|
December
11-20, 2003
|
Questions
(Quotes
from Ed in Red)
|
Answers
|
|
Sat, 20 Dec 2003
US-Canada Borderline Follow-up
See:
US-Canada
Hi Ed !
News on TV:
Scare
at the Vancouver Airport
Looks like just the wrong time to be there for me and many other good
people.
BYOD - looking for it ... still haven't found it ... except wrong time at
the wrong place and many insights as a result.
PG Tribe Process went great yesterday, I was a sender and a receiver
learning a lot on both sides ... got lots of encouragement and provided
myself with lots of good advice.
The best,
|
You
might check for traces of BYOD (Bring Your Own Drama) in the way you behave
at the moment you encounter resistance.
You
might get irritated, argue with the immigration agent, act out anger in
various ways.
Alternatively,
you might acknowledge his positive intention, take a moment to receive his
feelings (likely he is going through his own drama) and assist him in
calming down, perhaps even to the point he awards you a flight pass.
Your
real intentions not only effect your internal experience, they effect
everyone else, too, and the ripples soon splash back on your own shore.

The
Law of
Inevitable
Transference
If
someone has a stomach ache,
you
can get it directly
(by
receiving it and disappearing it)
or
indirectly (by falling into their drama).
Clip:
http://home-1.worldonline.nl/
~ac29096/gr/dorx02b.gif |
|
Sat, 20 Dec 2003
Kinds of People
"There are two kinds of people: ones who divide things into two types,
and
ones who don't." - Ed, 12/19/03
I thought there were 10 kinds of people: ones who understand binary, and
ones
who don't.
Merry Christmas !
|
Q:
How many mathematicians does it take to change a light bulb ?
A:
Ten - One to do it and eight to watch.

Binary
Indicator
Clip: http://familytreemaker.
genealogy.com/light.jpg |
|
Fri, 19 Dec 2003
More
About Ugly
See: Ugly
Update
Ed,
I read this post and would like to share more. Although this is also DIM,
perhaps we might get half a DIM if we sum up both.
The fellow's drama rather mirrors mine, although my issue has something to
do about disliking and avoiding rejection and lack of recognition.
I also give off a
vibe of being mad at women. Actually, in the past few years, I have
been really mad at some girls who "messed up" with me.
I even got to the
point of wanting to feel feared by some of them. Strong judgments,
prejudices and drama fueling more drama were the results I could get.
The judgment that there was something wrong with me has also occurred to me.
I felt somehow trapped as I could not find a way to break free from the
cycle of drama and it seemed that I was somehow doomed to failure in my
emotional life.
And, now, switching to SVO-p, all I can tell you is that I am starting to
practice TTP with my family. I am also receiving people in the process of
life itself. And if the trend develops, I might even set up a tribe nearby,
like the Austin fellow did. I am finding great joy in the experience.
Best regards, |
You
might try substituting the word "markets" for the word
"women" - and see if it rings a bell.
As
you receive others, others receive you, you receive yourself, and the
drama factor decreases.

When
Fred and CM Communicate,
you
receive yourself
and
drama tends to disappear.
See
link to TTP, above.
|
|
Fri, 19 Dec 2003
Incline Village Tribe Membership
Ed
As you remember, we visited on a few occasions as I was Chair and President
of [XXX].
I am currently, President Emeritus and on the [XXX] Board, on the Board of
the [YYY] association and chair a PR communications committee as well as
being on their long range planning committee.
I would like to join your Tribe with those commitments required.
If you require more, I will email over the Bio from the [XXX] newsletter.
Looking forward to hearing from you.
Best Wishes,
|
To
Apply to
the
Incline Village Trading Tribe:
Email
resume and
1-page
essay describing your understanding of TTP.
Include
your phone number and times available for telephone interview.
Full
participation, including consistent attendance, is essential.
The
Incline Village Trading Tribe
meets
every two weeks.
See
Ground Rules
|
|
Fri, 19 Dec 2003
Pre-Defined Risk
Hello!
A suggestion to the Risk Management paper. "Risk is the PRE-DEFINED
possibility of loss". Understanding the difference between uncertainty
and risk may cause an AHA.
Merry Christmas from Finland
|
Perhaps
you could re-write your suggestion in SVO-p; you might clarify:
1. Exactly whom
you recommend to do the defining.
2. Exactly when
you recommend doing the defining (pre-what?)
AHA's,
in the TTP sense, rarely result from transference of understanding from one
person to another; AHA's typically arise from internal communication between
Fred and CM.
Transference
of understanding can easily become an element of drama.
You
might like to take a look at your comfort level about expressing feelings as
well as ideas.

