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 stay out of any positions.

Answers

http://www.ft.com/cms/s/0/8dfefd1c-e608-11dc-8398-0000779fd2ac.html?nclick_check=1

I also recall the management of the firm showing no interest in hearing about such things.

Diversification of Lag Parameters

Dear Ed,

Following the plan below I attach an excel file of the test results.

Note that my datum system S (140/20) is the second best performer in the set (Bliss 0.76); the optimal performer is (180/20). I use the 140/20 system as my datum because it is logged on the TSP pages.

The combination of two systems does not offer any performance improvement over the range of parameters that produce optimal performance for system S (trend metric = 100-180 days). I believe this because there is little diversification between the two systems in this region, with both having similar trend definition metrics (S; 140, and T; 100-180).

Once the trend definition metrics move further apart there is a greater improvement in the bliss values between the combined and single systems. This never exceeds the optimum, possibly because the fall off in performance of system T as is moves away from its optimum parameters is too great a burden for any diversification benefit to overcome.

The combined systems do produce a much more stable bliss curve across parameters. I believe some of this is due to the diversification benefit. However, at least some of it must be due to the fact that the combination always contains an optimal system (S). I am not sure of the best way to try to separate out the individual components of performance improvement.

B{S&T}(L0) is not exactly equal to B{S}L0 (see below), although it is the same to 3 decimal places. My investigations confirm the small discrepancy is due to the granularity effect.

I am happy to proceed further, if this suits you please indicate and I will call to discuss direction.

Changing the lag parameters may not produce much of a shift in the phase angles of the cycles - so the diversification may not produce much benefit.

Eckhart Tolle on Oprah

Hello Ed,
 
You might like it; there are few sample clips on the web too.
 
Things are wonderful here and I hope you and your family is doing well.
 
Here is the link to Oprah: http://www.oprah.com/spiritself/ss_oaf_tolle.jhtml
 

Sir,

I notice that there are no more recent posts than 12/31/2007 on the FAQ index page. I feel the emotion of missing the wit, wisdom, and sharing of those who participate in the FAQ list. I wonder if you intend to continue with the FAQ index. I am grateful for all you have done so far. And I want to know if and when your next book is ready, as I intend to purchase it.

Thank you for your support.

Hi Ed,

Wanted to see if you are OK. I noticed the FAQ has not been updated this year. I figure you're hard at work on other things - maybe another book?

How have you been?

Let me know you're ok.

Thank you for your support.

Dear Ed,

I accept you the way you are. I celebrate all of your achievements as well as the progress towards completed or non-completed achievements.

I feel peaceful and relaxed.

Thank you for your support.  The video is in final edit.

Hi Ed, hope your are doing well. Miss your FAQ postings.

OK. Thank you for noticing.

Mr. Seykota,

There are no new FAQ's for January and February. Just curious if everything is ok? I hope all is well!!

Thank you for your support.

Daily Charts Errors

Dear Ed,

I notice that a few of the charts are not updated daily, i.e. Eurodollar for some weeks now, and recently Crude Oil, Brent crude.

Thanks for your guidance and teachings through these daily charts.

Thank you for the catch.

Greetings Chief

Dear Ed,

For many weeks now we at the [City] Tribe have been searching for additional FAQs...

Early in Jan '08, I had mentioned my hunch that 5 years is probably a long enough period to answer FAQs, and that we should be prepared to do away with our almost daily fix ...

Somehow I wish my hunch was wrong ...

I would once again want to thank you Ed, for being the shining light in my life, someone whose character passed every test of highest integrity, in word and deed.

I have absolutely no doubt, that I have sought to model my career and livelihood on the path that you have indicated, and that you have been the most significant influence on my adult life.

Little did I know that reading that one interview in Market Wizards in 1996 would lead to such a wonderful journey on seeking the Holy Grail for trading and living; from locating your telephone number through the net, celebrating that occasion on the night of Aug 22 1998 with my wife, and then calling you with hands trembling with excitement, resulting in meeting you in May 2000.

I re-read FAQ again and again, and have many of your answers in a word file segregated for trading rules and emotional management, with different font sizes and highlights, which I can access quickly - to remind me to keep on track, as revision for my continuing education.

