Contributors Say

Saturday, July 31, 2010
 

Starting a Fund

Dear Ed,

Friday, July 30, 2010
 

Passover

Dear Ed,

NOTE: Although I am dismissed from the Tribe, my agreement was to provide feedback for the FAQ after each meeting. Here is my submission for July 29, 2010:
 

-----

I attend the Austin Tribe meeting. We start with a check-in, then a quick update on our progress regarding hot seat work and our projects. We bring the faux evidence of project success as agreed at the previous tribe meeting. Each member briefly presents their evidence, and the the other members vote in a pass / no-pass manner to indicate if the evidence presented fairly represents successful completion of the self-assigned project.

It is my turn for a hot seat. After a brief period of forms, my Process Manager (PM) asks if I am willing to work. I say yes, but he is unsure. He has the tribe vote.

Many vote "no pass". my PM asks me to turn up the heat on the forms. I do so. The tribe votes again and the results are mixed. I am given one last chance to turn up the heat on the forms. I try harder, and the Tribe votes "pass". I recall a scenario of being passed over by the pastor, for a special church project, in favor of another young man.

The setting is when I am about 19-20 years old. My current resource is to remain silent, sort of a "duck and cover" , accepting rejection. We role play with that resource. We discuss the resource of expressing my feelings. Several tribe members role play this resource on my behalf, as I need an example. I then try implementing the resource. It takes a few tries to get a good reaction from the role playing pastor. And then we try the resource of asking about the pastor's feelings. Again, other members role play this to provide an example. I role play this, and again it takes several attempts to get a good outcome. Still, my approach is a bit rough, and Ed suggests to enter into the conversation more smoothly. After one Tribe member points out that I don't seem to be feeling the feelings during the role play, others join in and support that idea.

Thank you for sharing your process.

Friday, July 30, 2010
 

Receiving His Wife

Thank you for sharing your process.

When You Receive Your Mate

your mate instinctively develops a desire

to receive you.

Thursday, July 29, 2010

Wants An Honest Opinion

Hmmm... I wonder what a dis-honest opinion is. 

Wednesday, July 28, 2010

7-1-2010 – Tribe Meeting Follow-up

Insights & dealing with Irritation

During this meeting there were a number of key lessons I took away.

1) The feelings you won’t (or don’t like to) feel drive your life.
 

2) Paradoxically our Fred drives us into situations where we will have the opportunity to experience those feelings and will keep driving us there until we experience them.
 

3) Many people repeatedly shut down and medicate in an effort to avoid that feeling and so set up a cycle to repeat similar circumstances again and again.
 

4) Unwillingness to experience feelings will ultimately limit your ability to succeed in that and many other areas of life.
 

5) On the other hand the mind has a radiator. When you get the intention to succeed you will radiate that intention to others.

During this meeting we also go through an interesting and powerful exercise regarding our projects. During this exercise we explain what evidence we will bring to the Tribe to show that we have succeeded in accomplishing our goal. The Tribe listens to the proposed evidence and each member gives a yes or no answer as to whether or not that meets the criteria for proving we have accomplished our goal. This exercise helps me clarify both the goal and the milestones to get there. It also helps me find a better way to be accountable to the tribe.
 

Ed gives us some homework. He tells us to make up the documentation we will need to prove that we have succeeded. While the documents are not real they are to look as real as possible and accurately reflect what we expect to accomplish. This gives me a much more concrete vision of the end result. It makes the goal and project concrete and I feel more motivated to push hard to accomplish my goal.
 

During this meeting I take the hot seat. I feel irritated lately and frustrated with things around. The group encourages me to exercise some forms and with their help I really get into the rolling of the eyes and the clinching of the fists and the tapping of my foot. At first I am frustrated and upset but eventually that starts to melt away.

Ed asks if I am having fun or liking the form and I crack a smile and admit that yes I am. I am having fun now with it. We role play a scenario with my mom in high school that use to frustrate me and irritate me. The tribe suggests some resources that I can use. I try them and like them and commit to using them.
 

In the days and weeks following, I have been amazed at how often I have started to medicate my feelings of irritation, but then stop and experience them instead.

In many cases I even share those feelings with others. I realize that one of the positive intentions of irritation is to show me that things are not going according to plan or that someone else is trying to deviate from expectations. Irritation serves as a warning alarm that something is off and needs to be righted. Failure to experience that feeling of irritation causes things (or people) to get further off track and cause even more irritation.
 

I realize I have set up a number of dramas in my life that are intended to provide me with frustration and irritation. I intend to unwind these situations. I also intend to start experiencing my irritation and acting to correct the situation that is causing it and sharing this feeling with others. I experience good results thus far and commit to continuing to apply the resources I learned in Tribe.
 