The
Wheel of Definition
Define
follows Analyze,
follows
Verify,
follows
Prioritize,
follows
Measure,
follows
Define.
So
Definition is also Pre-Definition
Clip: http://www.webcriteria.com/
images/wheel/define.gif |
|
Fri, 19 Dec 2003
Can't Get Across US-Canada
Border
Hi Ed !
intentions = results ?
My intention was to share myself with the tribe and I was stopped at the
US-Canada border, at Vancouver.
[The immigration
officials do not accept my going to see my mentor as a valid reason for
entry.]
I have never been
in any conflict with the law in my life in any country in the world and have
traveled freely anywhere I wanted to until yesterday. Did terrorists succeed
freaking US people out ?
I'm thinking about
finding a good lawyer and suing for damage done, will talk to my lawyer
today about it
One thing that came clear yesterday (I thought that I've been mentored
to learn how to help myself and others through TTP).
You said, few
people get together to discus markets and how it works, no mentorship, thank
you for clearing it up
feeling disturbed about it and empowered at the same time for I know who I
am and am clear on my intentions
intention = be a great husband
I have been
married for 18 years, not without ups and downs but with lots of love and
support from my wife.
intention = be a great father
have two boys 14 and 15 years old , they say I'm the best father in the
world. One son was talking today about going snowboarding in two weeks which
is about five weeks before the doctor said he'll be able to do it, [I
encouraged him to experience his pain] TTP works.
intention = help others
been coaching soccer been teaching at the local college for over six years
as a volunteer been on the board of directors of CFDC (Community Futures
Development Corporation) for more than five years and too many other things
to mention here.
intention = financial freedom
been owner of [Name] franchisee rights for northern B.C. until sold; own a
hotel which produces passive income for modest retirement now.
intention = be one of the best traders in the world
on my way there
one day at a time in this ever evolving moment of now one of the customers accounts
up last year over 3% ( when most people lost $ ) and 62.8 % so far for this
year.
My calendar today says : Good intentions are no substitute for action ;
failure usually follows the path of least persistence.
Love is life ... and if you miss love, you miss life
Thank you for teaching me so much. I'm going to have my tribe meeting
tonight (with my family) where we'll teach\mentor and learn from each other.
The best to you and yours, |
Yes,
family is the essential tribe.
It
appears you also have an intention to create drama at the borderline and
then have many insights.
A
mentor is a wise and trustworthy counselor, typically advising on your
career.
Tribe
members rarely advise each other; they generally provide encouragement ...
to experience your feelings, connect Fred and CM and provide your own
advice.

Canada
- US Borderline
BYOD
(Bring
Your Own Drama)
Clip:
www.othergallery.com/
images/simon%20hughes/
canadausaborder.jpg
|
|
Fri, 19 Dec 2003
SVO-p
see: The
Future Dec 18, 03
Dear Ed,
thanks for your comment on The Future. I am trying to understand it
now and come to some conclusions. But in the mean time, could you write few
sentences to explain the SVO-p technique?
Thanx
|
SVO-p
grammar starts with the S-ubject, follows with the V-erb (in -present tense)
and ends with the Object.
Examples:
SVO-p:
I drive the car.
SVO:
I drove the car; I will drive the car; I have driven the car.
OV:
The car was driven. (hides the subject, avoids taking responsibility for
driving)
OV:
Trespassing is forbidden. (hides the subject, avoids taking responsibility
for implementing the rule)

Warning
!
This
Sign Breaks the Rules
Spectators are
not permitted beyond this point. Any spectator entering the prohibited
area will be regarded as a trespasser.
Thus, the penalty
for breaking some secret guy's rules is that some other secret guy (maybe
even the same secret guy) intends to regard you as a trespasser, in the
non-existing future.
Clip: http://www.carsrally.ca/
images/Prohibited_Area_Pink.jpg
|
|
Fri, 19 Dec 2003
Whys and Wise.
Hi Ed,
Here is an idea I have:
The whys trader thinks "price moves, there must be a reason, until I
know the reason I refuse to buy/sell". If I know as much as the person
moving the price, then I can participate and (vicariously) feel powerful and
influential. I want to be one of the leaders and not feel inferior following
an unknown. I want to be wise.
The wise trader knows "price moves, someone is moving it, let me move
with it and make what money I can". I do not know who moves the price,
but it is not important for trading. I do not want to ask whys.
I can get a prize either for
1. Knowing the
whys of price moves or for
2. Wise trading to
make money,
but I cannot do
both at the same time. Nor should I confuse either one with the other.
Indeed they each require me to think in opposite directions, and if I do
one, it is not a guarantee I do the other well!
This appears to be one more example of duality : each is incomplete
without the other but neither implies anything about the other.
Regards, |
There
are two kinds of people: ones who divide things into two types, and ones who
don't.

