Questions

Answers

Sat, 24 May 2003

London Tribe

Welcome

London, England!

You are now on the

Tribe Directory Page.

Little Ben

Famous London tourist attraction

for the budget-minded traveler.

Clip: members.aol.com/

Sat, 24 May 2003

Gambling-2

Feelings of needing to gamble might transform into other forms of frolic.

Lamb Gamboling

http://www.newrivervalley.com/

lambs/page2.html

Sat, 24 May 2003

Processing the Process

Hi there ...

I was wondering if you could you bring your insight to bear on something...

I've started applying the process to myself. When I feel a "drama" coming on, I stop, sit tight, and meditate on the feeling ... exploring it, trying to find out how and where I experience it ... and just "go with the flow" - see where it takes me ...

I have one feeling that now I'm actually paying attention to it, I recognize it as being quite common ...

Something happens ... usually bad ... money related, or perhaps "done something wrong" or "in trouble again". I feel it as an "unpleasant" surprise, I'm hit by a "thud" in the stomach as it drops, tense jaws, kind of frozen in a "now what?" type feeling ... As I concentrate, I note a slight headache and perceive voices. One is kind of wordless, more of a shocked feeling than can be summarized as "How can this be happening?" "They can do this to me", "This shouldn't be happening like this" or even "why does this have to be happening".

It's a "shock" that "not doing anything" (i.e. inertia, head in the sand, irresponsibility or rather not taking responsibility) either hasn't made a problem go away, or has actually caused a problem instead of making everything OK, as I'd kind of hoped it would. Also, as I concentrate, I get fuzzy little snippets of memories of times when good things seem to just have "happened" without me actually having to do much. At the same time I'm telling myself "You should have acted earlier", "its your own fault", "you knew you should have done something", "you could have seen this coming" or "you knew this could happen" culminating in "Jeez, why don't you act when you have the chance?" and a few other self-referencing expletives.

I've been meditating on this for a while, and although I "understand" rationally what's going on, and am fully aware of what I *should* do for these situations not to arise in future, the feeling hasn't resolved (I haven't resolved it?) into an aha.

Trying to figure things out interrupts TTP. You might formulate your need to analyze into a feeling and notice where it takes you.

When you run your narration of the thud, tense jaws, voices ... you might try suspending the judgment that these are bad feelings and just get in to them as pure experience.

Notions about "should" can interfere with experiencing the way markets are actually trending.

A skillful receiver can help you focus the feeling, keep validating it and encourage you to keep going forward.

A Rose

Analyzing it, judging it, evaluating it ...

all interfere with experiencing it.

Clip: www.platinumphoto.com/Models/

Gladis/Gladis%20Smelling%20the%20Rose.jpg

Sat, 24 May 2003

CM/Fred

Hello Ed,

Your model of the mental process intrigues me. This model does have some basis in a number of psychological, scientific and religious theories including Ying/Yang, Left/Right Brain, Conscience / Unconscious, Physical / Spiritual, Foreground / Background, Right / Left, Conditioned / Unconditioned reinforcement to name a few.

Correct me if I am wrong, but you believe that having the two sides working together in harmony would help the trader in the trading process or for that matter in any human process. You have found the Trading Tribe methodology as a way to get there.

In the sixties they called groups like the Trading Tribe sensitivity training. In the seventies they called them T-Groups. I don't know what they call them now. Do you see any differences between them and your methodology?

I was a Psych major until I read the debate between B.F. Skinner and Carl Rogers about psychology, determinism and Free Will. You might, if you haven't read it already, enjoy a book by Carl Rogers called "Becoming a Person". It talks about communication between one's conscience and unconscious sides, and with other people.

I liked Rogers because he wasn't afraid to test his theories and get rid of them if their results didn't fit. One might compare it to back-testing of a trading system. Rogers has also written books about T-Groups. Other authors like Alan Watts, Richard Bandler, John Grinder, Freud, Anthony Robbins all share your CM/Fred model in one way or another.

See Trading Tribe Process, at Other Methods

In the case of yearning to get out, you might locate the feeling of being trapped, and allow Fred to present it fully to CM.

Feeling trapped in a position can lead to the Drama of panicking out of your winners.

You can get a sense of the how TTP works by reading comments from contributors who are experimenting with it and reporting back.

Some yearn to get out ...

some to get in.

Clip: www.sengers.ch/special/trapped.jpg

Sat, 24 May 2003

Control

Ed,

I believe your position on trader feelings is: that these must be expressed, "or else"; and that for full expression to occur, other people (and ideally a structured process) should be utilized.

Who were your own people and what was your own process as you worked on successfully expressing your own trader feelings? What I am getting at is, there was no one pioneering TT when you did this stuff. There was no model to work from, I believe.

Or was there?

Did you attempt to use journaling of another self-referential (singular vs. social) technique or process to express?

If so, why do you think it failed?

If not, how did you know to go directly to expressing to others?

-----

The Trading Tribe avoids the use of "must", "should be", "must have" as these tend to invalidate feelings and shut down communication from Fred to CM.

Ideas about what markets "should" do can be expensive.

You might examine your feelings of wanting to control conversations, and avoid the unpredictability of intimacy.

Control Replaces Intimacy

Clip: www.pa.msu.edu/gtour/

Sat, 24 May 2003

Personal Growth


Dear Mr. Seykota,

Thanks for posting my last email on your FAQ.
Your comment, "If you are the amender, you might have some feelings about projecting yourself in public, letting others know who you are", pinpointed a message from Fred inside me - before CM realizes.

Probably Fred wants me to express myself more in the public but my CM is blocking me in some ways. So is this "AHA"?

Indeed, it is a great experience. A question came up in my mind, what if somebody does not want to be mirrored or feel very uncomfortable during the Trading Tribe Process? (too stubborn / aggressive?) Or they do not want to be exposed about their feelings?

See: Trading Tribe Home Page and Trading Tribe Process.

-----

The Trading Tribe follows trends in the markets, trends in feelings. It supports people being how they are, does not tell people what they should feel or do.

People who are not ready for TTP generally do not join a Tribe.

Bashful

Some are Shy and Stay Distant

Others bring their shyness to the Tribe

as an item to experience.