You have the countless good wishes of all the lives that you have touched, behind every wish that you may seek to fulfill.

Thank you Chief.

Sincerely,

Thank you for the encouragement.

Ed,

I see that FAQ is not updated since 12/07. I wonder if your intention for TTP to disappear and becoming a passing AHA is realized. At any rate, I wish to express my gratitude for the insight and wisdom that you provide on FAQ over the span of many years.

Thank you.

Thank you for your encouragement.

Several years ago this woman found a sick, malnourished lion cub in the jungle. She took the cub home and fed him and brought him up until he was too big to keep anymore. Then she made arrangements with a zoo in Colombia, South America, to take the lion. Here's a video of what happened when she went to visit him in the zoo for the first time.

http://www.telestereo.com/Archivos/video.html

Thank you for the link.

Excel rounds the 1995/11/22 Unit Size to 11700, as your program originally did. You modified that to match some of the readers who were rounding up to 11800. Once I made the same modification, my figures match yours exactly.

Thank you for sharing your success.

Another Unusual Move

Ed,

I just had lunch today with an old broker friend. He told me that a client recently called and said: "I need your help, can I meet you in your office in an hour?" The client arrived with a dusty old bag full of gold and silver coins that he has had in his house since the early '80s. He sold all of it. It was about $100k.

I was thinking about filling my basement with wheat. Perhaps instead of a lawn, I should grow soybeans? Even the toilet paper/AAA paper arb is looking good. ;)

Thinking the market is going the wrong way is generally enough to keep it going.

Thanks,

cloaking.html

Toppish?

Let me know when you take some of your own money to the metal markets.

I am reading MW by Shoe Wager. re-reading it for __ time. on page 172, don't you think you may be too confident or even ir-revering in saying what you are saying? we own u, not the other way around. or... did you learn them by now already? talk to me.

Huh ?

My desk partner has close to 100 mil to manage (He is only 25). He has a clear plan. I have very little to manage so far. I don't have a clear winning plan. I feel I can do better. I want to manage just like he does. I have it set up to really make it happen but I am lacking in winning plan. Hope you can give me insight.

Another way is to work the Snapshot Process with your Tribe.

Hello Ed,


I have been working on the Trend-Counter trend by doing the following things:

Trend-Counter Trend mode is defined by the result obtained by applying a pure EMA cross.

I see several ways to deal with this problem (may be I made mistakes I don’t know):

1) As the cross of moving average is like a bandpass filter on which we focus when the filter cross the zero value, a first idea is to study the “behaviour” of the filter on the series pack and look for if this behaviour explained the mode (Trend–Countertrend).

2) In the case 1, the indicator is the one that is used in the trading rule itself; here in this case I search an indicator which can explain the mode.

3) In this case I examine the distribution of the return on multiple horizons and notice differences which can explain the mode.

1=> MarketNature.doc

2:=>TRF_MMC.doc

3:=> in progress

Concerning the transaction cost, I totally agree that it’s an important factor particularly in high frequency, when short period are put in the filter, the number of trade and costs associated can destroy the PL.

At this step (mode detection) it will translate all the PLs (positive and negative) but not the mode itself, in the worst case the positive can be a zero and the negative a more negative one.

As soon as I finish the return part I will send it to you.

Thanks again for your comments and support.

07/10-year-old-microsoft-certified-professional/

That is such a cool answer, and gets cooler the more one thinks about it. So many things I learned from you, learned them so well that I have forgotten I learned them; they are just like walking down the street.

What have I been up to? Teaching children in our culture about our roots, a few magic shows here and there.

Thank you for sharing the memory.

I guess there may be some issue with myself that I am attracting these feelings. However, I am pondering if I can acknowledge and even encourage those story tellings when the tribe is about sharing feelings.

Just as I write this, it hits me - if the tribe is about sharing feelings, then how about sharing my feelings with him? Hmmm, just thinking about it I feel very uncomfortable, as I worry that I may be driving people away because it feels like criticizing other people. As in, hey, what you are doing is annoying me - and what you are doing is talking too much. (I'd feel pretty bad if someone says that to me)

Hmmm, this is certainly an interesting observation to me ...

Thank you for sharing your process, in real time, as you go through it.

at-grand-central-station/

Thank you for the link.

