limited%20edtion%20prints.html

www.oir.ucf.edu/wm/paint/ auth/cezanne/sl/

~hill/4x4/jacks720r.jpg

Fred Trying to Communicate with CM

Dr. Ed -

Just wanted to give you and your viewers an example of Fred trying to communicate with CM.

Recently I emailed you about my feelings of regret for missing out on two successful Internet IPOs at companies I worked for AND going to business school and missing the Internet bubble.

My criteria for picking stocks is very strict and the recent equity rally has given me feelings of uneasiness of missing out as no stocks met my criteria. This uneasiness is nothing new as I have felt it a few times during the bear market rallies over the last 3 years.

Just the other night I had a dream that I was standing on the beach watching the waves break and EVERYBODY was surfing the waves which to me appeared short and choppy.

At first I thought this dream had to do with the fact that I moved from NYC to Miami Beach in January of 2003. Then it became obvious what was happening.

Keep up the great work.

~sponge/sesh/sesh55.htm

Dynamic Risk Management

Hi

I'm going to feel  "feeling" feelings as they appear, and see what happens.

I've never spoken to someone who doesn't answer questions as well as you do! :-)

But ... when thinking about the answers received, the perspective of the original question changes ...

I would make a comment about how your risk article is great for getting the "Big Picture", but doesn't help me much with a "dynamic" system where the expectancy (win loss probability and win loss amounts) keeps changing ... like when I'm starting out and haven't got many trades ... but I know what you'd say "You might check your feelings about finding out for yourself" ... so I wont say anything.

Risk Management


To: Mr. Ed Seykota

"I am calculate for the worstest case ..."

Napoleon

Gentlemen

Majority of sucessfull traders in industry can have win ratio from 0.3 until 0.5 (if exist important exception, please inform me )

Calculation of chanse to catch losing streak
with 10 consecutive loss case of 0.3 win ratio case of 0.5 win ratio 1/(1-0.3)^10 = 1/35.4 1/(1-0.5)^10 = 1/1024

But it is only in case, if each trade is independent event.

Question - How long can be losing streak by high professional trader, if he make 10000 round trip ? What say realy statistic, not simulation ?

I suspect that losing streak with 16-32 consecutive loss is reality, but i knew not precise information from industry. In case of bet 3% (with transaction cost) of total capital on each trade, trader need catch 22 consecutive loss to lose 50% of total capital.

Autor interessed for identification of long losing streak from start and money management algortm .

I would be happy if you would look at my posts and told me your opinion. Feel free to pass this info to anyone who you consider ready for something like this. Best regards,

I want to contribute towards removing the idea that KSE or Karachi Stock Exchange is not a Casino and we trader not gamblers. Here its difficult to start with anything relating to learning the craft of trading. thanks to internet we can now learn from the best.

That simple, yet challenging exercise given me awareness of the emotions I most want in my
life but I have resisted until now. Freedom!

Also, thank you for your Stock & Commodies' Determining Optimal Risk Article link. I love the ability to downloading the article yesterday immediately. Now, I am off to study your new Risk Management page. I appreciate all your efforts with TT & FAQ.

Best to you, Sincerely,

wallpapers/honeycomb.htm

Dear Ed,

The FAQ reminds of my most enjoyable university classes. The professor opened up the floor and the class talked. Thanks for taking the initiative to establish this forum.

I am aware of an "aha" experience that occurred last night. It was not even directly related to a trading position but I know that it impacts my trading style.

There was a disagreement with a coworker and I started with my typical processing of the event. This involves a continuing replaying of the event in the my head, playing out different scenarios and conclusions. As the processing continues, I evaluate (I intentionally visualize myself in 3rd person as Fred and CM replay the event) my emotions and recognize my anger is not directed at my coworker. In fact, the anger has nothing to do with my coworker. My real anger is directed at myself. I am angry at myself for not communicating what I need to communicate (low confrontation personality). I stepped back in my personal timeline even further and realize that my lack of communication and voicing opposing ideas is a life long trend.

I resolved this particular drama by sitting with my coworker and I communicated.

I basked in my feelings as I explained my perspective. What a wonderful experience. Thanks.

Incline Village Trading Tribe


Dear Ed,


Thank you for providing such a creative site for others to share with and learn from each other.