Clip: www.xs4all.nl/~hwalther/

Fri, 23 May 2003

Here's one:

The Path

A Path at Harbin Hot Springs

Clip: www.harbin.org/links.htm

Fri, 23 May 2003

Lake Ratio

Dear Ed,

For years I've been fascinated by the graphic display of quantitative data and believe such displays will improve greatly as inventive minds use ever-more powerful computers.

Your Lake Ratio is an elegant and practical improvement over Sharpe Ratio.

To determine the Ratio, the draft states "volume of lake divided by volume of earth underneath". I don't see how that could be accurately calculated, as I believe the volume of each would vary depending on the graph settings. Possibly do you mean "depth of the lake divided by the depth of the earth underneath" ?

The Lake Ratio measures volatility over the history of the account. Plot the equity on a scale starting at zero.

The Trading Tribe goes with the flow of feelings, with the flow of the markets. Understanding is optional.

You might consider Lake Tahoe as a nice place to resolve your need to understand.

You might like to be a shoe.

Specialist in under-standing.

Clip: http://jobsearch.nmu.edu/

students/articles/dress/

Date: Fri, 23 May 2003

Emotional Intelligence

You might take the actual physical feelings you associate with flunking tests, particularly the items you miss, into your meditation. 

If you try to ignore Fred, you might wind up taking tests in the markets

Failing the Diet

Suppress the Feeling of Hunger

and Fred Still Finds a Way

Clip: www.dietriot.com/fail.htm

Date: Fri, 23 May 2003
 

Trading Tribe Meeting

Hi Ed,

Thanks for the enlightening meeting yesterday. I saw firsthand how the Tribe and each individual reflexively help each other accomplish magical changes, with your guidance to keep it on track.

I see teamwork gets things done better and look forward to next meeting.

Regards,

Teamwork

Yes

Fri, 23 May 2003

More on Inflation

Ed,

Thank You.

Thank you for the picture of the squirrel. Laughter is good medicine.

Also, big, big kudos for your definition of inflation. I hear so called experts claim over and over that prices are going up, and blame it on inflation.

Prices can go up or down for a host of reasons that all figure into the supply/demand curves. The prices of computers and other electronics have been dropping for decades.

Governments, like people, tend to inflate a bit as they mature.

Some Forms of Inflation

depend on hot air.

Clip: www.abc.net.au/rn/talks/

Fri, 23 May 2003

Childhood

Mr. Seykota,

I found your posting "Rules and Authorities", seemed to hit me directly. You say "When CM doesn't listen to Fred's feelings about childhood trauma ... Fred keeps setting up dramas to get CM's attention".

I find myself acting out these dramas nearly every day in my current job, but can't seem to make the connection. Although I'm very capable to perform well in my current job, I seem to find ways to ensure my failure. I will commit to ambitious deadlines for projects, and fail to meet them consistently, and apologetically.

Afterwards I feel terrible about myself and vow not to do the same thing again, but then the cycle repeats.

Likely you have very deep feelings about trusting other people.

Here We Are, Joined Together

now, again, and forever.

I see you reflect love's beauty

You make my life so worthwhile,

my Child

Clip: www.christian-thinktank.com/trust.gif

Lyrics: Child (c) Ed Seykota, 2003

Fri, 23 May 2003

Feelings About Not imposing

See:  Reference

OK,

For the last two days, I've been trying to feel the feelings about doing it all on my own. Using The Process has been very difficult because I had a hard time feeling the feelings. I tried and tried, and tried some more, and still ... nothing. I then thought about how to logically identify the source of the problem by working backwards:

1. Seykota says, "You might take a look at your own feelings about wanting to do it all on your own - not impose on others." I thought I was being polite - what was that all about?

2. Why do I dislike imposing on others? Come to think of it, I rarely ask for people to help me at work and at home - they always come and ask me for help. How did Ed get that one? And is this an ego / pride thing?

3. Was I brainwashed to not impose on others? Is it rude? Asian culture teaches us to not impose / be an imposition on others, and to be unassuming.

4. When I was young, I remember my parents telling me to not ask so much of others - it's rude.

5. Even though tracing it back this way seems logical .. somehow, that feeling of imposing is still there ...

Unlinke the Aha moment I experienced about the 4th grade English class and commitment, it's very hard to resolve this imposing issue by myself. THAT is when I realized that the problem has surfaced again! I just said, "It's very hard to resolve this imposing issue by myself."

Now I know how the Trading Tribe Group setting can help: by mirroring the feelings of an individual, the group becomes very supportive, all participants know and embrace the same feelings, and it becomes easier for the person to feel the feelings.

When you fully experience the feeling of wanting to do it on your own, you may realize the importance of a great team in helping you, well, do it on your own.

Racing

A driver is as good as his team.

Clip:

www.nd.edu/~ndracing/team/team96.html

Thu, 22 May 2003

Gambling

Dear Ed,

After 8 yrs trading pa (last 2 full time) I am having difficulty in breaking a pattern i.e one where I am consistently profitable then end up blowing the majority away in some sort of gambling frenzy.

When this occurs I go back to certain books and try and find out why I do this, one passage I read is your answer in wizards where you speak about everybody gets what they want.

On a conscious level I definitely do not want this to happen yet understand that the consistency of these blowouts means I am fulfilling some other need.

How do I get to the root of the problem, I did see a NLP practitioner some time ago and thought that would work and maybe it helped but I would very much like to solve this once and for all.

The Trading Tribe Process gets CM listening to Fred. This breaks the pattern.

In a holistic world, the question, "why" has no meaning.

You seem to have some deep feelings about gambling. You might ask your Tribe to help your CM experience Fred on these matters. 

Once Fred informs CM directly, the need for drama disappears and the feeling transforms into its positive intention: perhaps, to warn you about gambling.

Gambling to the Max

Fred finds a way

to get the Message to CM.

Clip:

www.midgard.liu.se/~b97gorkl/smuts.gif

Thu, 22 May 2003

Bright Bulb

Ed:

Would you recommend a good back testing site or software that is user friendly?

You may have some feelings about abusive language, offending people, people leaving you.

Don Rickles

Mr. Nice Guy

Thu, 22 May 2003

Process

Dear Ed,

I have done a few sessions of the Process with friends and I have two questions: 

1. How important the receiver's capabilities are ?

If I come up with issues that are "too much " for the receiver, if the receiver is overwhelmed by the feelings, can he/she stop performing the assigned task properly by skipping mirroring certain statements and feelings? In other words how important is the training of the receiver(s) and how important it is that they do not have the same issues as the person in the hot seat? 

