(Quotes from Ed in Red)

Ed Says

I now direct the same question to my mother. She is of the same accord. I tell them that I consider it disingenuous to agree to the terms of this meeting when in actuality they have no intentions of doing so. I tell them that I the only way that I will talk with them is in the office of a licensed professional councilor or therapist. I leave.

We meet with a licensed professional councilor. I’ll not go into the details of the meeting except to say that I’m glad a professional councilor was there. The councilor agrees with my decision not to have further contact with my parents right now and that I need to protect my son from them. I realize now that my parents are not going to change, that they have no desire to be anything other than the way that they are. I feel the sense of loss: The loss of a Norman Rockwell illusion of an intimacy-based relationship with a loving mother and father. I accept that. I accept them for who they are and for what they are. I have no desire for them to change. I am not responsible for them. And, with the help of my wife and son, the therapist, the Trading Tribe, and this support group, I feel free to get on with my life and have a wonderful life.

I also end all non-mechanical trading and now have an agreement with myself to only trade via an automated trading system that is mathematically backtested and optimized.

I feel a great sense of relief. I feel light as though a huge weight is lifted from me. I get up this morning and shout, “I’m free, I’m free, I’m free.”

Early this morning our three-year-old son comes into our bedroom and says to my wife “I just need to give daddy a kiss.”

Thank you for all your support.

08/01/market-psychology/

(Thank you for providing it!)

Dear Ed Seykota,

I am a fixed income fund manager at [Name] Investment Trust company in [City]. I have read your interview in the book, Market Wizard. After I read your interview, I become more interested in trading and now I am developing a trading system using [Name] method, exponential moving average, and money management method, stop loss. However, I still feel my knowledge is still short.

So, I want to participate your trading tribe program and develop my system helping other people’s trading. Would you please let me know how to join your TT program?

Many thanks for your help.

You can review the materials on the TSP (Trading System Project) pages, keep reading these pages and / or attend a Workshop.

Ed,

I am sending you this brief note to let you know how much your work on the TT and the TT FAQ is positively impacting me.

You do work that has immediate, practical value. I feel very fortunate to be influenced by your thinking and your overall work in the TT domain areas of study. The way I send and receive with individuals and groups is completely different (much improved!) as a result of studying your thinking and ideas.

Thank you.

Thank you for sharing your process and for your support.

Wants to Attend a Tribe

Every time that I read your profile in Market Wizards or see an article about you, I learn something new. It is certainly true that “when the student is ready, the teacher appears.” I do wish there were a Trading Tribe group in the [City] area. I do thank you for helping so many traders improve their performance and their lives. I hope to become one of those traders in the future. I ordered the book a few minutes ago via PayPal. Hopefully, that will be another step in my journey.

Thank you and have a great weekend.

You can start your own Tribe.  See the link to Tribe Directory, above.

Dear all,

I report in on my Big Wave („I give my wife and children all my love and support, and I give up control“).

I see that my daughter (9 y) stops using anger to hide her sadness and talks with me about her feelings. To me this is a really huge advance. As she speaks with me, I receive her love, and it is so intense that it shocks me. The communication with my older son, on the other hand, seems to reach a plateau after the big progresses in the past weeks. I accept that he sometimes just does not want to talk about his problems. I observe that both children do not talk openly about their worries with her mother, only with me.

I see enormous changes regarding communication and physical contact with my wife. I note a clear difference when she receives my emotions, and when she does not. In the first case, I can sense how my own feelings flow and disappear. On the other hand, I observe a divergence between what my wife says and what she does. She coldly mentions that she cannot fulfill my three “exigencies” (emotional communication, physical contact, and sexuality). I wonder about the word “exigencies”. After her clear statement I think that this is the end of our marriage. A couple of hours later, she mentions that she wants to work further in our relationship.

She sets clear limits for the amount of intimate contact we have per week. At the same time, for the first time in our marriage, she spontaneously and frequently demonstrates me affection in a physical way.

One day she suggests that, to improve our relationship, I should change, reduce my expectancies, and leave her the decisions about the opportunity of physical contact. I remember the past FAQ contributions about slaves and owners of people. The next day she is completely empathic. As she sees my sadness, she asks me to tell her more about it, and accepts my feelings without judging them or justifying herself. She also mentions that physical closeness will be a result of improved communication. When I compare her attitude some weeks ago and now, I see a definite and huge change in this area. The highs are trading higher, but the lows are as low as always. This means a higher volatility but not necessarily a trend. How does a trend trader behave in such a market? I remember my commitment to use a trailing stop with clear rules and date limit.