As for myself, I'm within driving distance of your Incline Village Trading Tribe. If possible, I would very much like to attend a meeting, perhaps this next Thursday?


Sincerely,

Fighting the Feeling of Trending

"When you first start using a trend following system, you might find yourself fighting it where your objectives differ.

As you resolve your issues, your system and your feelings pick the same trades."

Ed:

I acknowledge this pattern while riding a trend. While riding a trend I usually have to make an effort to sit tight and keep mind and spirit clear, for it feels like a lot of demons try to pull me out of it. Sometimes I also feel a lot of pressure in the stomach.

Do you think this is the germ of causality inside me, or a lack of entitlement, or both?

vision/surprise.jpg

Risk

Dear Ed,

After reading your response on May 10, 2003 entitled Re-Buy I think that you may have helped me with something again.

I have taken big risks in the last 10 years. I have made very good percentages but with high volatility.

I experimented with something lately. I took $10,000 from my $110,000 account about 15 months ago and opened another stock account.

With the $10,000 account I bought stocks that began up trends off of bases without researching the stocks much. I bought 4 to 5 issues at a time and did not concentrate in any one position.

In my $100,000 account I kept my old method that has given me very good returns in the past and I repeated the past method. I researched sales earnings and waited for breakouts and concentrated big percentages of my money in the best all around issues.

The smaller account is now almost at $40,000 a 300% increase. The bigger account is at $133,000 a 33% increase and has been a wild rollercoaster. I was down $43,000 or 43% in the bigger account at one point this year. I couldn't even talk to anyone until I got back to even! I felt like a beginner again. I did not cut my loss on one issue that I had taken a large position in. I have not done something so stupid in years. I guess stocks don't just go up anymore like they did late 90's.

I was and am surprised at how much percentage increases can be made by increasing my diversification. For some reason I am able to cut losses better and relax more.

I still cannot believe the smaller portfolio percentage gain somehow! I think my emotions just get to wild when I buy too much of one issue. I was O.K. in the past with $2000 - $35,000 but with more money it is just hard to deal with the portfolio rising and falling a large percentage everyday. It is like I can make or loose a new car everyday and I drive a used car with over 100,000 miles on it now!

I am currently diversifying my portfolio.

Here is what I currently own. [omitted] Most of the stocks have been bought within 4 weeks. Anything in my purchases look too screwy to you? If you cannot answer because of FAQ rules, I understand. Thanks for the past help. I hope this e-mails correctly and fast.

Well, I hope I did not overstep one of the rules in FAQ somehow. Your help is very valuable to me. Thanks.


Thank You

Removing the doubts would make everything fall into place ... I mean, I'm smarter than average, if <someone> can do it I can learn too, and although writing this I feel like a complete [xxx] whose knitting is coming undone I know I'm less "dramatic" than most people... but I cant seem to "believe" this belief for some reason ... even though CM (or is it Fred? I cant tell who is who...) tells me I've got everything I need, and can do everything required, for it to be true... I KNOW that if that belief was there then the "intention" would be there ... and the results would follow ... cool! How? Accept and enjoy the doubts?

Finally (phew!) you wrote ... Strict discipline induces insurrection. I'm struggling with indiscipline (or is it doubt?) ... I've just noticed that my desire to feel "free" induces the drama of indiscipline ... I was under the impression that discipline was top of the *required* list ... and I figured it was either strict or it wasn't really discipline ... like being a virgin ... one is or one isn't ... no "fuzzy" area ... What exactly do you mean? Break the rules occasionally? Be flexible?

Thanks again ...

Books

Please assist me in obtaining a thorough mastery in trading concepts. Could
you recommend a few books? Thank you.

Thanks for a great site. I enjoy reading all the posts. With reference to a post on the site on Feb 6th 2003 (Poker), the contributor mentioned a publication of yours entitled Determining Optimal Risk. Please let me know where I can locate it.

Sincerely,

This has stopped therapist from finding something resembling a memory, and metaphor is another way to change. Still, the binds keep rolling along until they are dealt with as communication devices they are.

see: Probability

Ha ha ... thanks for the insight.

Regards,

In other words, I wasn't acting against myself and my goals at all. I was acting fully in support of myself, based on the beliefs that I accepted.