2. I notice that when in hot seat, constant mirroring throws me out of my continuum of feelings, it is interrupting.

I wait for the receiver to finish mirroring before I can move on. What can you suggest as far as frequency of mirroring ? 

Overall, the Process works, it does something. I am not sure where it is taking me, but I plan to stick with it as long as I feel is necessary. 

Do you need help preparing the program leading to mastery of the Process ? Can I do anything to make it available quicker? 

Receiving is critical.  The receiver keeps the process alive - or kills it. 

A receiver can get Fred complete in a couple of minutes ... or prevent it for hours.

Working with the Trading Tribe and fielding FAQ questions is helping develop materials. 

Mastery seems to come to those who practice sending and receiving with masters.

Washington Huskies' Cody Pickett

Completion depends on both

the sender and the receiver.

Clip: www.washington.edu/

Thu, 22 May 2003

???

Mr.Seykota

Gentlemen

Autor will evaluate possibility of diversification
in financial future as EN,MCT,LFT

Dissadvatage can be :

1. Financial futures market give limited opportunities vs. stock market (a lot of different positions)

2. Return is not better by traders with comparable qualifications.

But what of advantages can have financial future market vs. Stock market ?

1. Monday -Friday trading without stop ?
Is financial future market active overnight ?
Exist good oportunity overnight ?

2. More margin ?

It's crackers to slip a rozzer the dropsy in snide.

1952

2003

 Potrzebie Axolotl

Etaoin Shrdlu.

Thu, 22 May 2003

Application to Incline Village Trading Tribe

Dear Ed,

It makes sense a master trend trader would live in "Incline" Village ... during up-trends at least.

I want to join your Intentional Community, as I need help in emotional aspects of trading, and wholeheartedly can contribute for the good of the group.

Last night I spent hours reading your FAQ. I am awed. Driving home, reflecting on two concepts turned my parasympathetic nerve system inside out:

Shuddering tears poured out. All those sad situations flashed in front of my face. I embraced and experienced. I feel a "spell" broke, one which I no doubt cast on myself.

Fri, 23 May 2003

The Tao of Trading

Dear Mr. Seykota,

I read about you mentioned "Going with the flow" and I had very deep feelings about this concept. The philosophy of trend-following style trading is surprising similar to what Lao Tze's philosophy in his "Tao De Jing".

The identity of the amender is ambiguous. SVO-p grammar supports  identifying the subjects. See: Trading Tribe Process.

If you are the amender, you might have some feelings about projecting yourself in public, letting others know who you are.

Who is that Masked Man ....

He offers 30-year mortgages at 2.5%.

That, my friend, is the loan arranger.

Clip: www.tysknews.com/

Thu, 22 May 2003

Thu, 22 May 2003

Inflation is increase in the money supply. Prices rise in response to inflation.

1970 you can buy a new car for $2,000. 

For examples of Sweeping Away, check the German hyperinflation and the recent events in Russia. 

Have I Got a Drama for You

Just vote for me and I'll keep raising the debt limit and we can make life more fair.

Clip:

Thu, 22 May 2003

Nothing Works

You report feeling unsuccessful, unworthy, stupid, etc. You also seem willing to follow other's advice even with evidence this does not work.

If you have unresolved feelings of inadequacy, and are unwilling to experience them, you can count on Fred to arrange for you to keep acting out Dramas such as the ones you mention.

Joining a Tribe or forming one, and experiencing the feelings of inadequacy pass from Fred to CM ... might be simpler than having to act it out over and over.

CM Catches the Pass from Fred

so Fred does not have to set up dramatic end runs.

Clip: www.clayton.k12.ga.us/

schools/006/cheer/Candid%20Photos/

Wed, 21 May 2003

Enabling (myself?)

"You might see if Toxic Parents (see the Books Page) rings a bell for you.

If so, you might take your feelings into The Trading Tribe process."

Sure, it does. Nevertheless I think the title is a bit too strong. "Toxins" usually come from generations and, as always, I prefer to look for the positive aspect of everything first.

As the old sage said: "In every stone sleeps a crystal." Anyway, I think we might reconcile a strict upbringing with healthy attitudes towards our children, so as not to incur in emotional abuse and its unpleasant consequences. I'll pick a copy for me as it might help me cure my own emotions.

I have had very positive experiences when dealing with feelings, either through my previous thread in another community and through your FAQ. In personal relationships too, sometimes we find people who lend great support and help us achieve our best.

You might look up enabling and co-dependent to find their meanings in the context of relationships.

You seem be uncomfortable looking at "negative" aspects. The negative label is part of your way of not experiencing feelings. A Tribe can help you experience this tendency and release it.

Your co-worker sounds like a healthy and supportive friend ... you might ask her to pace your experience as you explore your feelings ... you might start with your feelings about judging feelings as good and bad.

Some People Can Experience A Grapefruit

and notice its color, flavor, texture, temperature, aroma, sweetness ...

and others just decide it's good or bad.

Clip: floridaindianrivergroves.com/

Wed, 21 May 2003

Wining & Losing Feelings

Dear Ed,

When Fred eventually gets the message through and I feel the feeling, is it enough to do it once or repetitions help?

Maybe, if repetitions occur, it means the message is not fully understood or received?

I have analyzed my feelings about wining and losing and came to the conclusion it is feeling of inferiority that I want to mask and avoid. Deep inside I feel weak and a loser, on the outside I win. Wining requires ruthlessness in my case. I have to see the opponent as an enemy not worth any kind of compassion. And I actually enjoy it, I become like an animal, predator, something primal awakes in me and I go with one objective in mind-win.

I define what is to win, when to stop at a profit and loss and stick to it. What bothers me is that feels so ... (I am having trouble exactly describing it right now) ... so inhuman, or so unfair to others ... I do not want the world to be based on this kind of behavior. Ha, maybe I am afraid of being simply on the other side and getting beaten?

But there is some kind of animalistic satisfaction after I win. Maybe it is only relief that I did not lose? I feel confused about the subject... I need to dig deeper till it resolves itself.

Fred's unexpressed feelings tend to nest in tangles and knots:

The Trading Tribe encourages fully experiencing the entire system of feelings; this might involve returning to feelings recursively, like pulling apart the strands of a knot.