I know you had some issues with a shoulder injury and I imagine that this may be limiting you for the time being. If so, may you get well quickly and may you get 'back in the saddle' soon. If no, please disregard the above . . . except for the greetings of course


All the best,

Thank you for your support.

I received an email today from another tribe that stated you are working on your new book and everything is Ok. I am glad to hear you are well. Good luck with your book and the losing 50 pounds project. I am back at work learning Excel. My computer crashed and that put me a week behind but I am back on it now.

article.cfm?id=8119

Those people willingly, voluntarily and "bravely" confront and experience "out-of-limit" pain (through suffocation), and the result is that 82 youths have died since 1995.

It seems like feelings may be conflicting: to willingly experience out-of-limit pain may cause permanent damage, and that feeling is fear whose positive intention is to risk control (i.e. avoid the out-of-limit pain at all cost because it is "dangerous"). Yet, to the extent that I allow the fear to withhold me from experiencing out-of-limit pain, I can never convert out-of-limit pain as my ally?

Thanks Ed.

http://zipskinny.com 

Thank you for the link.

Good Day.

I am an avid reader of the FAQ on your TTP site and just wanted to know if you are still going to carry on updating it?

Thank you for your support.

At the check out other members also indicate that they have the same problem. With this realization I pay more attention every time I have the urge to take a trade before entry signal.

What to do when you should do nothing?

Thank you for your thoughts.

2006_08_06_archive.html

(Jurassic Park & Wall Street follow up, 9/20/07)
Ed, "The item is on page 24:"
(The item is on Pg 21 of the PDF (or pg 19 of the report), as you first mentioned)

Thank you for the catches.

God bless - hope all is well

Thank you for the encouragement.

I have enclosed a new TTID page for the directory, according to the website instructions.

I also request that the directory page for the Vancouver, B.C. TTP group be removed, as it no longer exists. The group has been relocated to Bellingham, Washington.

Thank you for your assistance.

Ed-ucation

Hi Ed,

Do/did you manage www.ed-ucation.com ?

I recall using the phrase during a run for Washoe County School Board.  I have no connection to the website now.

Hi, Ed

I added a Color Legend below the graphic after I got home from Tribe tonight. Thanks for the validation. I appreciate your JOY at my success! Way to express those feelings!

Thank you for sharing your process.

I begin extending my arms, trying to reach farther, grasping air to extend myself even more. The tribe encourages me to stretch hard.

At one point both arms are fully above me and I alternate reaching higher, left and right. Ed asks me to remember a time I experienced this motion before, and who was with me at the time. I can't think of any similar events. Ed repeats the question a couple of times.

I remember being with my brother and two cousins in the 7th grade. We are in the shop, and a ladder leans against the rafters. I hang from the underside and pull myself up, hand over hand, four or five rungs, then back down. A real gymnast.

My cousin then goes to the ladder and pulls himself up the entire length, maybe twenty rungs.

I don't feel like exerting the requisite effort to go the distance. What's the point, anyway? If I was by myself I certainly wouldn't bother, but he's younger, weaker, and skinny to boot. I feel that in the group, I have to prove I'm as good as he is. I make it to the top, but would not have done it if left to my own devices.

I realize at Tribe that the positive intention of feeling like "Left to my own devices, I wouldn't be doing this," is to remind me that my own devices aren't always in congruence with my desire to live a life of high intensity and high integrity.

In the course of the next two weeks I repeatedly come up against the wall writing my program. Left to my own devices, I'd bag it. What's the point, anyway? I feel tension throughout my body, reach higher to pull harder, pretty much hate it, but keep going.

This morning the project stands essentially complete. One minor cosmetics matter remains to be improved, for esthetics purposes only, a mundane trifle. Already I'm walking toward the next project, the next ladder.

Dammit. Do I have to climb this one, too?

Thank you for sharing your process.

The obstacles give me the necessary bearings so that I can make adjustments to continue walking. This model may require some kind of risk management though as it only applies if the obstacle is not so crippling that you can't continue walking anymore.

Thank you for sharing your process.

Is there any chance of establishing a correspondence? I’m a portfolio manager/systems trader at a large hedge fund and a great admirer of your of your market wisdom. By current hedge fund standards my results have been good and relatively consistent but I am constantly seeking to take myself to the next level.