A quick and dirty example to illustrate the point: If you believe that you can't win at trading, and the result of "not winning" is financial losses, then are you not acting with positive intentions by periodically walking away from trading? Of course. If you can't win, then it's in your best interest to stay away! YOU GET WHAT YOU WANT FROM THE MARKET. If you can't win, you won't win. So protect yourself by staying away.

Indeed, trading is so much more than trading. It's a metaphor for life. And in clearing that issue within myself, I found myself at a level of peace I haven't felt in I don't know how long. In realizing that I am acting in my best interest, that all my feelings and "parts of self" have positive intentions, I realized that I AM ON MY OWN SIDE. I feel "congruent" now. As though all my internal parts are aligned toward a common goal. Conflicts have been resolved. How wonderful it is to "welcome yourself home", to stop fighting yourself, to stop criticizing yourself for "screwing yourself up"!

"They" say that when you're committed, everything you need shows up. I feel it's no coincidence that within 48 hours of having become fully committed to my trading, the major issue that I've been contending with for almost two decades was cleared up.

But the benefits don't stop there. I finally got what trend-following is really about, and man oh man, is it ever SIMPLE: You have a system. You follow the rules. That's it.

The ONLY thing "hard" about trading is ALL THE OTHER JUNK WE BRING TO IT. The fears, the concerns, the expectations of how trading "should" be, the putting our past experiences into our future. NONE of it has anything to do with trading, but we think it does. We try to predict and forecast because we need to be right, we need to know, we need to feel secure about our trades. But none of that has anything to do with trading. There is only the system, the rules and the following of the rules. It's a numbers game. Once you have a system that works the only issue is implementing that system to give the numbers an opportunity to work out in your favor.

I found myself trying to choose between two trades the other night. Both had already triggered entry signals the day before (I was still in the process of self-examination and was not trading at the time.) I found myself looking at volume, looking at price action, trying to "figure out" which stock would perform better. Until I realized that I was attempting the impossible. One might work, both might work, neither might work. Who cares? Either one is as good a bet as the other. The signal has been tripped and the only issue now is money management. Positioning myself for exponential gains or linear losses. Trying to figure out which stock to choose has nothing to do with it. I might as well spend all day at the cab station trying to figure out which cab is going to get me to my destination without getting hit by a bus. I CAN'T FIGURE THAT OUT. EVER. WHY WASTE MY TIME AND EFFORT TRYING?

I realize now that the ONLY thing I need to "work" on is myself. Remaining vigilant not to fall into the old traps of prediction, fears, etc. Honor feelings, deal with whatever arises, but when it comes to trading, all there is to do is to follow the rules. Whatever happens happens and none of it matters so long as I'm following the rules. Losses are part of the gig, discomfort is part of the gig, getting stopped out just before the gap and limit up opening is part of the gig. Don't like it? Don't play.

And this has translated into my entire life, not just trading. Going with the flow. There is only NOW. Anything might and could happen after NOW, but NOW is all I can respond to. What is ACTUALLY OCCURING is the only "data" worth considering. (Assuming that you have a plan that accounts for various contingencies, of course.)

It's been rather fun watching myself watch the intra-day quotes. Up and down, excited one minute, scared the next, optimistic then pessimistic. Why bother? Either my stop has been hit or it hasn't. Nothing else is relevant. Why waste my energy? Time to turn off the quotes, put in the orders and go play outside...

Best to you...

see: Trader Models

Thanks for your reply yesterday ... Im still thinking about it ... So even "probability" and statistics is still trying to figure out the market? Just "go with the flow" of whats actually happening? Makes perfect sense ... until the invisible comentator asks "yeah, but what if..." :-) But he'll change his tune soon!

I just checked out your answer again, to see if I could glean more from it, and I noticed the bit you wrote about "change" has gone. This was the part I *most* didnt understand, but *most* felt as if there was something important there ... but your answer's changed ... ???

I just had an experience that included a "drama" Id like to share, and which made me try and use the process. It wasnt a trading experience, but Im [xxxx] sure it or something like it will/has affect/ed my results. (Aside: If my results are negative, does that mean my intention is to lose money? Im truly awed by the "life" implications of that quotation. Its scary...) I live in Brazil, and the nearest club looks like 5000 miles away ... so how do I do the process with myself... is it possible?