The Essence of the Knot

is knot feeling your feelings.

Clip:

Wed, 21 May 2003

The Lake Ratio is a rule of thumb; you can derive a formula for it by inspection.

You might have some deep feelings about needing precision - not being able to proceed on incomplete information.

Kids Jumping Into a Lake

even without knowing the precise temperature, and dissolved carbonate content, in parts per million.

Clip: www.watertalk.org/

Wed, 21 May 2003

Murphy lacks a spoon; he could get one by asking for it.

The incident, however triggers some feelings Murphy has about about not getting what he wants (irritation, inferiority, sadness) which he likely does not like to feel.

So Murphy's Fred arranges a drama in which he puts down the waiter; the waiter sets up his own compatible drama by not setting the table properly.

The Trading Tribe Aha is not a big noise during the execution of a drama - it's a subtle release of tension as Fred finally succeeds in informing CM about an experience.

Excuse me, sir.  I need a spoon.

Clip: www.paramountcomedy.com/

Wed, 21 May 2003

Cleaning Up

Dear Sir:

Thank you for your FAQ website. It has been a big eye opener.

With regards to repressed feelings:

When you finally get to the center of the onion, you get another onion.

It's all drama and it's all just life.

Trading Tribe Customs:

You might consider the positive intention of anger - hint: the positive intention of thirst is to make sure you have enough water in your body.

Feelings Have Positive Intentions

Wed, 21 May 2003

Risk Management.

Wed, 21 May 2003

CM's nature is to do whatever it has to do to avoid Fred's communication about your issue.

Putting your own CM in charge of the Trading Tribe Process is promoting a Fox to take care of the Chickens.

Sure thing, no worries.

Of course I'll take good care of them.

Clip: http://pantransit.reptiles.org/

Wed, 21 May 2003

Harem Management

Dear Sir Ed,

Thanks for putting Karachi. Pakistan online.

I believe Successful Trading is going against human nature. A trader rises above natural tendencies, faults.

I believe Trading is amazing journey of Self- Discovery and Change for better. As one change the environment and the past only change him or her selves.

I believe Trading Tribe will have a larger impact on all of us involved it will change, for better our Psychological make – up and to change that is difficult and I believe only a trader like you can accomplish this with all your mentoring, wit, straight forwardness, success, wisdom and confidence you bring to all of us.

I had known that you had the talent of boiling downs complicated thoughts into simple sentences, but your internet surfing skills and content picking talent I just got to notice. It amazes me. How you find all relevant images and captions from the net for answering nearly all the questions.

I wanted to ask you is it true and necessary to have more than one system to trade with for different market conditions and market itself.

If you have several sub-systems and a systematic way to combine them, then you have one overall system; you can even simulate it to find optimal risk management parameters.

If you do not have a systematic way to combine them, then you are setting up a nice playground for Fred.

You can play on the ladder, the swing and the slide ...

and go back and forth  between them

whenever Fred wants attention.

Clip: http://www.parkvista.com/fun.htm

Tue, 20 May 2003

Quick ... Gimme the Trade Secret

A man calls up a tire shop and says:

"I want to ask a simple question: which tire is the best."

He doesn't tell the salesman what kind of car he has, or what kind of driving conditions he expects, or the price he has in mind.

The salesman simply listens.

The man goes on, "I want to know the Trade Secret about:

So When You Figure Out

What You Want

we probably have it in stock.

Clip: http://money.cnn.com/

Tue, 20 May 2003

Enabling

see Life Unfairness

Ed:

As I read the "How to use 'fairness' to get free stuff" technique I acknowledge I have been exploited a lot in this way. I just let the pain flow and I have had many insights. Thank you very much, Ed.

There is, however, an interesting link between "Life unfairness" and my previous post about getting into power struggles with girls I would fall in love with.

I notice I have been linking love with pity and I am usually attracted to girls whom life has been "unfair" to.

In a rather pathetic way, I have been trying to be the hero who spare them from life's unfairness. However, in a rather harsh and rude way, I have always been told that they do not care about my intentions.

Your anecdotes are consistent with co-dependent enabling behavior.

You may have deep feelings about wanting to save people, make excuses for them, get meaning by being the strong one, etc.

Sometimes, when an alcoholic reforms, the enabling spouse dumps the reformed alcoholic and finds another practicing one.

You might see if Toxic Parents (see the Books Page) rings a bell for you.

If so, you might take your feelings  into The Trading Tribe process.

The Trading Tribe supports the formation of Tribes and Intentional Communities. See Tribe Directory Page.

Enabling is a Drama Too

When Fred and CM communicate,

drama disappears

Clip: www.funnyclicks.com/

Tue, 20 May 2003

MA Question

Ed! Another question from your frequent fan...

After thoroughly studying Technical Analysis over the last few years, via reputable textbooks, online discussions, learning by doing, etc, I have observed that:

Probably the only way to assure profits is to follow the trend (surprise), both up and down/long and short. After researching, trying, back-testing, etc, probably the majority of the TA indicators, tools, etc, that exist, I keep returning to Moving Averages.

MA's are simple, they work, they trend, you can't break them ... indeed, some stocks are very haphazard and volatile, but some respond quite nicely to MA's. MA's have helped me identify all rallies/declines in the indexes, with the fundamentalist investor press only picking them up weeks later.

Maybe because MA's were "discovered" in the 1930's by Richard Donchian, and are not the latest gee-whiz, high-tech gadget, is why they are not in the first chapter of all the "hot" trading books and magazines.

Yet again, MA's WORK. They make me feel comfortable, and I like them. Did I mention they trend follow?

Ed, I do not want to know what I should do. What I should do is do what works for me (MA's.)

In Market Wizards (MW) you mentioned Exponential MAs as something you used (to what extent or success I do not know) in the early 70's. You also state you were intrigued by Donchian's works and his 5/20 crossover system. In MW, you also stated that you use end-of-day data.

Exponential Averages compute per:

EA(t) = EA(t-1) + (1/TE)[P(t) - EA(t-1)]

Moving Averages compute per:

MA(t) = sum[t->T+1](Px) / TM

MA evolves by discarding the earliest price while EA evolves by discarding the average price. To equalize ramp tracking, use:

TM = 2*TE - 1

A 5-day moving average

tracks a ramp the same as

A 3-day exponential average.