Some
Things are Black and White
Under
magnification,
various
shades of gray
resolve
to black and white.
Clip: http://marvin.mrtoads.com/
halftones.html
|
|
Fri, 19 Dec 2003
Stress
Dear Mr. Seykota,
You're cool! (first rate). Thank you for your interest in helping other
traders deal.
My problem is that I feel stressed when I study the commodity markets. I can
feel the tension in my head, chest, and tightening in my breathing. I also
get these feelings when I click and refresh to watch live quotes and my
constantly changing equity.
I'm only 25 yrs old, yet have had periods of occasional chest pain, which
I attribute to stress.
Do you feel
that the TTP can help with decreasing my stress response?
Do you ever feel stressed about your trading, Mr. Seykota?
Incidentally, about your history. You mentored Michael Marcus, who in turn
mentored Bruce Kovner, who's on the Forbes 400 !
Kind regards,
|
You
might like to consult with a medical professional about chest pain.
FAQ
does not recommend TTP for people with pre-existing medical conditions,
particularly ones in which stress, strain and emotional intensity may
aggravate the situation.

Warning
!
Good
Risk Management
is
Essential to Healthy Trading
and
to Health in General.
Clip: http://www.clipartguide.com/
clipart_halloween_pics/skull.gif |
|
Thu,
18 Dec 2003
What
Do You Think #2
See:
#1
Browsing thru the www.turtletrader.com
site I came across this info: "Trading correctly
is 90% money and portfolio management, a fact that most people want to avoid
or don't understand." I also came to the conclusion that the entry
point is only about 30% of the remaining 10% of trading.
What do you think?
regards
|
I
think you like to come across things on the net and then ask me what I think
about them.
You
might check your feelings about making decisions, on your own, without first
consulting an authority figure.
FAQ
is a classroom forum in which traders can ask questions, become examples,
and support each other. FAQ does not
offer instrument-specific trading advice, or recommend specific trading
system parameters, See Ground Rules. |
|
Thu,
18 Dec 2003
What Do You Think?
Hi Ed,
Recently I came across a statement on the web:
"[XYZ] expects mature markets to behave in a more choppy fashion.
Today's major currency markets (EUR, JPY, CHF, STG) are mature and too
random for conventional trend-following methods.
The
'baby' markets of the Pacific Rim currencies, on the other hand, behave
today's like mature currency markets did as "babies" of the early
1970s."
Do you agree with this? I mean, I know you "should go fishing where the
fish is", but do you think trend following is not for
"mature" markets?
All the best ...
|
Attempts
to predict which markets have better trends, by bifurcating them into Baby
and Mature, may be an attempt to apply "fundamentals" to trend
following.
You
can also bifurcate markets, by beginning letter, into A-M & N-Z.
You might even like to make a special group for Co-type Co-moddities:
Cocoa, Coccoons, Coffee, Coke, Copper, Corn and Cows.
Another
bifurcation (consistent with Trend Trading) is: markets that are trending
(by your definition of trend) and markets that are not trending.

Things
Go Better with Coke
like
smelter ovens
Clip:
http://www.ciicarbon.com/
images/left.gif |
|
Thu,
18 Dec 2003
Discouragement
I am extremely discouraged in my attempts to learn how to trade. I have
studied many methods, most of them trend following in nature.
I
don't trade anything until it shows me profitability in my back testing, but
there is nothing that is showing positive results.
I
have been trying and testing things for a year now non-stop and nothing is
looking good. I am sure following and dissolving feelings is something
important, such as my feelings of being discouraged, but no amount of
releasing is gonna make up for the fact that I can't find anything that
works.
Most
of the questions and talk here seem to address "sticking" with a
system and the feelings that surface. But none seem to address system
itself, which I understand. I have read books that tell you the system
itself is not important and the feelings are more important.
Have
I gone berserk here? If I don't have something that works, then the plan is
doomed from the start. I think I need to experience my feelings in relation
to system development rather than to trading.
I
got no problems with trends. I am a big fan of following them up and down.
Sure, no one knows where they go so we just follow them. The only problem is
that it doesn't work in my testing. So what's the deal? What am I missing
here?
|
Your
drama seems to involve not being able to find something that works.
You
may have feelings about your drama that you do not like.
Fred,
in order to get CM to experience these feelings, may be purposefully
entraining your drama.
To
the extent you can connect Fred and CM, and experience these feelings, you
may be able to transform your feelings from enemies to allies, and
proceed with less drama.
Releasing
is not about making up for the drama, it is about disappearing it.