The drama... I was paying in a restaurant and ended up in an argument over prices. I complained, didnt receive satisfaction, and kept complaining, and the queue behind me kept getting bigger..... The worse I felt (rage, embarassment, frustration - all feelings I feel during trading), the more I complained... to no avail... until I just gave up, paid, left the restaurant and walked home - fuming away inside, and totally aware what Id just done was pointless, and that it would have been less unpleasant just to pay the difference and walk away, but also aware that doing this would have meant walking away feeling something ELSE not entirely pleasant ...

Anyway, on Monday, as I read your site, Id been confused the the idea of what the term "drama" actually meant, but as I sat down in front of the monitor I suddenly thought "Hey, Im feeling bad ... and if that wasnt a drama I dont know what could be! Concentrate on the feeling! ... What am I feeling? ... Where? What does it mean?" But it was like trying to see where an atom is by shining a light on it ... My Process was somethihng like: "OK, Im feeling like ****, Im angry, my gut feels like hot, Im not breathing properly, Im clenching my teeth, saying "grrr!" to myself.... but so what?" I guess Im missing something ... what?

Also ... you mention "knots" of tied up feelings Im unable to feel ... but I KNOW when Im angry, frustrated, embarassed, scared, happy, surprised... because I FEEL these emotions at the time ... and its precicely cos Im feeling them that I do all the non-useful "dramas" ... if I DIDNT feel them, I wouldnt need to play out the dramas....

Is the objective of the Process not to feel the feelings, or to feel them and be able to NOT play out the dramas? As you've probably guessed, Im a little lost here ... but Ive ordered the Toxic Parents book ... so maybe when Ive read it I can blame it all on them and everything will be great! :-D Just kidding!

index.html?main=edu/ceuaba2.shtml

exhibits/washakie_2/photgraphs.html

If you look at [xxx] it had a hook down 7 days
ago ... if I wanted to buy more when the stock takes out that high of the hook down, where do I place my stop ... ?? ... do I place it at the low of that hook down or do I place it at the low of the day that it takes out the high of the hook down ... ?? ... when I asked [yyy] about this, he wasn't quite clear ... he kind of said that it depends on what the stock is doing now ... ?? ... does that mean I should look for some support in the past couple of days to place my stop? ... could you clarify?
thanks.

Reframing Feelings

"You might reframe the negative feeling as just a feeling, that Fred wants to communicate to CM, neither positive nor negative."

That's it, Ed! We finally got to the point (AHA). I have just started to reframe those "negative" feelings as just feelings and also started to celebrate them for my joy and great relief. Thanks for your insights!

"I gather that you validate truth, perhaps even your own being, by the agreement of others .. trying to get the market to agree with you, can be expensive."

I feel that's partly true. About needing approval, I was aware of it a long time ago. It's rooted on rigid early upbringing. Nevertheless I think the positive aspect of such need is related to lending an attentive ear to advice from the long lived, as expressed in the maxim:

"If you wish to know the road, inquire of those who have traveled it."

Sometimes, though, I feel it's an impediment to personal growth and independence, and also an excuse not to take responsibility for my own actions and their outcomes.

When I meditate, instead of trying to stop my mind from thinking, I simply acknowledge and become aware of my thoughts and observe them with detachment and let them flow pass.

landofmammoth/photo/zoom_03.html

Hi


hi Ed,

When you say check your feelings about something what do you mean? Be aware of it? Aren't most people aware of what they are doing or thinking sometimes? Doesn't
that not really make a difference? If I am depressed, I am aware I am depressed no? I am still depressed. So what then?

Clip: www.funclown.com/doughboy.htm

Body posture
Hand gestures
Head tilt
Vocal qualities (pace, rhythm, tonality)
Key phrases
Blink rate
Facial _expression
Energy level
Breathing rate
Anything else that you can observe…

Example:
To mirror another person, merely select the behavior or quality you wish to mirror, then do that behavior. If you choose to mirror head tilt, when the person moves their head, wait a few moments, then move yours to the same angle. The effect should be as though the other person is looking in a mirror.