With this adjustment, MA and EA seem to give similar results.  The "right" system for you depends on your psychology.

If there were one right car, everyone would have the same one.

No Need For So Much Variety

Everyone Can Just Pick The Best One

-----

Your story about the college course:

Clip:

www.farkman.com/assets/goodies/cars.jpg

Tue, 20 May 2003

Koan

Very nice!

First, experience the feeling of wanting - lack and incompletion - it disappears.

That leaves the feeling of experiencing feelings - the light joyous nothingness of the persisting moment of aha.

Trying to keep the aha going - just takes you back to the feeling of wanting.

So goes the cycle.

Moving and Being Stuck

Define Each Other

http://www.tk421.net/gallery/

Tue, 20 May 2003

The Market

Dear Ed,

I think I made quite a progress in the market study. Among other things, I noticed that places where market direction changes (in the way I define it) are quite risky.

Wednesdays are some of the riskiest days to trade. The others are Monday, Tuesday, Thursday and Friday.

To Find the Risky Days

Look on a Calendar

Tue, 20 May 2003

Great Work!

The Trading Tribe does not tell people what they "should" do or what they "should" strive for.

It seems that as people clear deep feelings, they develop a taste, on their own, for freedom, respecting the rights of others and taking responsibility.

In the process they seem to cast off false authorities.

Evolution of Authority

http://www.yowiehunters.com/

Tue, 20 May 2003

Wants to See the Future

Your coin example is understandable.

But,

As you stated, luck and payoff may change with changing market conditions. Therefore RISK is the only parameter the manager can control. Can computerized back-testing ever give the trader a realistic feeling of how his or her system will behave if the above statement is true.

Fundamentalists predict. Trend Traders postdict and simuldict.

 Hummingbird

Peering into the Fuschia

Clip: www.grenadines.net/

carriacou/hummingbird.jpg

Tue, 20 May 2003

Surprisingly simple!

I'd like to share something that I think may be helpful to others, and also as a thank you to Ed.

I sent three comments in on the same night. In chronological order they were:

1) the Kelly and Shannon post (to which Ed aptly responded with the scarecrow)

2) the I, me you and us (to which Ed responded with an appropriate comment about my perceptions of boundaries between myself and others)

3) Humorously in hindsight, I then posted the sram and yuri question (which Ed responded to with a comment on existentialism and the aha.)

Funny that I seemed to be leading myself in the right direction but insisted on asking Ed for the answer.

Yes.

Getting Ready for the Open

Riding the Trends

Clips:

www.ient.or.jp/tlclub/

graphics/p4balloons.jpg

www.adders.org/

freeware/balloonswp.html

Tue, 20 May 2003

Risk Management/Position Sizing

Hi,

I read your website article re: Risk, and found it interesting, but I have a comment. I am a full-time equity trader using self-developed mechanical systems triggered by EOD data. I have spent a great deal of time on the topic of position sizing and risk.

At one point, I took my system's result parameters and created a Monte Carlo analysis on Excel, simulating 100 years of "theoretical" results from my system, in order to examine variability of returns and drawdowns. While the results were useful to a degree, I kept coming back to a conceptual issue that I think is also pertinent to your coin toss example in your "Risk" article:

Since your coin toss example, and a general Monte Carlo analysis rely on a statistical estimate of a "success ratio/win rate", I feel that there is an inherent oversimplification in the assumption that this win rate is "constant" over time. Example: If your system generates 500 trades in a year, and 250 of them are successful, then you would naturally infer that your method has a 50% success/win rate. However, while this may be true for all of the trades considered as a single group, the far more likely situation is that this 50% "win rate" is nothing more than an "average" of many shorter-term "hot" and "cold" streaks experienced throughout the trading year.

There may be favorable market periods within the year where your win rate is 70%, and subsequently, there may likely be other unfavorable periods where your win rate is only 30%. Either of these periods may exist for quite awhile, while still "summing" at year's end to a 50% win rate. It is during the "cold periods", where the win rate drops to, say, 30% for a time that I feel traders are vulnerable to "blowing out" if using a simple 50% win rate assumption when calculating position size.

I really feel that the best way to calculate optimal position size for "success" (as opposed to maximum profit) is to:

Regards,

Tue, 20 May 2003

Feeling More

Dear Ed,

These feelings, it is really powerful stuff. Makes me feel alive. Most of my life is dull, but when I feel and experience the feeling fully without expecting anything ... live is rich, pulsating and bubbling experience.

I am looking forward to feel more than before. When I allow myself to feel, I feel free ... , time seems to stop or disappear and nothing really matters except for the current moment and the state I am in. I have a faint intuition that if feeling appears and it hurts is not the feeling that hurts but defending against it. But I am not sure, it can be both ... or something else.

I know that in the end I want to experience certain feelings. What steps I take in the process to feel depends on the level and frequency of the feeling up to this moment, which depends on my resistance to feel. My resistance is big, too big for me to live like this anymore. I want to change this. I am glad that I came across your web site. It is great. And I want to join the Trading Tribe. So, my question is: Can I join the Tribe?

Thanks for your time and expertise.

To join a tribe or to start your own, see Tribe Directory.

To dissolve resistance, treat it as another feeling; experience the resistance and it turns into aha. 

The Match and the Air

Experience Each Other

and

Clip: www.filmworld.com.au/htm/

collections/collections_corbis.htm

Tue, 20 May 2003

Florence Tribe

Dear Mr Seykota,

I would like to start a Trading Tribe here in Firenze (Italy). I read the Trading Tribe Member philosophy and the membership checklist.

Even if I have been in the futures market for 10 years and traded as 'local' in the LIFFE pits I have a lot to learn. Especially when it comes to shifting my trading from intra-day to medium and long term trading and to left winners ride and cut losses.

Best regards, as ever

Welcome

Firenze, Italia

(Florence)

View From Piazzale Michelangelo

You are now on-line

on the

Tribe Directory Page.

Clip: promoter.ics.uci.edu/

Mon, 19 May 2003

Life Unfairness


"Life is not fair; if it were, you would look like me. You might examine the feeling of wanting things to be fair."

Ed:

I feel we have touched a very sensitive area and I locate feelings of resentment towards life unfairness. I feel deep pain. How to cope with that?

The way to cope with it: stop coping with it and to start experiencing the feeling of it.  The rest is automatic.