When
you Fully Experience
the
feelings about your drama
The
feelings tend to transform
and
the drama tends to disappear.
Clip:
http://www.eisenman.com/images/
portfolio/corp_id/gone.gif |
|
Fri,
19 Dec 2003
Hello from Singapore - part 2
See:
Part 1
Dear Ed,
Thank you for your comments. In reviewing my trading history, there were
several episodes of near "blowouts." As a young trader on the CBOT
floor, I can still recall making highly emotional and rash trades. The basis
behind these trades were:
1/ A strong opinion on market direction.
2/ No sense of money management...no mental or actual stop loss points.
3/ A feeling of "going for broke."
In a nutshell, I wanted to be vindicated as opposed to making money.
Having re-started my floor trading career in Singapore, I have turned over a
new leaf so to speak. I am extremely disciplined about taking losses ... in
fact I am one of the most disciplined traders on the floor. It is the flip
side of letting profits run that seems to be the problem. I am too
impatient to let the winners mature properly.
I read the original Market Wizards when it was first published in 1989 and
it was the Rich Dennis chapter that inspired me as a 21 year old to move to
Chicago. Having been in the business for over 10 years, I consider my
winnings to be paltry, almost embarrassing (based on the opportunities I
have had.) With the aid of hindsight, a lack of consistency, resolve and
discipline can be attributed to my meager track record.
To sum up: I want to improve myself as a trader and understand that the
"you" aspect, the organic part of trading is so terribly
important.
It
may also mean facing up to some unpleasant truths about myself. As my
Buddhist teacher would say, "no one likes to be told of their short
comings."
Regards,
P.S. Why did you make the suggestion in the first place?
|
TTP
does not tell people about their short comings (or long comings, either).
TTP
intends to encourage people to connect Fred with CM, experience
feelings, and replace drama with right livelihood.
FAQ
does not make up reasons for things or answer "why"
questions. See Ground Rules.
You
might consider taking your feelings of impatience into the process.

Trend
of Impatience
Time
people are willing to wait and
Distance
people are willing to travel,
1650
to 2000.
Clip:
http://www.ietf.org/proceedings/
98aug/slides/roberson-opening-
slides-98aug/img003.gif |
|
Thu,
18 Dec 2003
DIM
Process
Re: Dream Terror 2 Tue, 9
Dec 2003
Ed says:
DIM
means Do It Myself; the results you are getting are consistent with the DIM
process.
Yup, they sure are. Community effort always outperforms what the individual
alone can accomplish. As Dickson G. Watts says, “The self made man is
proud of a very poor job”. One person does not constitute a tribe. My
posts are not intended to take away from what FAQ intends, TTP, and the
importance of the tribe. My apologies if they do.
I do intend and will continue to be aware of what I feel at all times. It
has made a profound difference in my life over the last few months. My
practice of staying in the now, paying attention to what I’m feeling
inside, and being aware of my thoughts and emotions as they arise without
judgment has given me a sense of peace. I feel at ease and things that
before were bothersome to me, now seem less formidable and not really that
important. I intend to accept what is … right now. My life is much better
now that I practice not struggling with what is.
My friends notice and comment on the change they perceive in me and my
relationships with these people have improved greatly. Money is not so
important anymore. Nor is “success” in the sense most people perceive it
to be. Something infinitely more important and real lays waiting behind the
veil of thought and illusion my mind projects when I choose to be fully here
and now.
But that is just the way I see it. For me, to live is to love and life is
good.
PS: Re: Teachers Fri, 12 Dec 2003 … I think the
contributor quotes Eckhart Tolle. |
The
DIM (Do It Myself) process seems to guide many people.
TTP
(Trading Tribe Process) works in an intentional community or Tribe.
One
difference: when you are on the hot seat, your tribe members can encourage
you and keep you on task, experiencing feelings you might not be able to
transact on your own.

Intentional
Community
Sometimes
your support team
can
help you go the extra mile.
Clip:
http://www.restonrunners.org/
jfk50/Photos/2001Photos/Mark%20
and%20His%20Support%20Team.jpg
|
|
Thu,
18 Dec 2003
The Future
Hi Ed,
Ed Says:
Everybody
gets what they want out of the market.
(I assume out of life as well)
TTP is an inner evolution process. It promotes the
flow of feelings, the contact of CM with Fred.
But it's all in your head.
intention = results
I want to be a great trader and be able to make a living out of that.
Could You give your opinion on this:
Is it a true statement, that everyone who will be "in tune"
in the CM-Fred relation, gets to the "zero point", and wants to be
a good trader, will eventually become a good trader?
My doubts here:
- zero point - it's a state of mind
- to be able to trade successfully you have to have a lot of knowledge;
conduct a lot of research, back testing etc.
- you have to present a certain level of intelligence and deduction skills
Different people have different predispositions; some learn faster, some
slower, one will trade better than the other. But what if both of them have
the same intention? They want to make a living by trading the markets and
have the same living standard. Will they get to the same place? Are
all individuals able to possess the needed knowledge?
When I think of trading for living, I have the feeling that I don't know
enough to trade successfully. When I think of the future I feel an
overwhelming uncertainty, fear etc.
I will graduate from a University soon, so I have to make some
choices, and the time is not in my favor ... I would like to trade
successfully, but I feel I won't be able to make a living of that, so I need
to look for a job first. But I know I want to trade, so why bother doing
something I don't want to do (job) and be unhappy? And the jobs aren't that
easy to find as well. I know I won't change myself instantly, but I want to
work on myself. I feel a bit lost, and I have an emotional roller coaster
and a day-to-day basis when I think about the future. One day I feel
depressed, the other optimistic. I am losing my integrity. Is my attitude
wrong? Where should I start? I don't have a lot of time for mistakes and
experiments.
I don't know if this all I am writing here, makes sense to you. If you
understand me - what and how do you feel about this? I would really
appreciate your comment.
Thanx and all the best
Merry Christmas |
You
seem to have emotional connections to the (non-existing) future.
You
might notice you tend to use the future tense in your send, even ask
questions about the (non-existing) future.
You
might try re-rewriting your send in SVO-p. (Subject, Verb, Object - present
tense).