Example:
You: "If I were to ask you, what's the most important thing in a relationship, how would you describe it to me?"
Her: "I want a man who makes me feel comfortable with myself" (you remember "feel" and " comfortable")

Example:
You don't mimic a person word-for-word, but you match the *meaning* that's offered. ie, if someone goes "I love pancakes!", you don't go "I love pancakes!", but you can do something like "Mmmmmmmmmmhh...yeah...." - in the same tonality and volume. Mirroring and pacing work "in concert," so you have to use both.


Thanks

Ed

cool!

Like the water from a cup that has been sitting by the bedroom window all night

Clip: www.adl2.com/ice_cube.html

EyeWitnessed/Eye4moon.JPG

The Basics

Dear Mr Seykota,

After 10 years of trading and studying the markets I had developed a systematic process for trading medium term trends in US equities and wanted to implement it.

I have been lucky enough to have brought together a great team and top class structure around the product that we are launching (see attached document). However, due to a great deal of scepticism in London about trading a system in equities, we are having a hard time closing a deal with a lead sponsor. We are looking for $20-$30 million at launch, due to the economics of the business.

If you know of any institution that would be interested in sponsoring us at launch, we are looking to do a deal and would greatly appreciate an introduction.

On a personal note, thank you for sharing your experience with people like me. Because of the generosity of people like you, I've been able to understand the markets. I'm amazed how unconventional the thinking still is, when it seems so natural to me, but it has been a wonderful journey - one which I'm going to be forever on! Thanks.

Yours sincerely,

see: Question on Probability

Dear Mr. Seykota,

Let me rephrase my question: does probability exist?

Trend Following Methods

I find trend following truly liberating because it doesn't require you to figure out the future. As a trader, I simply "wait" for the trend to shift and meet my criteria of a trend shift and then I "follow". No prediction is required.

I have been trading futures full time for five years. I spent the first 3 1/2 years trying to "figure out" the markets. I tried most technical indicators and none of them worked very well consistently. I managed to breakeven in my trading in the third year and turned a profit in the fourth year because I was trading with elementary trend following principles "despite" my TA prediction bent. Simply I was cutting losses short, risking 100% of my open profits before my exit rules are hit, letting profits ride, and sizing my position prudently to stay in the game.

I had an epiphany one day and that changed my trading from the TA prediction approach to trend following. Over time I managed to gradually lose all my indicators and I now use a moving average to define trend and switch direction.

My trading journey continues and I've tried trading different time frames and markets to find the ones that suit me personally. I continue to evolve and fine tune my trading rules on an ongoing basis (they are getting simpler).

Risk and Drawdown

I define risks in futures trading simply as when the trader doesn't know what he or she is doing. This means the trader has no clearly define trading rules for entry, exits, and position sizing. If the trader knows what he or she is doing, then the risks that remain are the trader's own well being, i.e. his personal life which affects his emotions and therefore trading.

It has taken me a long time to "accept" and be able to handle whipsaws and drawdowns. It's still not easy but I am getting better at continuing to take my trades after whipsaws. I finally understand what Mark Douglas is talking about when he teaches traders to think like a casino "operator." This means so long as the game I am playing (i.e. my trading methodology) have positive expectancy and I size my bets appropriately, I will come out ahead if I take all the trades of my method. This is just like the casino taking every bets of its customers "indiscriminately" and while they may lose on individual bets but over many bets they make money because the games operated by the casinos have positive expectancies.

So I view drawdown as an unavoidable and necessary part of trading. In fact one of my written reminders is "Drawdowns and losses are unavoidable. They are necessary to make net overall profits."

I hope the above have enabled you to get to know my feelings about trading better. I am genuinely interested in finding out whether it is possible for you to manage some of my family's money at mutually beneficial terms. Please advise how we can take explore and take this information exchange further.

It has been a long time since I always find myself involved in power struggles with the girls I have been choosing as potential partners, with great distress to both parties. Such power struggles, on my part, I feel are based upon deep unresolved negative feelings and beliefs about women, which express themselves in the form of deep insecurity and an unwillingness to be emotionally open, always trying to take full control of the situation.