Pain about fairness runs deep in our culture; some people even specialize in exploiting the cultural avoidance of experiencing the feeling.

Here's how to use "fairness" to get free stuff. The technique is pretty cool.  It works like this:

Note: The tactic fails against the Trading Tribe since:

Foundations like The Center for Character Development help support  cultural notions about fairness, by conducting fairness trainings for children.

CCD Training Exercise

Links Fairness to Sharing

The Caring Meal

1. Set up 2 long tables. Prepare a feast for your students. This feast could be just candy, fruit, bread and other goodies.

2. Put all the goodies on one table. Put only some bread and water on the other table.

3. Have some of your students sit at the feast table and some at the bread and water table.

4. Have the students eat what is at their table.

5. Watch and see if the people at the feast table share with those at the bread table.

6. After a while ask the students how they feel about this feast and discuss the character principles of caring and sharing.

-----

Note: The Center for Character Development affiliates with Indiana Department of Education, Purdue, Notre Dame, etc.

Mon, 19 May 2003

Rules and Authorities

Year 198X
Jack Schwager: What are the trading rules you live by?

Ed Seykota:

a. Cut losses
b. Ride winners
c. Keep bets small
d. FOLLOW THE RULES WITHOUT QUESTION
e. KNOW WHEN TO BREAK THE RULES

Year 2003

Ed Seykota writes an article on Risk management :

Risk Management - Summary

1. Clarifying trading and risk management systems until they can translate to computer code.

2. Inclusion of diversification and instrument selection into the back-testing process.

3. Back-testing and stress-testing to determine trading parameter sensitivity and optimal values.

4. Clear agreement of all parties on expectation of volatility and return.

5. Maintenance of supportive relationships between investors and managers.

6. Above all, stick to the system.

7. See #6, above.

And Ed is not asking to break the rules (system)! Why change of heart and preach what you don't practice?

You seem to have some deep feelings about authority figures: relying on them, trusting them, finding them inconsistent, having them hurt you, trying to confront them.

You might take your feelings (likely anger, sadness and grief) into the Trading Tribe Process and see what ahas arise.

Perhaps when you resolve your authority issues into ahas, you may find it much easier to find and keep harmonious employment.

Childhood Trauma

When CM doesn't listen to Fred's feelings about childhood trauma ...

Adult Trauma

... Fred keeps setting up dramas to get CM's attention.

Clips:

www.lawontheweb.co.uk/

images/mansacking.gif

www.hawaflcio.org/

Mon, 19 May 2003

Birth of Another Trend Trader

Dear Ed,

I thought thoroughly about your words.
Indeed, I think my intention is to catch tops and bottoms. Indeed, if I imagine myself in the past, and slowly unfold the prices, I would like switch at the tops/bottoms. And, indeed, unfortunately, I don't have a recipe for doing that. In its limit, this would mean intraday buying and selling - a prohibitively expensive proposition.

I hope however that there is something behind that. Namely, I would (like to) think that, probably, there are some statistically reasonable strategies for improving the performance of the trend following. I'll try to do that.

The more I play with the data and the more I watch the market, the more I see that my interpretational abilities should be removed from decision making.

The only rational way is to explicitly make rules, perform numerical simulations, estimate profit/loss/risk, and play with couple of parameters. Augmented by money management, this (supposedly) may be a basis of trading.

Market is too big and formidable for me to make interpretations. Probably, some people can do that, but not me.

Yours Igor.

Mon, 19 May 2003

Vern in your FAQ

Dear Mr. Seykota

Sorry but possibly is not all right with your web page. If I login to my broker open your page and press button FAQ on your page original image and text in page of my broker [xxx] substituted with text of your FAQ . In old frame with adress line of my broker I can see your FAQ, but not my portofolio, quotation & But in case of second broker [yyy] it work okay.

Excuse me, is it possible to think that your www page infiltrated with viren? And page of one of my brokers is not very secure?

Thanks for the notice. I am posting it to warn the others. Maybe a good idea to wear protective headgear for a while, until the danger passes.

Official FAQ Upgrade Kit

Warning !!!

FAQ may contain Verns and Viren, and may be hazardous to your belief systems.

Mon, 19 May 2003

So the fair maiden pays a fairly fair bus fare to go have an affair on a Ferris Wheel at the fair.

She gets there fairly late ...

... and winds up in a different basket with a Dilithium Salesman from Gronk ... and that hardly seems fair.

http://solomon.physics.sc.edu/

Mon, 19 May 2003

Your meeting time is on the Tribe Directory page.

At this time, attendance at a tribe or intentional community meeting does not confer any form or certification of licensure from The Trading Tribe

I generally telephone newly forming tribes during their first meeting to say hello and extend congratulations.

You might take a look at your own feelings about wanting to do it all on your own - not impose on others.

Even Hermit Crabs

Form Symbiotic Relationships

Some hermit crabs place anemones on their shells as camouflage and protection from predators. The two invertebrates share food. When the crab outgrows its shell, it leaves it behind and finds a new, larger shell and transfers the anemones onto it.

http://www.bigpacific.com/

Mon, 19 May 2003

Feeling the feelings

Dear Ed,

Thanks for an absolutely superb forum. I've often hunted around the internet looking for stuff by you, and now finally found something ongoing.

About feeling the feelings: When I start focusing on one strong feeling (eg. the need/drive to get into the market, before my signal is fully confirmed ie. impatience / over-eagerness etc), it then takes me to another 'picture' in my mind with a different feeling attached (eg. a family member, along with a new feeling).

The original feeling then pales into the background (ie. the impatience / over-eagerness). I sometimes think "Hang on, let me get back in touch with the impatience to make sure I've felt it fully".

Some feelings guard others, in protective layers. When you start to experience one, another feeling (that you don't want to feel either) may come up as a protector.

A friend or group can help you focus your feelings during these evolutions, and also help you return to the primary feeling as the protectors disappear.

The Trading Tribe Process includes mention of the Limbic System in the description of Fred.

Guards

Some feelings guard others. To get through them all, experience them as they appear, and convert them all into ahas.

http://www.angelfire.com/tx/

Mon, 19 May

Chess and Trading

Hi Ed

I find this link interesting:

http://www.fastcompany.com/

online/24/chess.html

It reminds me of how your site is developing, especially the last paragraph titled: "To Learn How to Win, Learn How to Lose".