Is it possible to meet you?

Perhaps.

http://www.youtube.com/watch?v=Ofn8-3SWd8M

Classic blowout.

Hi Ed !

I recall wondering last week what you are up to these days, as FAQ is quiet for a long time. This week I get inquiries from two other Tribesters asking about you.

Hope all ok. Maybe you're visiting warmer climates.

Thank you for your support.

I have recently been in contact with [Famous Trader]. He is a colon cancer survivor. He has provided me with several other recurrence defense strategies.

Each day I feel I am risking my life, I feel and trust I am on the winning side, and the speculation makes life very vivid and worth living.

Thank you for sharing your process.

Ed,

Would you like to start trading the R-Bob crack as it
is very low now @$6.70.

Last year, the crack went from $7 in end Jan to
$15 on 20th Feb.

Thanks

Trend followers follow trends without considering if something is "low" or if it has a seasonal pattern.

Alright, I admit. I am a bit afraid. Nevertheless, it’s done.

psychoshowercurtain.htm?KBID=3845

Hi Ed,

I wonder if you can recommend a couple of books about the stock market that is worth spending time reading. I've been in the market for about 2 years and have already been through the classics, market wizards I, II, III, reminiscences of a stock operator, trading in the zone, the battle for investment survival and so on.

Would be glad to hear from you.

Best regards,

tattoo%20series.htm

Ed,

I check for new FAQ pages at:

http://www.seykota.com/tribe/FAQ/index.htm

I find no new FAQ's for 2008. I wonder if FAQ is discontinued or there is some technical difficulty with the site.

Thank you for your continued work on FAQ.

Sincerely,

Thank you for your support.

Dear Mr. Seykota,

I am a trader from  [Country] and I enjoy very much researching traders who had been doing especially well during last decades. I also look for traders where trading serves to experience more education rather than inflated life style. Where trading serves as a mosaic in the general impression of markets, psychology and life. Understanding all participants and the environment surrounding us and understanding oneself in this environment.

I heard your statements concerning investing and trading on a dvd that I ordered from the U.S. together with several other dvds in a series called "market wizards" interviewed by Jack Schwager.

I liked your answers concerning pain and joy. Is it joy to lose or is it pain.

I guessed that you were referring to that the human organism is always in a "channel" of joy and pain to set his emotional cornerstones for living (or better yet surviving). Well, it is a joy to loose when you consider losing as giving you a signal and education that you are on the wrong track. Then (e.g. after being stopped-out) you can start-over again. That means losing gives us orientation. Like being sick gives us orientation for being healthy. And you speak about the joy and pain of waiting at the side lines. Joy of having cash disposable. Or pain of not participating and letting prices go.

That also means is it really a joy to see prices rise where oneself is participating. Yes it can be, but the fact is that we do not participate in the explicit moving of the price. We are not creators we are more likely passengers and profiteurs and we are expecting straight track to travel. A track that is always showing transfers to other tracks with unknown waiting time at the sidelines.

If I might ask you one question how much time you take waiting in you work? Is waiting time longer or travel time longer. Is it the case that waiting time after long succesful trips is probable to be longer because it is more unlikely to find destinated trains after travelling to long into unknown territory?

I would enjoy to receive an answer from you. In the interview I heard from you it becomes clear you love your dedication. At the same time it becomes clear you act carefully because others make the trend.

I apologise contacting you as a strange person. But as you are known to me through this interview I dare to introduce myself.

I would be glad to hearing from you.

Best wishes,

Monday I will go to the library and check out more plus a video I saw on their site. I just want to do something TODAY to move forward as I am tired of stopping. I drank 3 Dr Peppers and just 3 coffees last week.

Thank you for sharing your process.

Hey Ed,

How is your weight loss coming along? Hope its going well and the enthusiasm and momentum you displayed at the last TT meeting is continuing!

By the way, I suggested you check out the book "You On a Diet" (from the same authors as You! The Owners Manual), however at the time I had not personally gone through it, just heard good things. I recently had a chance to check it out and I was impressed by it. I suggest you take a glance through it next time you are in a bookstore.

Clip: http://www.l2si.speculist.com/FatCat.jpg