Wednesday, July 28, 2010
 

Workshop

Thank you for your inquiry.

Monday, July 26, 2010

Wants a Mentor

Mr. Seykota,

First off, let me welcome to Austin. I hope you enjoy living here as much as I have over the last 20 years. I am writing you in hopes that you may be able to provide me with some career advice.

To give you some background, I was invited to visit a friend who worked in a SOES [small order execution system] shop in the early 90's. Upon entering the office, I was taken back by the incredible energy in air. It looked exciting and fun. I was in my early twenties and I thought to myself, "This is what I want to be when I grow up!" I quickly began to search for ways to become involved in the world of trading. First I became a stockbroker, thinking this would be my opportunity to learn about the markets and trading. Turns out out I was very wrong. Basically, they wanted me to learn how to be a salesman. Didn't matter what I was selling as long as I generated commissions. I hated every minute of it and eventually quit.

Later, I became a broker for SOES shop here in Austin. I actually really did enjoy the job. I learned a great deal from the traders there. It was an exciting job. After a years, I borrowed some money and decided to become a trader in the firm. I quickly discovered that trading looks a lot easier than actually is. I learn a great deal about the psychological of trading ... a component I had never really considered. I read book after book, trying to find a way to get "in the zone."

However, after several years, it began to be clear to me that I simply wasn't good enough to be a great day trader. In addition, I was struggling with alcoholism and knew I would not be able to stay sober in that environment. I closed my account and became a floral delivery driver for almost a year.

I hurt very badly to give up on it. I loved trading more than anything. I found it to be the ultimate challenge ... testing instinct, intelligence, and psychological make up.

After a year, I started working as a market analysis for [firm]. Essentially, I wrote long term market commentary for their website ... In my spare time, I conducted research on various intraday trading strategies to be included in their signal generating software. Again, I truly enjoyed the job. I learned about trading futures and the advantages of trading future over equities.

My next revelation was seeing you give a talk at the Austin association of financial trading. It suddenly dawn on me that I have been doing everything wrong. I realized that trend trading in longer time frames was a far easier and a more efficient way to trade. I felt extremely foolish for wasting all those years intraday trading.

I now consider intraday trading to be a sickness and call myself a "recovering day trader."

Unfortunately, tragedy hit my life. My wife informed me that she fell in love with another man and wanted a divorce. Basically, she told me I was never going to make any money and the new guy was rich. I was crushed. In a panic, I quite my job ... sure I could find some way to make money in the trading world. Such has not been the case.

In the past few years, I have been offered positions with a few prop firms. However, they want day traders and refuse to be involved in that insanity again. I have sent resumes to a ton CTA's but have been rejected because of my 15 years as a day trader. I have applied for other jobs outside of trading, but have been rejected because of day trading past as well. So I sit here with many lessons learned and years of experience and no where to apply these skills.

I have essentially made three major mistakes in my career:

1) I never had a mentor. This is not from a lack of trying. I courted dozens of successful trader over the past 15 years. Simply put, they would say "no" because they didn't want to share their "secrets" or they would agree if I paid them an enormous fee.

2) I wasted too many years trying to trade equities. Commodities, forex, and futures are far better trenders.

Thank you for sharing your process.

You might consider taking your feelings about <right livelihood> and <deserving a break> to Tribe

Gambling, Day-Trading and Alcoholism

all help cover up feelings

Women Who Say

They are Leaving for Money

are usually leaving for something else

like intimacy

or, perhaps, another alcoholic

Clip: www.illuminatusobservor.blogspot.com

www.affordablehousinginstitute.org

Sunday, July 25, 2010
 

An Option Strategy

I wonder at what price you intend to place your protective stop for the 550 buy order - and how many times you plan to work this buy / sell combination.

Sunday, July 25, 2010
 

Agreement

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

Some People Play for Agreement

others, for intimacy.

Clip: http://www.squidoo.com/nodding-dogs

Friday, July 23, 2010
 

Gold Confiscation

Dear Ed;

The below might interest you :

A first step towards gold confiscation?

Starting Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year.

Thursday, July 22, 2010
 

Airline Truth

Dear Chief Ed,

Greetings from [Country]

Happy Birthday 2 weeks in advance !!

Thought you would enjoy this...

Sunday, July 18, 2010

From Control to Intimacy:

Receiving His Girlfriend

Dear Ed,

I feel like I make progress on my commitment this month. Shortly after my last update, my girlfriend tells me that she is not happy with our relationship. She even says that it may be best if we break up.

It does not bother me when she says this, I can feel that she does not really mean what she says. We continue to talk and I make sure to express my feelings and to receive hers.

Thank you for sharing your process.