Unfortunately, I have seen and lived this pattern over and over as it would appear that I always end up caught in such dramas, ruining my hopes to achieve the healthy relationship I always dreamed about. So, after reading about The Process, I started thinking to myself: "What is Fred trying to tell you while you are trying to block him?"

Yet, I have not find a precise answer up to now.

valtoy8/GIJoe.html

Who Gets the Best Price

"The stock is up already, is it overextended?"

If we had a crystal ball and we saw a stock that went from $20 to $100, we would see a trend (barring a takeover etc).

If one owns it at $20 and another at $30, who is in a better position?

We could say the owner at $30 is better off because it was even more evident that the trend was there and he owned it for a shorter time period.

Now, say the stock is at $40. Both are in the same position? We can say the owner at $30 has less risk, only 10 points to breakeven while the other has 20 points of risk to breakeven.

Clip: www.laurahazlett.com/envy-big.jpg

I think I am on the right path - there is a lot of un-learning I still have to do - but the hardest thing for me to do right now is to put on my first trade.

index.cfm/detail/1824.htm

Is this O.K.? I now see that the Trading Tribe is now a reg. trademark. So shall I have the name changed? How do you want that handled? Best Regards,

Any thoughts? How can I look at this in a more "useful" manner? I haven't written a system that makes money (and I'm talking about > interest results... not 200% a year), but as others have, I'm obviously not doing/thinking something right ...

On another level, could I ask you a personal question? Why do you trade? Why is <your answer> important to you?

Thanks.

PS - Nice idea to create a "community" where you share the benefits of your wisdom and experience. Thanks.

Fixed Portfolio

Ed!

An true believer of trend-following, I have
experimented with almost all technical analysis tools, and continue to return to the tried and proven Simple Moving Average crossover.

I have a group of about ten highly liquid, high
volume, stocks, that all trend very nicely and respond very well (over the previous two years) to a 5/20, 7/35, 5/25 SMA crossover.

Ed, what are your thoughts on trading this one group of stocks all year long? This would be similar to futures contracts, where traders "specialize" in Crude Oil or S&P 500 contracts.

My feeling is that getting intimately familiar with the trend behavior of only these high-volume, high-liquidity stocks will put money in my pocket both long and short.

Thoughts, ideas?

Take care!

golfonline/history/

Melbourne Tribe

Dear Sir,

Someone put up a thread regarding starting a tribe in Melbourne, Australia.

My question is can I join? And How?

Regards,

See the Tribe Directory Page

Portfolio Heat

Sir,

Can you please advise if you include the unrealized profits of your open trades into the calculation of portfolio heat or only the trades’ initial risk?

Regards,

trail_gator.htm

and Making Friends with Feelings

Hello Tribe,

Just a riff off Ed's observation that, 'Sometimes Fred arranges drama to get CM's attention. When dramas occur during the day and can no longer be ignored, we call them problems. When they occur at night, we call them dreams. A student of Fred, Freud, emphasized that we need to analyze problems and dreams. To Fred, of course, this constitutes fraud.

I experienced an illuminating example of Fred, Freud, and fraud one night last week. The previous day, I had felt uncharacteristically dissatisfied with trading. I was trying to catch short-term trends, following markets obsessively and moving in and out to little effect. My distinct feeling at the end of the trading day was that I had completely wasted a day out of my life which I promptly attempted to assuage (squelch) by getting ahead in some of my other work.

That night, I dreamt that I was with my children at Pier 41 in San Francisco waiting for a ferry to Sausalito. We were watching the seals at the pier, and I noticed one in particular. It was a harp seal that I had seen in an advertisement for a wildlife organization that was soliciting money to help endangered species. The seal was large-eyed, with soft dry fur. It looked directly at me. In the dream, I desperately longed to climb down the rocks and play with the harp seal. I realized, however, that the ferry was shortly departing and, with regrets, I left the seals behind to catch our ride.

My first inclination was to play Freud and analyze the dream. Seals were my favorite animal when I was a child. They seemed happy and carefree. I could watch them play for hours: climbing onto the ice, sliding down into the water, climbing back up, sliding down. My analysis suggested to me that I was perhaps working too hard, struggling to meet obligations, thereby endangering the childlike enjoyment of life.