Even
Our Visions of the "Future"
Occur
Now
Clip:
http://www.historyof
theuniverse.com/images/future.gif
|
|
Thu,
18 Dec 2003
Stock Market
Hi. Ed, I recently read the interview you gave in Market Wizards. You
mention that the stock market is not only different than every other market,
it is also different from itself.
Do
you mean that trend following systems do not work as well (or at all) for
the stock market? |
One
thing that seems to stay the same: prices keep changing and markets keep
changing, ever continuing to be different, now.
Axiomatically,
if you make money on a trade, the trade has a trend. Riding a trend is
sufficient and necessary for profit.

Trend
Accompanies Profit
Clip:
http://www.ci.hialeah.fl.us/
library/images/profit.jpg |
|
Thu,
18 Dec 2003
More
Dreams
See:
P | !P = TRUE
Hi Ed,
Hope I am not boring you, but as I am typing this stuff anyway, may as well
send it to you / FAQ, may or may not help but can't hurt.
OK.
So I write to you earlier describing what happened in the early morning.
Then, in the night, I read more of the FAQ and I reach 31 May with that TTP
transcript with H and R, who appear to be English blokes : "And I've
had some VERY funny recurring "flashback" type experiences to when
I was a kid / adolescent over the last few days ... but they seem totally
unrelated to anything mentioned here or before ... What are they?"
Seems to be like what I describe below as #5 happening to me last night.
What are they indeed? I do see however that they are incidents that are some
kind of source of my feelings. Interesting. And yes I can totally associate
with his procrastination, in fact at the moment I am up late at night
reading FAQ rather than sleeping or working on my thesis, but "Fred
exorcises CM of past ghosts" is too fascinating to ignore. Ah, now
there is another problem: this stock is too good to ignore.
Tomorrow I read June 2003. Let us wait and watch for what that brings.
Also maybe I can sleep better tonight. Or worse. Maybe there are monsters
under the bed.
Regards, |
You
might consider taking your thoughts and feelings to a Tribe meeting, as an
entry point for TTP.
Trying
to analyze feelings by email is part of the DIM (Do It Myself) process.

TTP
Intends
to
reframe monsters
as
allies and friends.
This
is generally much easier to do
with
a support team.
Clip:
http://sweb.uky.edu/~cmitc0/
Monsters.jpg
|
|
Thu,
18 Dec 2003
Portfolio
Selection for Stocks
Hi Ed,
As you indicate in your risk management report, portfolio selection is
critical to overall performance. My tests also confirm this belief.
I continue to test the importance of price strength prior to entering the
market, as well as, price strength after market entry.
My portfolio selection tests lead to further investigation into various exit
methodologies.
What
I find is that "cutting losses short" seems to be of secondary
importance to "letting your profits/positions run."
I
trade a diversified basket approach to the stock market meaning I buy and
sell a bunch of stocks simultaneously when I get a signal to enter or exit.
I find it more important to assess the performance of the overall basket
then of the individual stocks in the basket when making decisions. Therefore
treating the basket as I would a stock. You also refer to this in the
diversification section when you say "The strategy relies on the
average security having a profitable expected value." Obviously, the
better my portfolio selection is, the higher my total profitability.
Can you provide guidance as to how I can improve my portfolio selection
techniques?
Happy holidays to you and your family and thank you for helping to make this
year one of my best ever! |
FAQ
does not offer instrument specific trading advice, See Ground Rules.
You
might answer your own question about portfolio selection by simulating
various strategies over historical data.
Note:
managers who select on strength and buy upside breakouts may currently be
sitting with profits on some nicely trending stocks.
At
the time of the breakout, some fundamental analysts may not yet be aware of
the reasons for a move, and see relatively high prices, so they do not
recommend breakout stocks.
They
might not do so until they fully understand the fundamental reasons and
arrive at their AHA. At that point, the discount may already be in
place.

