting.

Bear Stearns Buy-Out ... 100% Fraud

http://www.itulip.com/forums/

Thank you for sharing your process.

Sun, 20 Apr 2008

Richard Feynman Sums It All Up

 
Ed -

Here's the quotation I was seeking tonight:

If, in some cataclysm, all of scientific knowledge were to be destroyed, and only one sentence passed on to the next generations of creatures, what statement would contain the most information in the fewest words?

I believe it is the atomic hypothesis (or the atomic fact, or whatever you wish to call it) that all things are made of atoms - little particles that move around in perpetual motion, attracting each other when they are a little distance apart, but repelling upon being squeezed into one another.

OK.

Richard Feynman (1918-1988)

Feynman contributes to physics

with his insights

and to his students

with his enthusiastic teaching methods.

Clip: http://homepage.mac.com/fahrenba/

Sun, 20 Apr 2008

FAQ Metrics

Ed,

Sun, 20 Apr 2008

Commitment to Right Livelihood

Ed,

Ed says, "Without a commitment to right-livelihood vehicles for personal growth can be like training wheels without a bicycle." (FAQ, 4/12/08, Rocks Process)

1. How can one tell if one has a commitment to right-livelihood?

2. How can one commit to right-livelihood? For example, I can commit to a daily workout program (except Sunday for recovery) for an hour for the next three months. I can understand this kind of commitment as I can see the result clearly (either I keep, or break my commitment).

At this point, these topics, and the language to support them, appear only casually on FAQ. They are central to the upcoming Workshop.

Fredian Psychology

The Right Livelihood Loop

and the Addictive Loop

both compete for resources. 

Depending on how

you control your "Rock"

you can operate in Right Livelihood

or Addictive mode.

Sun, 20 Apr 2008

Another shift

Ed,

Oh, I just see another shift:

Ed says, "We hold the notion of an evolving moment of now and hold that future and past do not exist other than as medicinal concepts"

Again, I've seen many times you answering that past and future doesnot exist but just merely as concepts, but this is the first time I recall seeing them as "medicinal" concepts.

Can you elaborate on how future and past is just a medicinal concept?

It seems to me that in TTP lingo, "medicinal" refers to not taking pro-active steps. I personally find the concept of past and future quite useful in the sense that we can "simulate."

We can draw (in the now) on past experiences to 'predict' the likely consequence (in the 'future'). This way, we don't have to touch the thorn of the roses every time to learn that it feels very painful to do so. This ability to "simulate" doesn't seem medicinal to me at all but a rather proactive step to live in a way that we don't have to bump into walls as often.

Also, just a note that "prediction" seems to be a necessary theme inscience (albeit a difficult one, as Bohr suggests). Scientists seems to be mostly interested in coming up with testable (falsifiable) hypothesis and test them, and then verify that assumption.

In many ways, when we "test" a hypothesis successfully it means that we can predict accurately how this event will evolve according to the hypothesis.

As a person who advocates dynamic system, you seem not to be a big fan of this causal type thinking in a closed system.

Thank you for reading carefully, thinking about things and providing interesting questions.

The notions of past and future, in an engineering sense can help to model the time domain behavior of a system.  A price chart is an example of a time domain model. It shows price on one axis and time on another.  Such models can support Right Livelihood.

Emotional obsession with "what I should have done in the past" or with "what might happen in the future" can be medicinal in nature.

Note: In past / future terms, all the data on a price chart lies in the past and none of it lies in the future.

In servo design (one of my interests at MIT), we simulate the behavior of control systems such as tracking devices and thermostats in order to optimize their behavior. 

In these cases we might come up with an objective function (bliss function) that balances accuracy, response time and cost, and then optimize to this standard; we design the system so that it responds optimally to an evolving environment. 

The design does not provide for "predictions" of the future.

I do not see the basis for your claim that back-testing "means" we can predict anything.

Servo Assembly

showing motor, gearing, position sensor

and cables for power and control.

The servo is part of a system

that responds, passively,

to information from the environment.

The design does not include

a crystal ball.

Clip: http://www.seattlerobotics.org/guide/

Sun, 20 Apr 2008

Metaformation

Ed,

TTP is, by design, empirical and evolutionary.

Thank you for noticing the recent shift.

Metaform, verb, transitive:  to change something by embracing  it differently.