Chess, backgammon and other games of strategic risk-taking provide rich metaphors for trading.

Emanuel Lasker 1868-1941

World Chess Champion: 1894-1921

http://www.insight.demon.co.uk/

Technical_Articles/worldchamps/

lasker/lasker.htm

Mon, 19 May 2003

London Tribe


Dear Ed,

Mon, 19 May 2003 10:03:17 -0400

Report from Toronto Tribe

Hello everyone,

Is anyone concerned about the possibility of not having an “aha” orgasm in their first meeting?  We have had four meetings in Toronto with a total of five people on the hot seat and I have witnessed two ahas.

Just like an orgasm, there is no mistaking when you have had one! However, a public aha is not always required. An aha or simply some deeper thinking may come hours or days later to the hot seat occupant.

In our first meeting I took some time to review the importance of emotions in trading and life. However, we spent the majority of the meeting checking in and getting to know each other.

Mon, 19 May 2003

Don Juan Calling In

Dear Mr Seykota

I am a futures trader and NLP student. I really like the your FAQ, no quick fix or holy grail but many clues to learn and grow.

I always try to learn something new about myself, the others and the markets. I noticed that when I am focused on learning, trading doesn't seem like trading at all, is just absorption and fun. In order to stay focused on learning I need to act like Carlos Castaneda's Warrior.

The Warrior threw his ego into the dustbin, he has no expectations, he's not fighting against the others, he is fighting only against himself, against his limits.

FAQ encourages the formation of intentional communities. See: Tribe Directory.

Carlos Castenada

Carlos Castenada's New-Age Shamanistic writings contain metaphors about the Noble Warrior and Mystical Journeys.

http://www.paranormal.de/castaneda/

Mon, 19 May 2003 07:44:29 -0400

Risk Control

Mr. Ed Seykota


Mr. Seykota stated in Risk Management at 17 may 2003

... A losing streak of even one trade, without proper risk control can be a Waterloo.

1. No close to open risk, without exception,
for each instrument.

2. Multiple account by different brokers.

3. Not more as 2-2.5 % bet value from total equity for all instruments.

4. Only securities liquid enough for autor trading volume.

5. Multiple communications chanels with brokers.

6. No option underwriting activities ,separate option account with account value not more as 25% from total equity. Option transaction volume not more as 10% from all volume.

7. After losing streak started with 4-6 consecutive loss from possible 30 ,change tactical approach and after that folloving bet reduction.

8. Two order praxis.  First order buy or sell short ,second stop loss.

You seem to have deep feelings about communicating clearly.

Dilithium Salesman ...

... starts gronking away, forgets to establish rapport with the buyer, and loses the sale, even though the buyer needs at least 2 ounces for his tradefader.

http://www.hypsos.ch/traitements/

communication.gif

Mon, 19 May 2003

Joining Incline Village Trading Tribe

Ed,

Greetings again and thank you for your response.

I live in Sacramento and am of 30 years of age. Originally from Los Angeles, I decided a few years ago that a change of location was due since a majority of family members had already congregated to the general area.

Regarding my trading, it continues to evolve. While I used to test the quick in and quick out types of trades, I have come to realize commissions present a formidable problem within such a short term time horizon.

Welcome.

Mon, 19 May 2003 00:37:54 -0400

Sram and Yuri

see Trader Models 3

Great point under the Sram and Yuri Pics.

 "You may have feelings about them, and you may have judgments about these feelings."

At times, we can throw ourselves into confusion loops based on this idea. Example of a Confusion loop: Say I pass a judgment, then I have feelings about passing the judgment, then I pass judgment on my feelings about my judgment. Then I have feelings about my judgment about my feelings about my initial judgment.

Now I might talk to someone about my feelings about my judgment about my feelings about my judgment about my feelings about my initial judgment. Then we might talk about talking about it. The cycle can proceed infinitely and snowball into a big mess.

Confusion loops can be devastating and waste a great deal of time. If one is philosophically and / or analytically inclined, one can be especially at risk to confusion loops. If we let them go we can recognize the inherent perfection of things just as they are.

When CM tries to consider feelings and judgments about itself, without consulting Fred, things seems to go round and round, in a big cycle.

When Fred and CM collaborate, such issues become ahas, existentialism gets interesting, to the extent that it's fun.

Soren Kierkegaard (1813 - 1855)

Father of Existentialism

Jean-Paul Sartre (1905 - 1980)

Modern Existentialism

Soren and Jean-Paul find Fred,

do some ahas together, and become

a couple of regular party animals.

Clips:

http://www.angelfire.com/

co2/grubb/images/IGOTIT.gif

Mon, 19 May 2003

AHA AHA AHA

Children seem open to feel whatever they feel. Their moods change from moment to moment as they keep experiencing their feelings. As we mature, we learn to contain our feelings.

Ha Ha Ha Ha Ha!  Aha !  Got Milk ?

Clip: http://www.jasper-sky.com/

Sun, 18 May 2003

I do not know of any trading system with a track record for consistently profitable trend trading using a 15 minute time horizon.

The Holy Grail

turns out to be a stopwatch.

Clip: http://www.porkboard.org/

Sun, 18 May 2003

Danger situations = Creativity at its Max performance

Danger/ = Creativity at its Max

Yoshiro Nakamatsu, holder of the most patents in the World, does his “creative” thinking underwater in his pool until he needs to rise to inhale oxygen.

He claims that when the brain is deprived of oxygen, the limbic system (instinct) is at its peak performance.

You claim the best inventors come from humbleness and hunger. You ask me for reasons for this.

For Trend Traders, reasons are optional. In a holistic world, everything effects everything else.

You might have some deep feelings about humbleness and hunger.

Floppy Disks and Memory Chairs

“I have been a part of many great innovations,” says Dr. Yoshiro Nakamatsu, who holds more than 3,000 patents. “At the end of the next millennium, they may forget that I invented the floppy and the digital watch and remember me for improving sex with the Love Jet.”

The Love Jet helps the body secrete the sex hormone DHEA, which Dr. NakaMatsu calls “the medicine of love,”  and has been dubbed by the media as spray on Viagra.   

Some of Dr. NakaMatsu’s other inventions include Yummy Nutry - Brain Tobacco (to stimulate your brain to new creative heights as you smoke) — and the Cerebrex (a chair that supposedly improves memory, math skills and creativity just by sitting in it) but these never caught on in the marketplace.