Selection
Strategies
are
an important part
of
portfolio management.
Clip:
http://www1.math.uni-augsburg.de/
Mondrian/Selection.gif |
|
Thu,
18 Dec 2003
TTP
for Non-Traders
This
weeks FAQ's were great. Sometimes i read your answers first, sometimes the
submitter's. questions, Holding the concept of intention = result in mind,
both work.
I
am still very interested in experiencing the TT process but wondering how
that can happen as I am not a trader.
Maybe
there are other non-traders who read FAQ and want to learn the process ...
Are you considering expanding your work in this way? Sometimes I feel
frustrated with the work. It feels like I'm in a game with a sketchy
abstract of the rules. If I could see it, I might understand the actual
group process more clearly.
|
You
can begin by receiving, just in the process of life itself.
You
may wind up attracting a tribe in your own image.
You
do not have to refer to the Trading Tribe or to TTP or to this site.
Ed's
intention for TTP is for people to experience it, and for it to disappear
and become just another passing AHA.

Aha
!
Clip:
http://www.the-scientist.com/
images/yr2002/mar18/aha.gif |
|
Wed,
17 Dec 2003
Trading
Approaches
Hello Ed,
A brief question about your preferences regarding basic trend following
approaches.
Which do you prefer and primarily currently use: a) Breakout with x number
of days for entry and exit b) SMA or EMA with different MA for entry and
exit c) SMA or EMA with the same MA for entry and exit?
I'm
trying to fine tune a trading system and determine if breakout or MA is
superior and if EMA is better than SMA. If you have a clear favorite what
are the main reasons.
I very much enjoy your Q&A wisdom and humor. Thanks for providing such
valuable insight to laymen like myself.
Best regards, |
FAQ
does not recommend specific trading system parameters ... or make up
reasons for things. See Ground Rules.
Making
up reasons is part of the Fundamentalist process.

Reasons
1.
Their Voluptuous Voices
2.
They have International Appeal
3.
They are Fun to Snuggle With
My
favorite, at the moment, is #3.
Clip:
http://www.horsedesigns.com/
goatsandllamas/reasons.gif |
|
Wed,
17 Dec 2003
P
| !P = TRUE
See
also: Non-random?
I think about my non-random question, and realize that I did not introduce
myself! So I write this mail. (I am a student of computer science at [XXX]
working in verification -- mathematically showing that computing and
computer systems are correct.)
I have the tendency to ask too many questions, esp. "why?"
questions. This carries from my science background perhaps.
I am looking forward to the Austin area tribe starting off. Meanwhile I
am reading the entire FAQ again and thought I'd write to FAQ about a couple
of things.
A few years back, I indulge in some ad hoc "stock market
investing" based on fundamentals, without risk management.
I
find this period as not only unprofitable but also stressful. Eventually, I
lose a lot of money and I stop trading and decide to learn. After quite some
research, a light bulb goes on in my head (AHA?): "Systematic Money
management is key". I also find the phrase "Percent volatility
based position sizing" in Van Tharp's book and the same basic idea in
the Turtle System. (both websites.)
On
the risk page, you say at the bottom:
For
very close stops, and for a high risk allowance, the number of shares
indicating under Risk-Basis sizing may even exceed the purchasing power of
the account.
After
my losing streak, when I have the money management is key aha, this is my
exact conclusion -- if working with stocks, and a medium to high risk, then
the margin rules in stocks are set up with such low leverage that I cannot
do effective pyramiding -- if I put on just 4 positions in one stock, then
the entire capital is invested, though on risk basis I am only partially
invested! This is when I decided to really stop and learn before continuing.
At about this same time I realize that "The psychology of trading is as
important as, if not more than, the mathematics of it." Having a system
is not the same as being able to stick with it. I must say I recognize some
personal problems like 1. lack of disciplined systematic approach, 2. no
patience to wait for results, need for instant gratification, 3. need for
constant activity as a proxy for progress, 4. over-analysis when any
decision is to be made, 5. laziness.
I seem to have above problems arising from feelings of 1. not being good
enough, wanting to be better (perfectionism?), 2. non-entitlement to
success, 3. pessimism, lack of confidence in being able to get to the top
even when I put in effort -- in fact this makes me abandon putting in
efforts, procrastinate, sabotage etc., -- even though I know that with even
a little bit of effort, I often do very well, 4. excessive skepticism,
unwillingness to go with the flow unless I find a reason explaining the
flow. (Next time I fly, maybe I should ask the pilot if he thinks Bernoulli
is the reason for the plane lifting off! :-) )
Until I resolve some or all of these issues, I am a non-trading trader!
It is better to be out of market two years than to pay excessive tuition to
the market for teaching me through my own drama about myself!
Also, here is an interesting event -- I wake up very early today morning
with a strange confused feeling. I never ever remember dreams and it feels
very odd when I wake up in the early hours of the morning. Then I realize
that it is not a dream but actually the memory of a series of incidents from
my past, about 8-9 years back. Almost suddenly I feel that I am aware of the
source of some of the feelings above.
The
first few minutes I am in a trance like state, but as soon as I try to feel
these fully and pursue further, the conscious mind takes over, I feel very
tired and I go back to sleep. I don't know if this is a mini-aha, but it
seems like I have partially learned something that my subconscious is trying
to tell my CM.
For now I stop here. I am happy to get any comment from you or any FAQ
reader about any of this. I am happy to not get any comment also.
Logically p or not p always evaluates as true, so I can just say that
I am happy just to write the email, and the outcome does not matter.
Regards,
|
You
seem quite developed in the area of logic and analysis.
Something
likely drives you toward intellectual excellence.
You
might consider figuring out the feeling of wanting to figure it out.