Convert, verb transitive: to change something by operating on it.

While I can find several English words for changing something by acting on it, I am unable to find an English word for the act of changing something by embracing it differently. 

I simply make up such a word from from meta  = {after; beyond} and form = {shape; phase}.  An alternative synthetic combination, metamorphose already exits and describes something changing itself.

Metaformation is a concept I am developing for the Workshop and for my forthcoming book.

Sun, 20 Apr 2008

Sun, 20 Apr 2008

Looking for help in Oregon

Sat, 19 Apr 2008

The Essentials Carry Card - Already Noticing Benefits
 

Sat, 19 Apr 2008

Whipsaw Song

Ed,

Hope I'm not the only one.

Sure would love to hear some more of your music.
The trading principles are great too, but the music.
 

Fri, 18 Apr 2008

Disappointment

Dear Ed,

Thank you for FAQ.

I was struck by the recent post about the positive intention of disappointment.

Thu, 17 Apr 2008

Working Through Feelings about Strong Stocks

Ed,

Oh I get it now "Wanting to be a Hero" by buying clean stocks ... that is not the feeling ... I will work this out with the Tribe here.

You are right though ... what am I doing ... so many stocks on strong up trends and I am looking at these pieces of junk???

Thu, 17 Apr 2008

Receives TT Essentials Card

Thu, 17 Apr 2008

Knocking on Doors

Email to [Name] / CC to Ed ...

Just to say that advice about knocking on doors is naive. I always knew it was ... I have just received this from [Trading Group].

"We wish you well with your future endeavors and kindly request that you refrain from visiting [Our] premises."

No doubt they would call the police if I did. I was always worried about the Police when I went to see [Name] ... and that's pretty much why I stayed in my motel room for the 5 days I was there.

This has become a nightmare. I started out to write a system because I believed everything that was on your website ... because of the link to [Firm].

Thu, 17 Apr 2008

Whipsaw Song

Thu, 17 Apr 2008

Cool Video

Hey Ed,

Thank you for your support.

In Bluegrass, we have fiddles, mandos and harps.  Other places, I hear tell, they have violins, mandolins and harmonicas.

I wonder what kind of "blue grass" music uses a harmonica.

Thu, 17 Apr 2008
 

Thank you for sharing your process.

Wed, 16 Apr 2008

Breaking the Rules

You have been an inspiration to me ever since I first read Market Wizards a few years ago.

I have some serious issues with discipline. For example, today I canceled my stop loss order right before it was going to be hit and as a result suffered a much larger loss than I should have. I did this despite the fact that I had promised myself that I would never do it again.

I don't understand why I can not seem to consistently follow my rules.

If it is true that I am getting what I want then I no longer want to want what I want. I wrote the following to describe the mental framework I believe that I must acquire in order to become successful.

The Mind of a Winning Trader
 

Thank you for sharing your process.

Breaking The Rules

may lead to distractive drama

that serves to medicate

deeper issues,

like, say, perhaps,

taking responsibility for manifesting

Right Livelihood

Clip: http://digital-photography-school.com/

blog/break-the-rules-of-photography-

Wed, 16 Apr 2008

Sticking to a System

Ed,

I just purchased your book on Monday and am now waiting in anticipation of its arrival. I've already read the first few pages you've posted on the site as well as all the FAQs, therefore whetting my appetite (not my pants) for long-term Ed-ology.

Thanks so much for sharing your insights; perhaps the first steps have been taken in starting my own tribe here in [City].

Wed, 16 Apr 2008

Rules

Tue, 15 Apr 2008

Sense of Entitlement

Tue, 15 Apr 2008

Studying

see previous: FAQ 3/23/08 Reading, Doing and Learning
 

Thank you for continuing to study this question.

Studying

can provide valuable resources

to accomplish a task.

and can also provide excuses

for not accomplishing a task.

Clip: http://www.trcc.commnet.edu/ed_resources/

Wed, 16 Apr 2008

Trading Tribe Book

You might consider taking your feelings about <trauma> to Tribe.

Saving Others

can provide a way

to medicate your own fears.

Clip: http://www.beachsafety.qut.edu.au/

Tue, 15 Apr 2008

Whipsaw Song

Hi Ed,

I thank you for your confirmation [of the Workshop].

I wanted to congratulate you on your success with weight loss as well as completing the Whipsaw Song YouTube project.

