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Ed Seykota's FAQ
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Contributors Say Ed Says

Feb 20, 2014

Govopoly Models Work Now (see below)

Dear Ed,


The models work now and I am playing with the settings. There seems to be an issue with my Google Chrome browser, I try the models on windows explorer and they work fine. I have not and will not dig into the Chrome setting unless it will help you. Let me know if you want me to find out what the issue with chrome is otherwise I will follow the trend and use Explorer to run the models.

Thank you for your immediate and personal attention to this matter! Your Tech Support is top notch!

I will send feedback after some careful study.


Thank you for the feedback.

Feb 20, 2014

Govopoly Models Don't Work

Hi Ed,

I still can not run the models, pendulum lab, assimilation lab, trend-following lab and bubble lab. They all give a nullpointerexception error. The first two run fine, and I check multiple PC's all give the same error, so I think my PC's are ok. I wonder if you know of anyone else with this issue when running the models?

Thanks for any help on this matter


Thank you for raising this issue.

Please call the tech support number - with information about your computer platform and browser.

Feb 19, 2014

Profits and Gratitude

Dear Ed,

A trend of gratitude, numerical bliss and profits continues.

To: Chief Seykota and the FAQ cyber-tribe: Thank you for your contribution's.

My system improved, results reflect in my MAR.

My model account is up 132.9% since June of 2011.

I calculate CAGR of 53%, max drawdown of 32% Present MAR is 1.65625, up from .71 in November, 2013.

Is my math accurate? Should I check MAR monthly and/or average MAR? What's Bliss got to do with it? Shortcuts?

Thank you Ed. Cyber-tribers, I appreciate your support.

Thank you for sharing your process.

Feb 19, 2014

Govopoly in Italy

Hi Ed,

Govopoly is an enjoyable and challenging reading and many question arise. I really appreciate the message and I can easily recognize my own thinking in it.

I feel your book as a primary resource and a reference that I always carry with me because many times I need to look for a row, a paragraph that help me clarify my doubts. Reading Govopoly is really an experience. My desire is to learn and understand more.

Here in Italy, in 20 years (since 1994 to present), we have a total of 8 different governments and only 2 of them elected by voters, as it's required by the Italian Constitution.

The remaining 6 are the result of Government in charge failure to get the majority of voters in parliament and subsequent formation of a new one without the votes of the voting citizens.

Emergency measures is the typical reason. I view all of this as "government by government sanction”: I wonder if a government that generate itself in a democracy is a symptom of the 39th Day stage and consistent with your Assimilation model.

I find challenging the opportunity to adapt to developing trends: thanks to reminding me the essentials. I smile, tap my feet and I feel a bit of impatience for your intention to publish The Trader’s Window: I support all the knowledge you provide and all the projects you are working on.

Great work, Ed, as always …

A hug

Thank you for sharing your process and for reporting on the situation in Italy.

I wonder how you and your friends feel about it.

Feb 19, 2014

Trading Books

Mr Ed,

Besides the philosophical, emotional and mental information need to trade, what technical trading books or any format of information could you recommend me for beginners.

Appreciate your sincere answer

Thank you for raising this issue.

You can find some of my personal favorites at Resources, above, or more directly at:

Feb 19, 2014

Turkish Tweet


Örneğin bu kabiledeki traderlar uzun vadeli
traderlardır-----> @TradingTribe Bizde trader denince günlükçü anlaşılıyor bu yanlış.

Yes, I prefer long-term trading to day-trading.

Feb 19, 2014

Wants More Duckweed

I bought the book a couple of weeks ago and very much appreciate it.
Adaptation vs. hope (ostrich). I choose adapt and accept what I can't
control. Smile and appreciate the time and life I have.....even if
surrounded by duckweed

I would like to buy 5 more copies, would I be able to pick them up
somewhere? I'm in Austin every couple of weeks and will be there

Thank you

Thank you for sharing your process and for helping to spread the word.

Feb 19, 2014


Dear Ed,

I notice that since beginning to read and write to FAQ, my awareness of the language I use increases greatly.

For example, your emphasis on SVOp-b leads me to use language differently and listen to others differently. Even writing this brief note creates yet another opportunity to pay attention to what I actually say.

Thank you for sharing your process.

Feb 19, 2014


Hi Ed,

Ed Says: 'I wonder how you feel about implosion'

Wonderment is usually associated with childhood and many times lost due to the perceived ravages of life experience. It is a very important ingredient of creativity and freedom and is best recaptured if lost.

The end of trend we discuss has no feeling component and is an objective phenomenon. Emotion has no place in objective observation and would likely interfere with rational judgment. Of course this would be a sad event for any direct participants or those with a vested interest.

I do feel such a shift will lead to an unimaginable burst of creativity and innovation once the GOVernor is disengaged.

I also feel you have a good heart and help many who may have been injured along the way. You have my admiration.

A couple happy melons for you.

Happy with Melons

Thank you for sharing your views.

I wonder if you can send me the source for your photo so I can properly acknowledge it.

Feb 19, 2014

Govopoly Models Run on Apple

Dear Ed,

I read the paragraph on your website to “Lower Java Security Settings” and upon doing this the application for the “Assimilation Model” loads fine.

To change the security settings for Java on Mac:
1) select “System Preferences” from dock at bottom of screen
2) select “Java”
3) select “Security” tab
4) change to medium

Then relaunch Firefox. I receive the security warning when I attempt to run the program although it then loads fine.


Thank you for sending your method.

It now appears in the tech support section en route to the models.