P
OR NOT-P
is
TRUE, you see
then,
TT AND P
is
LET IT BE
Clip:
http://www.tamano.or.jp/usr/
osaka/pages/image/let.jpg
|
|
Wed,
17 Dec 2003
UNCLE
Point and Lake Ratio
Hello Ed, hello traders
I like the UNCLE point and Lake-ratio. (See Risk Management link, above)
After trading futures for my own account or a few others I now help an asset
management company.
They are going to trade "managed futures accounts". I helped in
setting up the technical infrastructure, such as software, hardware,
brokerage etc.
The partner which I work with is looking for a good (what is good) system(s)
in the following way.
He takes intraday data of the last 2 months or so and optimizes a
system so that he sees very small lakes (Lake ratio).
Then he begins trading and of course gets a drawdown. He cannot even make a
"Lake". I mean trying to go through a drawdown period.
He first gets to his Uncle point. Then he tries to find a better system ...
and so on.
First he wanted a system that had a high profitability. I told him
profitability (%winners) was not enough. Finally he believes that lower
probability and high average winners are ok too.
I traded for him (not yet for his clients) and won 20% in the first 6 weeks.
Than the next six weeks I lost this 20%. First he was very (too) excited,
now he is too fearful. But he likes the round turns.
For me it is nice to have colleagues (because I'm quite extrovert, and
trading is a lonely job), I cannot prove to him that he won't find the
system he wants.
What is your advice to ME? In Holland it is impossible to find a place
with colleagues to work with if you are not grown up in the banking
arena?
Best Regards,
|
You
seem to be working the DIM (Do It Myself)
process, rather than TTP.
Your
drama seems to include emotional engagement with a short-term trading
system.
Your
boss appears to be the action addict and you appear to be the enabler,
although sometimes you may trade roles.
You
and your boss seem relatively content with your current situation, so you
might like to think it through before you attempt to change anything.
If
you wish to remove some drama, you might consider assembling a Tribe and
implementing TTP.

Problems
People
tend to have
the
problems they want.
Taking
someone's problem away
without
an invitation to do so
is
generally impolite.
Even
with invitation,
it
can still be risky
since
people sometimes ask for advice
as
a way to enroll you in their drama.
Clip:
http://www.swepcousa.com/
bpsite/solution.htm |
|
Wed,
17 Dec 2003
Are
Prices Non-Random?
In your risk management article, you say:
"In non-random processes, such as secular
trends in stock prices, pyramiding and other trend-trading techniques
may be effective."
Are prices truly non-random?
Thanks,
|
Prices
are things, so are neither random nor non-random.
Price
behavior is random in ways, and non-random in other ways, depending
on your definitions.
For
example, price tends to be about the same value as the immediately preceding
price, so a price chart appears as an improbably contiguous wiggly line
across the page, rather than as a randomly scattered mist of points.
If,
however, you consider the price change, or deviation (dp/dt) from the
preceding point, you can find methods that show random behavior,
particularly in the short term, most of the time.
Secular
means occurring once in an age. You can certainly find
non-random periods, at least once in an age. Such periods sometime
attend major break-outs.
You
might check the recent trend in Eurodollar / US Dollar, to see if it looks
random to you.

March
Eurodollar / US Dollar
November
7 - December 17
The
existence of occasional non-random price behavior follows from Sir Francis
Bacon's observation that in nature things move violently to their place
(big trend) and calmly in place (random dithering).
Dither:
to act nervously or irresolutely, from the
Middle English didder, didderen, to
tremble. Trembling in place tends to meet many tests for randomness. Some
return-to-the-mean statisticians tremble in place at the thought of buying
strength and selling weakness.

Sir
Francis Bacon
(1561–1626)
For
honor is, or should be, the place of virtue; and as in nature things move
violently to their place and calmly in their place, so virtue in ambition is
violent, in authority settled and calm. from: Essays,
Civil and Moral.
Clip:
www.dergi.org/202002/1502.htm |
|
Wed,
17 Dec 2003
Wanting a Better Stock Picking Method
Ed,
I recently enrolled in a course that teaches a trend following system and
started trading for the first time this week.
Since
I am familiar with the stock market more than any other market, I started
trading stocks. My risk management seems to be fine. I have no problem
exiting a trade that is going against me, even the day I enter it.
However
I am having trouble picking winning stocks.
I
only traded stocks that hit 55 day breakouts but they all reversed either
the day of the trade or within a few days.
It
seems that this alone is not enough of an indicator.
Can
you give me specific advice for picking winning stocks?
Thank
you. |
FAQ
does not recommend specific trading system parameters, See Ground Rules.
Since
so much of trading is about your ability to follow your system, a good
system generally resonates with your gut approach, and evolves through years
of trading.
The
chances of finding a system, off the shelf, that works for you are slim to
none.
Before
you do much trading, you might like to study your system's historical
performance to help you set your expectations, about how you might feel
following it.
You
might also take your feelings of discouragement to a Tribe meeting, to see
if you are just using trading as a way to justify them. You might even
have an AHA about the positive intention of discouragement.