I observe that I talk differently, and this is unintentional. During conversations I start many sentences with "I ask myself if..." or "I don't know if...". The prompt "go for intimacy!" is also almost automatic. However, some gut reactions are still there, and I also observe some setbacks from my side. I experience an outburst of anger as my son hits her sister after losing a game. I am rude to him. After that, I feel ashamed. I explain my son my feelings and my uncertainty about what to do, and that I cannot stand when somebody hurts people who I love. He mentions that he understands me and accepts my reaction. I wonder if I teach him to react with violence to events that he dislikes...

I think that the openness of my reports regarding intimate aspects is very unusual. I wonder if it is instructive or annoying for the readers. I realize that I do not have feelings about the opinion of other people about my openness. But I accept that my postings might be irritating for some tastes. If this is the case, I kindly ask you to let me know.

With best regards,

Thank you for sharing your process.

Ed,

I notice that blaming is an excellent medicinal response to worrying-stressing-irritating situation.

I feel calm and quiet after blaming somebody or something, even though the underlying situation becomes worst or even exploding. Then the cycle repeats again, and again and again till I have to target pro actively and act on the situation, not the feeling. I finally notice that blaming doesn't at all, by no means, improve the underlying situation.

Thank you for everything you teach to us.

Thank you for sharing your insight.

and it seems to express the same ideas as Nick's project very concisely and elegantly.

I also like his summary a lot. I think it is a very important lesson for all of us. I feel happy for Nick, he has a chance to learn from the very best. I appreciate his dedication to learning the concepts and raising his potential. I honor him and you by putting the same effort in everything.

Thank you for your feedback.

Good evening, would it be possible for you to change my contact email address, or can you please explain how I can do it?

Yes. You can submit a revision to your TTID. See the directory link, above,

In the meantime she mentioned several times that she is uncertain about how me, since I change every week.

We both agree that we want to improve communication, intimacy, physical contact and sexuality. On Tuesday I write "I see many changes". On Friday I observe that some changes are short-lived, and that my wife still avoids talking about her feelings. While she likes the changes, she experiences fear about some of them, principally intimate contact. I receive her.

It is a choppy market, with changes going back and forth. I feel that my wife is great, a wonderful person. Our ideas about the relationship that we want are similarly; however, she seems to be afraid of and maybe not willing to change her attitude. I don't want to re-enter the drama "I help you / I fix you / I make you happy": she is happy and perfect the way she is. We both agree that we have to see if we match each other, and which changes we are willing to carry out.

I decide to set a trailing stop: the relationship must improve further. While some whipsaws are unavoidable, a huge drawdown is not acceptable. I define the rules that lead to a closure of the venture and write them down. I also set a time limit: until September 7, my birthday, I have to see a definite trend.

I see changes in other areas: my ability to receive seems to increase and improve. I get a steady flow of patients and even colleagues looking for a way to handle emotional problems. On most days I conduce one or more processes. Two people contact me to enter my Tribe.

I am worried about talking so much about my wife and our relationship and less about my own work on giving up control. But right now, I do not feel that I am trying to control people.

I am unhappy about spending less time with my older children the past week, and commit to change this.

I thank you all for your support.

Thank you for sharing your process.

Also how I understand from your EcoNowMics project that system is a spectral optical glass through which I recognize trend or the time when to enter or exit the market. IN that is why it is necessary to believe him I mean the system. IN that is why you need back-testing. My question is what else could give me the back-test. Of course I understand that it is not for me to predict the market. We are all against the prediction .At least prediction brings more feelings to the market. Also it is impossible the past result of some system gives the same result on future. It is just give us information about our feelings of trend.

What kind of information gives us back-testing?

This corresponds with my big wave of being a professional full time trader.

Thank you for your support!

Thank you for sharing your process.

Thank you in advance

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

For this, I am extremely thankful.

Thank you for sharing your process.

Wants to Join

Dear Tribe Leader

I would like to know what I have to do in order to join to your group.

See the Tribe Directory link, above.

Sir,

Your view on Jesse Livermore ?

