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.

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/

Sat, 20 Dec 2003

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.

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.

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.

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

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/

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

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,

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,

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?

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/

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.

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.

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."

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/

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.

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/

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,

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-

Thu, 18 Dec 2003

DIM Process
Re: Dream Terror 2 Tue, 9 Dec 2003


Ed says:

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:

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.

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/

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.

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."

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/

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.

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/

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?

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/

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.

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.

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/

Wed, 17 Dec 2003

Are Prices Non-Random?

In your risk management article, you say:

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.

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?

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.

Wed, 17 Dec 2003

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/

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.

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