Discouragement
may
associate with
unrealistic
expectations.
You
may have little interest in setting realistic expectations if your real goal
is to justify discouragement.
Some
people may attend courses on how to trade, in order to find new and exciting
ways to run their disappointment dramas.
Clip:
http://www.youthchg.com/2nws2.html |
|
Wed,
17 Dec 2003
Poem?
There is a trader named Seykota,
who doesn't have to drive a Toyota.
He has a friend in the trend
and from that he won't bend
For market news he doesn't care one iota.
The same man's first name is Ed.
He conceived a concept called FRED,
which comes from the brain stem,
which interacts with the CM,
showing all drama makes it's bed in your head.
As the TTP founder,
he won't let us flounder.
With a Hot Seat to see our drama,
without having to meet the Dali Lama,
and without therapy from some shrink bounder.
(c) DumbPoetry Productions
May reproduce in any media whether or not for commercial gain.
|
Hmmm
... you seem to have the essence of FAQ ... including giving no advice about
whether to be a short or a long fellow.

Henry
Wadsworth Longfellow
(1807-1882)
Longfellow
writes poetry as a bird sings, with natural grace and melody, that clings to
your soul and confers a sense of joy and a spirit of optimism and faith in
the goodness of life.
Example
from
The
Village Blacksmith
Thanks,
thanks to thee, my worthy friend,
For
the lesson thou hast taught!
Thus
at the flaming forge of life
Our
fortunes must be wrought;
Thus
on its sounding anvil shaped
Each
burning deed and thought.
Clip:
http://www.epdlp.com/
fotos/longfellow.jpg |
|
Wed,
17 Dec 2003
Ugly Update
Ed,
Thanks for your insights and I have an update for you.
You are right Ed, even my own feeling about my appearance of my face was
part of the drama.
The
bigger drama though is my whole life I give off a vibe of being mad at woman
and am afraid to get involved in relationships. I have never really known
why. I did know that deep down it was a problem with me though, not the
world.
This morning a couple minutes before my alarm was set to go off, I was
semiconscious and Fred (I was kind of in a dream state or something), told
me that the positive intention of avoiding woman and relationships was to
protect me from getting hurt like I was in childhood. This just popped
in my head and I had instant understanding. You see a lot of schoolgirls had
made hurtful comments and teased me about my appearance all through
childhood.
My appearance has changed drastically since childhood, and I know that I am
not THAT ugly anymore. At my 10 year reunion no one even recognized me I
have changed so much, and a lot of woman even thought I looked really good.
But for some reason I am just not able to get into relationships.
This morning after Fred told me the positive intention of avoiding woman and
relationships, I feel a huge weight lifted off my shoulders. It has to be
an Aha, since I feel a total understanding about the issue now and I no
longer seem angry at woman in the present moment. I feel closure. I feel the
drama is gone and I feel excited to get the day started and to go talk to
woman.
A year back I even played out a funny drama where I thought I was gay, even
though I knew I always liked woman. But either Fred or my conscious mind had
to try to justify the reason that I avoided getting into relationships with
women.
This stupid DIM process took me 10-15 years (or more) before Fred told me
the positive intention of what was going on. Your insights a few weeks back
really helped me work through the process. Even though everything in my last
post was a drama, for some reason everything worked out.
I started following FAQ to listen to your insights about trading on a
psychological level. I am a good trader though and have no problem with
successful trades. In fact I usually skip those posts involving trading.
Instead FAQ is helping me dissolve the dramas in my personal life.
Thanks again, |
Yes.

Beauty
is in the Eye
of
the Beholder
For
example, some may find
how
the light plays on the water
rather
attractive
while
others may not see it at all
that
way.
Clip:
http://www.cpcug.org/user/
jlacombe/tahiti1.html
|
|
Tue,
16 Dec 2003
Denver
Tribe
I
want to talk with other traders in my area that are willing to go through
TTP.
I
consulted your directory and do not see Denver listed. I am a novice - I
found FAQ only a few weeks ago and have never tried anything like TTP
before. I do not know how to organize a local Tribe, but I'm willing to try.
|

Welcome
Denver,
Colorado
See
the Tribe Directory Page
| |