Clip: http://www.creativityatwork.com/

Sun, 18 May 2003

Risk management During the Trade

Hello Ed,

Very good this stuf about risk management. I use the kelly formula for initial positions.

I trade futures in 2 ways
1. Swing trading
2. Long term trend trading (something like turtle)

The central question I have is:

HOW MUCH SHOULD YOU ADD TO WINNERS?

The risk you are talking about is always the initial risk when you start a position. My feeling (I'm studying it) is that there is a lot of profit in the way you manage risk DURING a trade.

I think the way in which you add to winners is crucial for (big) profits.

I don't always agree with the turtles..
Sometimes they are too aggressive and sometimes I think that you should still add, and they don't....

My idea is: you should use e.g. the Kelly formula for the initial position. But then?

Please read about the following situation:

I have a initial position and my system tells me to put my stop at or better than my initial position.

My risk = 0, but the question is should I put again risk to my position or should I wait until my initial position + stop have a profit, which I can risk. Psychologically you are happy that you cannot lose anymore, but the other thing is that you cannot win (more) if you don't risk more.

What goes around in my mind when I manage positions is the last, so I add rather quickly. I do it intuitively. Now I want to organize this better and I want to develop a plan. A way to look at it is to trade more systems. Adding to positions means "re-acting on a signal of a second system".

So what should you do?

Take the system (1) on which you got the signal for the first position.

Suppose you bought at price p1. Take a certain amount (e.g.) 2% or 2 ATR. Now test your system when you would have bought not at p1, but at p1 + 2% (or +2atr). If the statistics are oké you can buy. How much you can buy depends on the Kelly formula. Of course this system has a lower performance than the first system. So the parameters in the Kelly formula are different. So you must add less than the first position...agree.....

But the 2 trades are 100% correlated....so what do you do with the total risk....?

So the next thougt is:

Suppose you can add
First quantity at p1
Second quantity at p1 + x
Third quantity at p1 + 2x
Fourth quantity at p1 + 3x

x is a certain amount of price movement, e.g. 2% or 2 atr.... (depending on your time frame)

Depending on the stop values you have a certain risk when you have the total quantity....you could set that on 3% e.g. and than pray everything goes all right....

Conclusion:

You seem to have a system that you follow for initial entries, and then you place add-ons by gut feel.

You might consider taking the feeling of all that drama into the Trading Tribe Process to find out what Fred is trying to tell you.

The Exciting Thing About

Adding On To Pyramids:

Sometimes They Fall Down

Clip: http://www.birdsinthebelfry.com/

house%20of%20cards%20falling.jpg

Sun, 18 May 2003

I, Me, You and Us

Ed,

In the natural state, we care deeply about the feelings of others. Since none of exist independently of one another; I do not care about you, nor do you care about me, we care about us.

Once seeing this; it sometimes pains us deeply when some of us see ourselves as others and it causes suffering.

This of course is a result of the fact that their suffering is not theirs at all, but ours. This is great; because we can quickly avert the emotional reaction and see that there is no suffering, and no joy, and so the "suffering" becomes "joy" which becomes nothing.

Unfortunately, the "joy" of this process can not be felt by those of us who see them selves as those of us as opposed to just us, or rather suppress "their" inherent understanding of the system in favor of attachments to the ego and the concept of the individual existence.

At times, We may even react negatively to this and allow us to become I and experience the suffering in the negative independent view independently of the joy of the positive collective view.

We care about us. Helping I's who imagine themselves as I's rather than us's can be difficult; especially when us becomes I (as in first person I, or "me.") Having, at times, seen us as I, we want to help us's when they become I's.

You might have some deep feelings about individuation and boundaries between yourself and others.

Early on it can be difficult to know who's who. Later on it can still be difficult.

Clip: http://www.parentspitara.com/

babynu/prenatal/lifestyle/5.htm

Trend Trading uses position sizing and trailing stops to control risk in inherently dynamic markets.

You indicate some kind of dynamic super sauce that makes "trimming trades" to improve on trend trading.. 

If you can produce a sample of such a sauce for, say, a simple 5/20 moving average system, I'm sure many would like to know the recipe.

You might be a very bright person with deep feelings about wanting to figure it all out, rather than simply going with the flow.

As a temporary work-around, you might self-medicate the feeling by ceremoniously awarding yourself a  prestigious diploma in trend following.

Ray Bolger in Wizard of Oz

 Metro-Goldwyn-Mayer, 1939.

The feeling of wanting to get some brains  motivates Scarecrow to follow the yellow brick trend all the way to Oz. The Wizard informs him he already has enough brains, and lacks only a diploma.

Clip: www.loc.gov/

Sun, 18 May 2003

Yes.

Old Turkey

"It's a bull market, you know."

Edwin LeFevre's 1923 classic contains characters and messages that linger in the mind and in the gut.

Clip: www.oefunds.org/news/

Sun, 18 May 2003

The Lake Chart visually illustrates drawdown duration and magnitude.

The Lake Chart

Sun, 18 May 2003

The Trading Tribe Process

Hi Ed,

I'm getting more and more curious how you feel about what I wrote to you. Each missive has moved me forward from the last. Like dropping rose pedals.

Now, I am thinking that Fred is not so much a psychological model of mind as a sociologic model of Mind (as Gregory Bateson used the term - one Mind in which we are all participating). This makes much better sense of what you are saying.

The Trading Tribe Process has an individuated focus, and a group (Mind) impact. The 'hot seat' is a conscious node (identified patient) of an associational network of connections in and between the members of the tribe present.

Others change 'by metaphorically' mapping their experiences onto the hot seat sitter. This suggests more possibilities than mere explanation.

Yes. The Trading Tribe seems to have a collective wisdom about the markets.

Exchanging knots is one of the methods.

Rose Petals - The One

Rose Pedals - The Two

Echinopsis Layii Petals - The Many

These Cactii may take five years to mature from seed. Curiously, they all spring into bloom on the same day, like traders discovering a market at the same time and having a collective, colorful aha.

Clips:

www.magusfloral.com/

Flower_Pictionary/I-R/i-r.htm

home.twcny.rr.com/andylevy/

dakota/gfx/pedals.jpg

http://www.dur.ac.uk/