I been listening to it every morning and it's been proven to be a powerful tool for me to stay on course. I thank you and the band members for the contribution and sharing.

Regards,

P.S. Cut the Loss, Drawdown, and News Flash in to the trash are my favorite part. Helping me out lot.

Tue, 15 Apr 2008

Trading Tribe Directory

Hi, Ed.


I went here : http://www.seykota.com/

tribe/Directory/index.htm  to find a Tribe in Carolina to point a friend toward.

All the Tribes appear to have lost their "TTID page", there are no longer any addys, meeting places/times, etc.

Of course I only use WordPad, do not have Bill Gate's latest greatest Office version, so maybe that is the problem??

You might consider taking your feelings about <upgrading> to your Tribe.

One Way to Medicate

feelings about upgrading

is to ask others to downgrade.

Clip: http://www.johncow.com/wp-content/

uploads/2008/03/hard-work.jpg

Tue, 15 Apr 2008

Wants a Telephone Interview

Thank you for your inquiry.

I dispense my notions and musings through this column, through my Workshops and through my books.

I wonder exactly what type of "folks" you imagine asking what type of  "questions" - and what advantage the interview format offers.

Tue, 15 Apr 2008

The Whipsaw Song

Tue, 15 Apr 2008

Donchian-System Update

I occasionally update the page.

Tue, 15 Apr 2008

Uncertainty

Hi Ed,

I am excited to see a TT workshop is available. I put my application with essay in the mailbox today. Many days pass and I recall thinking about sending a system update and not doing it.

I have progress to report; however I feel stuck.

This is a familiar feeling of not completing tasks.

I am developing the system on stocks, long side first and am stuck at the portfolio selection task. I also notice a deeper feeling just now of “not giving up on something.” I hate the idea of quitting or giving up or failure. I will not quit, I may get stuck and procrastinate, but I just do not give up, I really hate it. This is interesting, I have trouble finishing tasks and I hate to give up or fail.

Now I will report the system progress, you can include it in FAQ if it is useful or leave it out:

The entry is at an exponential average cross or at a swing high break, both work well. I use an ATR type MM stop and a parabolic like trailing exit. Both exits work well. Adds happen twice, the first one is close to the original entry and less profitable, the 2nd add is further along the trend price wise and much better profit wise. I think the 2nd add works better because the trend is in the no-doubt phase. Scaling out did not test better than my Trail. For sizing, I develop a program to allow simulations of all sorts, and I mean all sorts. The net result of the size exploration is that my risk level on individual positions can increase, but my portfolio heat needs to decrease.

As I work on the system I have an AHA; Pre-TTP my ideas about systems is that they need to predict what a stock or commodity will do with high accuracy.

The key is before TTP I felt the system should predict. Now I view my system as not trying to predict, it is just getting in if there is a trend and riding it.

Thank you for sharing your process.

The Pro-Active Response to Uncertainty

is adaptation.

Medicinal approaches

to the feelings of uncertainty

include drinking, drugs

and consulting fundamental analysts.

The Calculus of Uncertainty

does not provide any information

that lessens the risk of gambling.

The Gambler's Fallacy

confuses

case probability

with class probability.

Clips:

http://www.davenicolette.net/

articles/when_2b_agile.html

Tue, 15 Apr 2008

Defining a Personal Vision

Ed,

I would like my livelihood to consist of trading full time. 

I want to continue to manifest a constant growth in this field.  I would like to have a system in which I can lay all my convictions behind. 

I would like to implement this system while managing money for myself and others.  I want develop a track record that competes with the best in the industry (Bruce Kovner, Paul Tudor Jones, Steve Cohen). 

I see myself running a fund with a substantial amount of equity forcing me to push my own emotional levels and entirely explore my personality and  I see myself continuing to work on myself spiritually and emotionally to reach a certain point where I can expect the same out of a serious significant other. 

I do see my self with at least 2 or more children and them becoming a focal point in my life.  I want to continue to have an open and healthy relationship with my mother and father.  I also see myself playing a larger role in my younger sister’s life and spending more time with her.  I see my best friends playing a significant role in my personal as well as business life.