As soon as I arrived at my Freudian formulation, I recognized it was fraudulent. It would lead me to do what I had always done in such circumstances: I would step away from trading for awhile, enjoy life, return to trading for a period of success, and then flush with victory expand my trading efforts to briefer time frames. The analysis was not a way of dealing with Fred's communication; it was an essential part of keeping the drama going.

With a bit of trepidation and self consciousness, I decided to put my dream through The Process. My guide along the way was an excellent book by Alvin Mahrer called Dreamwork in Psychotherapy and Self-Change. Mahrer's approach makes three assumptions:

The dreaming person may be described as having entered into a new and qualitatively different personality state. In contrast, virtually all other approaches see the dreaming person as essentially the same personality but with reduced defenses.

Deeper personality processes may be grasped by entering into the dream state. This means that you will probably be unable to grasp or be privy to these particular deeper personality processes by standing outside the dream and talking about it or trying to figure out what the dream means.

Deep-seated and profound personality change occurs to the extent that you can be or experience the deeper personality processes contained in the dream. This means that you will probably be unable to undergo this kind of deep-seated and profound personality change by standing outside the dream and trying to do something therapeutic.

The goal of The Process, it seemed to me, was to be the dream, not stand outside it. And since my desire in the dream was to play with the seal, I decided the best way to be the dream was to be a seal.

So that's what I did. I spent the next trading session barking away, clapping my flippers, balancing things on my nose, and otherwise behaving in ways unbefitting a serious psychologist and trader.

The interesting part came when I started following the market action carefully while in my seal mode. I held the image of climbing up the ice floes, sliding down to the water, and climbing up again. Spontaneously, I started to view the charts as my playground. Climb up, slide down, scamper back up: the short-term movements that had been so threatening to me when I was trying to ride small trends now were part of (literally) playing the market.

The aha experience occurred when I realized that the previously intimidating countertrend movements were essential to the seal game: you couldn't play on the floes if you didn't climb up and slide down. The downward movements in a rising trend were part of the opportunity to continue play! I realized that I should work on incrementally adding to positions to get back on the slide rather than attempt to predict dips before they occurred. Better strategies for position sizing, not shorter-term trend trading, was what I needed.

Interestingly, before enacting the dream, I hadn't given position sizing a moment of thought while contemplating my trading ennui. It was a nice illustration of Mahrer's use of dreams to enter a new state and see oneself afresh. Whether I use this experience to catalyze a breakthrough in asset allocation or not remains to be seen, but I can report that, since the experience, I have not lost the sense of playing the market.

I would be interested to hear of others experiences encountering Fred in dreams, creative arts, games, and other spontaneous, non-Freudulent activities. Thanks for the opportunity to be part of the Tribe.

Hey Ed,

I just wanted to check in and see how your doing. Last week's tribe meeting was clearly a transformation for all of us. I want to thank you. You were an inspiration of emotional openness and the joy I felt from your AHA and concluding expression was simply a profound experience for me.

OK.

What is Truth?

"Do not believe because you saw the written
word of an ancient sage;

Do not believe on the authority of masters or
priests;

But accept as truth and conform your life to
what agrees with your experience and after
a profound study satisfies your reason and
leads to your good."

-- Siddhartha Gautama - (Buddha)

I agree with the ancient sage that truth is a very vague concept. More often that not we welcome as being true that which conforms to our own inner concept of truth.

With that in mind, I feel that truth is a result of a collective agreement about a particular issue. Even though always subject to review, the older the better. For instance, "Go with the Trend" is true for speculators because there is a collective agreement among long lived speculators that the method resonates with their experiences and feelings.

That said, Ed Seykota, I feel that we benefit the most from statements which find convergence among traders and which have gone through the test of time.

In this sense, I find particular interesting how old timers describe their feelings while being "in the zone". That's a tangible aspect to which the less experienced can compare their current level of development and concentrate efforts towards better attitudes.

In this regard, there are some shared statements among old timers which I find particular interesting:

The predominant trend is evident and easy to feel or see; Rather than the trader calling the best trades, the best trades call the trader (it would appear that traders evolve toward an inner state of absolute silence and responsiveness); In the zone, feelings flow naturally, i.e., there are no conflicting feelings, and ... The best way to learn is through practice in real situations. Please let me know what you think about it.

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