Error

Dear Ed,

As I read 'The Way of Delays’ I wonder about the Excel-calculation in ‘2.2.1 First Order Negative Feedback Loop Response to a Step in the Inflow Rate’

At second 2 the level is at 0.5. I think that the level is at a 0.5 at time = 2.1 seconds.

As for trading, my back testing program tends to evolve well. I included multi-system-back testing but it doesn’t seem to improve bliss. I think this may come from high correlation between trend-following systems. I intend to search for and include a counter-trend-system. Maybe this will improve the performance. Another task I intend to work on is correlation between instruments.

All the best to you and yours!

Thank you for the catch.

What about my feelings which make me make mistakes during the trading. I think it is because I am not sure on myself. may be it is because not enough knowledge, may be it is because of afraid to lose or afraid to be not right. During the trading may be this kind of feeling try to show themself.

This kind of feelings most of the times is not any explanation. It looks like just trying me to protect from some things. These feelings look like protective feelings.

Then from here I make decision that if these feelings wants to protect me from anything then I must to protect myself by logically not to feel them.

I determine them so.

The system trade will help me not to feel the feelings. But if I want to trade by system then I need to believe him. For believing the system I need to test it of to understand that it is work correctly. And not feeling the protective feelings I need to protect myself by money management. By determining the level of lose beforehand. And do it all the times not looking the lose.

In one word if you don't want to feel that feelings which try to protect us and brings us to lose. Just to protect yourself logically.

Hi Ed,

What do you think of a day trading system using break outs from the opening range? I've done a statistical study of the opening range of and found that it contains the high/low of the day more than can be explain by randomness. Using this as my edge, I've developed a system with positive expectancy and using rolling minimum 200 days data points (for statistical significance) for probability calculations to incorporate into the Kelly formula for position sizing. I've backed tested the system from 1/08 to present and it yielded very good results.

My concern is that someone with much more knowledge and understanding of math, statistics, markets, probabilities, programming etc. - like yourself does not believe that day trading over the long run can work. So maybe I missing some key element or misunderstanding something about my system. Or is it that day trading can work but just not as well as a trend following system? Can one day trade with a mathematical edge?

I will be interested to pay you to review my system and the logic behind it for any suggestions.

Thanks Ed.

If you wish to have me review your system anyway, see "private consulting" at the end of the FAQ Ground Rules.

In this diagram the starting level and flow rate are both zero. As rate accelerates and then decelerates, the level rises.

After one-half cycle the level stabilizes as the rate crosses under zero and proceeds through negative values.

As the sine wave begins its second cycle the inflows restart and the level increases until the sine wave goes negative

and the inflow ceases, whereupon the level remains stable again through the second (negative) half of the second sine wave cycle.

What am I missing? Please help me understand.

Thank you in advance

Chartists are usually quite certain about their patterns ... in retrospect.

I re-read Tracker and do some exercises to understand lag. I attach a write-up. I get an "Aha" moment when I connect patterns I see in the market with system structures that may produce similar patterns. I look forward to the next installment of EcoNowMics.

Thank you for sharing your process.

Dear Ed,

It's me "shaking head" again. I have tried to shake my head more rigorously and have included meditation as part of my process.

It seems to have brought to surface rather deep-seated pain that originated from negative childhood experiences. Some memories are suddenly coming back and it's killing me all over again. Is this a good sign?

balu_shakes_it_off_2.jpg

Entry Signals FAQ

You might consider taking you feelings about <risk> to Tribe.

Thank you for the catch.

The Night Before Christmas

The appearance of a current crisis in humorous poems, songs and in late-night TV monologues may indicate the the discount is reaching its later stages.

Thank you for the catch.

Lucid Dreams

A second-ply Lucid Dream refers to the awareness that you dreaming about being aware of dreaming.

Thank you for the catch.

Almost Home - Song and Video

I wonder what you point of connection you have with this song.

Thank you for the catch.

I have some confusion about the following:

Level {units} = Level + (Increment - Decay)

You introduce two new terms for which there is no definition--Increment and Decay. I wonder if you can provide a definition of those terms.

Also, my earlier comment about the sine response in the no feedback system still applies to the sine response in the negative feedback system. At no point is the inflow negative. The drawing of the system shows a system where the inflow is always positive, and does not show a system that has inflows and outflows. You might consider starting the sine function at its lowest point so that the inflow rises to a peak, then returns to that lowest point; all of which are positive.

We are working to clarify the section.