I want to continue to have health and recreation coincide.  Mediation will remain a pillar in my life and I will continue practicing it twice a day.  I see my self focusing on intergrading spirituality with my material life and to work on transcending my ego.  I also want to still have yoga, ice hockey, and weightlifting integrated throughout my weekly of my schedule.  I will continue to being committed to staying away from harmful substances including alcohol and red meat.  My two main recreational passions are to travel and surfing.  I want to put myself in a financial situation where I have the luxury to travel and explore the world with surfing as the constant in all my endeavors.  

Thank you for sharing your process.

If you wish to move forward you might consider the following:

1. Devise and back-test a trading system.

2. Tell all the women you know you want 2 or more children.

3. Tell your parents you wish to have an open and healthy relationship with them.

4. Tell your younger sister you wish to play a larger role in her life.

5. Get airline tickets and hotel room reservations to three surfing locations.

While you are doing these things, you might notice your feelings - and any other distractive behavior patterns you find yourself doing.

Weapons of Mass Distraction

Distractions

are typically a form

of self-medication.

Clip: http://www.buzzhumor.com/pictures/

Tue, 15 Apr 2008

Between Complacency and Apathy
 

Ed,

About the time our original thirteen states adopted their new constitution in 1787, Alexander Tyler, a Scottish history professor at the University of Edinburgh , had this to say about the fall of the Athenian Republic some 2,000 years earlier:

A democracy is always temporary in nature; it simply cannot exist as a permanent form of government.

A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury.

From that moment on, the majority always vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.

The average age of the world's greatest civilizations from the beginning of history has been about 200 years.'

During those 200 years, those nations always progressed through the following sequence:

1. From bondage to spiritual faith;
2. From spiritual faith to great courage;
3. From courage to liberty;
4. From liberty to abundance;
5. From abundance to complacency;
6. From complacency to apathy;
7. From apathy to dependence;
8. From dependence back into bondage.

Professor Joseph Olson of Hemline University School of Law, St. Paul , Minnesota, states:

In aggregate, the map of the territory Bush won was mostly the land owned by the taxpaying citizens of this great country. Gore's territory mostly encompassed those citizens living in government-owned tenements and living off various forms of government welfare...'

Olson believes the United States is now somewhere between the 'complacency and apathy' phase of Professor Tyler's definition of democracy, with some forty percent of the nation's population already having reached the 'governmental dependency' phase.

Your argument seems to imply that the cycle is inexorable; in that case, resistance is futile.

You might consider taking your feelings about <what people need to do> to Tribe.

Thinking can be Hard Work

People find many ways

to medicate feelings

of having to think.

Tue, 15 Apr 2008

TSP Extension - Trading Systems

Hello Ed!


Here are some thoughts about possible TSP extensions!

Approximately one year ago [Name] tells me you suggested to run optimizations for different futures. I mentioned to him that this would be extreme curve-fitting and hence I didn’t see much sense in it.

Ultimately I did this research to get a sense whether the indicators should be long-term or short-term. I see that most individual optimal values for the slow indicator (SR and EA) lie above 100. This seems to confirm your long-term point of view! I feel irritated that [Name] didn’t answer.

I don’t really know what to test or implement next. I think your index of the TSP page may be useful. For example: research on margin could be useful to achieve a realistic trading simulation. So far I only traded stocks and don’t have any experience with margins and their functionality.

Another problem I see for a later moment of now is this: I’m from [Country], but most futures are traded in US-$. How can I effectively manage currency-risk?

Yet another suggestion: Research on how to improve risk- and money-management. One way might be to introduce “overall-heat”. For example you could say: "when total risk exposure lies at xx% no further trades will be engaged”.

But this doesn’t necessarily mean that risk exposure will get less. When a future goes in the direction of a major trend with great momentum the difference between the actual price and the stop will get greater and so does the – at least individual – risk exposure.

Another way to improve risk-management might be the usage of correlation between futures to get a better diversification.

And my last idea for now is that there might be chart patterns that improve the risk / reward ratio significantly and hence should be traded more often.

But in the end I think that would be the search of the holy grail.


Let me know what you think about my ideas!

With best regards,

Thank you for your email.

If you feel irritation with someone, you might consider communicating your feelings directly to him.

If you are looking for a project, you might see if you can come up with an index that relates futures contract volatility to margin - so you can create a margin proxy for simulations.

The idea of using total portfolio risk as a way to lighten up may be a form of top -picking.

You might consider trend following as a form of pattern recognition.

For current postal rates, see:

http://postcalc.usps.gov/