Sometimes This Form Means

"I want you to get how I feel"

Clip: http://cdn.thefrisky.com/images/

uploads/woman_pouting_bed_m.jpg

Saturday, July 17, 2010

Trend Following and ETF's

Ed:

If it isn’t too much to ask, I would like to get your opinion on my investing methodology. I am a trend trader who uses end-of-day data and has typical holding periods of around 20 days.

At first I focused my attention on the Nasdaq 100 by using QLD for a leveraged long position and PSQ for a short position. Lately I have been applying my technique to other ETF classes in an attempt to reduce the equity curve volatility. Given that some ETF’s are relatively new, I can’t produce a 10-year backtest for example.

However, I can find ETF’s for which my algorithm works well and then select ETF’s with low correlation.

The table below provides the ETF’s I am using and the percentages allocated to each.

Here is the equity curve.
 

FAQ does not give specific trading advice. See Ground Rules, above.

The Calmar ratio is basically the system MAR for a 36-month look back period.  In effect, it "forgives" drawdowns occurring prior to three years ago.

Saturday, July 17, 2010

"BrettandSasha"

Hello Ed,

Thank you for your generosity in sharing your knowledge.

I understand you are extremely busy with your commitments and your new book.

If possible please could you help me with some queries.

Question 1:

Thank you for your questions.

1. The formula is not specific to "days."  Depending on the sampling rate of your data set, dt might refer to nanoseconds or millennia. For absolutely continuous computation, use dt = 0.  Of course this "moment of now" approach not translate to the discrete simulation model. For practical purposes, you can get a fairly close approximation to dt = 0 by using dt < TC/5 where TC is the length of the shortest time constant in your system.  You can test this by comparing the results from dt = TC/5 with those from dt = TC/50.

2. Expectancy Theory is a behavioral theory by Victor Vroom of Yale School of Management; he claims employee motivation increases with these employee beliefs:

1. more effort produces better performance.

2. better perform leads to rewards.

3. the employee likes the rewards.

Expectancy of a trading system is a relatively new concept; it is the mean of all the R-multiples in a series of trades, where R-multiples are the profit/entry_risk ratios for the individual trades.

I hold that the term "expectancy" conjures up notions of the future and of predictability, both of which seem somewhat counter-productive to sticking to trend-following systems.

I have no mention or use of expectancy in my paper. 

I notice many traders experience and express confusion about the expectancy concept.  I gather it is mostly useful as a traffic-building gimmick for its author.

3. You might consider taking your feelings about <sadness> and <arguments> to Tribe.

Sadness - Like All Feelings

has a positive intention.

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

Clip: http://www.topnews.in/health/

files/sadness.jpg

Friday, July 16, 2010

On Process Management

Ed,

Austin Tribe meeting #4 is, as always, incredibly enlightening. Each Tribe member has a project, a goal that must be completed by September 23rd. Each Tribe member talks about how he is going to prove the completion of the project. After each Tribe member says how he is going to prove completion, every other member says "Pass" or "No Pass." After a lot of "No Pass," we break into 3 groups of 3, and discuss how to solidify, simplify, and make more concrete our proof. We then get back into one circle and go around the room again, with each member saying again how he is going to prove completion. I feel stressed and pushed. I also feel, "This is exactly what I need!" I think for each member, there is increased clarity and more of a straight line between us and our goals.

I also attempt a turn as the Process Manager, for another member who is on the Hot Seat. I feel awkward and stressed and concerned that I am screwing up my fellow tribe member's Hot Seat experience because of my stumbling and inexperienced efforts to run the process.

I also feel tremendous support from the entire room. I can feel that they encourage me and accept me. The tribe's assistance and acceptance allows me to easily face these feelings, turn into them, and get through the process.

Friday, July 16, 2010

Dealing with Withdrawal

Ed,

After my latest reading of FAQ, I decide to do some self exploration. I think about the phrase "what I am not willing to experience is what runs my life." I get out a piece of paper and write down "what runs my life is withdrawal." I notice that I display recurring behavior patterns that associate with withdrawal in my mind.

I next write down examples of specific situations. The situations include:

1. when my 2 and 4 year old boys get too out of hand I withdraw
 

2. when I am around many people I do not know I have a tendency to hang back and not engage
 

3. when I start a project before long I look for the easiest and quickest way to finish just to get it complete
 

4. I have much focus for a particular activity for a short period and then search out something else (I get a guitar. Then I decide to start working out. Then I decide to learn a foreign language). I move from one to the next without completion of any.
 

5. I do not complain much to people other than my wife. I notice I pipe down and keep my mouth shut in many situations. I realize my father does the same.
 

Thank you for sharing your process.

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

Withdrawal

is typically a way to avoid feelings.

Clip: http://all4women.co.za/relationships/

withdrawn-husband.html