Feb 18, 2014

New Highs

Chief Seykota,

The Govopoly of Cannabis, see previous. . . , feels comfortable, an odd personal reaction. I feel future Government handouts of Cannabinoids to pharmaceutical companies is a positive integration, "grease the skids" of commerce.

The NCIA, is a resource.

Cannabis laws changes present job growth, prosperity, and returns for investors. We are on a balanced level with the Big Boys. Historic. Think.

Cannabis is legal 3900 years. Paper, cotton, chemical, pharma interests create a false "reefer madness." 1937, Cannabis made illegal and "Immigration problem" solved. This was the big lie sold during depression. Hispanic immigrants enjoyed their Marijuana. Hasta la Mexico amigos!

I invest, dig deep and do serious research before changes occur. It feels good. My system led me to this industry. I manage and own Cannabis sector stock portfolio's for clients. I follow my system. Model Account: $55K in June 2011, $40,700 year end 2012, $96,856 year end 2013.

My model portfolio is currently $136,297, up 40.72% ytd. The 90 day restriction tweaked the patience factor. No more swinging, but I am a tape reader, old school. I do take profits for risk management. Buying back at new highs. I pyramid like the pyramid on a dollar bill. A proper change.

Profits and cash raised from losses transmute into my "new high" funds. If I could write my system's code I would. I am a chartist, sharpening his #2 pencils, red for limit moves, calculating MA's, careful with my coffee. Coffee, I possess a fundamental thesis involving Coffee supplies. Executive Summary: Uruguay. The Charts will tell. .

Ed, You are the best. Thank you for everything.

Thank you for sharing your process.

Feb 18, 2014



I checked Coffee futures after my e-mail to FAQ. It feels good, and bad. I do not trade futures. I notice my right thumb press under right eye recently. This form is a combo: geesh what an idiot, and AHA planning. Now, it is never to late, an ETF should work.

My trading has improved. My model account received the dreaded 90 day restriction. It just ended. I had to wait for trades to settle before buying. This enforced me to hold winners and sell losers on a three day horizon. I feel guilt taking profits at times if holding even small loses. I am loss obsessed. The restriction worked.

Thank you for sharing your process.

Feb 18, 2014


Chief Ed,

Please use the attached Trading Tribe Information Document (TTID) Word document for the San Francisco Tribe. It now shows the current leader and email address. Thank you.

Thank you for the update.

Feb 18, 2014

Coffee and Sugar


Sugar's move of 1972-73 heralded my career's beginning. I charted by hand. The Coffee chart brings hope of a similar move. I Hope my system takes advantage of the move. I feel exhilaration that if the move is lower, perfect, higher, great. No ego investment following your own system. How oxymoronic? My trading works. I feel happy. . .

Thank you for sharing your process.

Feb 18, 2013

Hard Time Understanding


I have read some of your info on trading and I have downloaded some of your info on line about the Average Crossover System. I am having A hard time understanding it and wanted to see if someone could email me back. I am really interested in this. Thanks for your time.

Thank you for sharing your process.

You might consider taking you feelings about <understanding> to Tribe.

Feb 18, 2014

Trend Definition

Hi Ed, and belated happy New Year!

Wishing you success for 2014.

Tough start for us so far, very happy to finish 2013 up 12%.

Please find attached contribution for the 'Trend Definition' section of the project.

I hope you find this paper user-friendly, reflecting your suggestions kindly offered below.

Happy to redraft previous work, and progress with some thoughts on the next section 'Testing Platforms'.

Thanks again for the opportunity.

Warm Regards,

Thank you for sending me your paper.

If you would like me to publish it on this site, you might consider re-writing in SVOp-b (Subject, Verb, Object, present tense - eliminate the verb, to be).

Feb 18, 2014

Contacts NYC Group


Thank you ed for the Trading Tribe site and book. I contacted the NYC group. Just ordered Govopoly. Noticed the reference to Sasha Lessin in the book 'peek.' Has Dr. Lessin published anything ? Thank you again.

Thank you for sharing your process.

I recall having a series of discussions with Sasha from 1985 to 1995, mostly concerning his extensive knowledge of therapists, therapeutic techniques and group process. For more about his current interests, you can consult Google.

Feb 18, 2014


Hi Ed,

I have a dream that shakes me last night. The first part of the dream seems pretty "normal." I walk around and I talk to my brother and some other people. The scary part of the dream involves me waiting in line to register at a school (in my waking life I am about to sign a contract for work). In the dream I recognize a girl that I don't know in real life. She waits in line beside me and her boyfriend waits with her.

She hands me a metal contraption and it starts to pierce underneath my belly button. I feel surprised. The metal contraption starts to butcher my vagina (which I have in my dream). I begin to freak out. I feel powerless as the machine butchers my individuality and transforms it into what society deems beautiful.

I spent the day not eating and sleep for most of the day. I worry about making the wrong decision and not being able to get back what I lose. I currently don't have any income.

I would like to hear what you have to say. I didn't show up at work today to sign my papers.

Thanks Ed, I appreciate any insight you can give me. I don't know who else to turn to. The advice my uncle and my mom give me is that this is normal and I need to go through this.

Thank you for sharing your process.

In Tribe, we sometimes use dreams as entry points.

You might consider identifying and expressing your feelings as you assume the identities of each of the elements in your dream: the contract; the girl; the line; the boyfriend; the belly button; the metal contraption; the vagina; the society; something beautiful; etc.

If and when something activates for you, your Tribe can help you develop the form and move you into process.

Metal on Flesh

typically associates with
strong feelings.

Feb 18, 2013

Feelings of Portfolio Heat

Hi Chief,

I see my account are almost all long positions, 9 longs and 1 short, and there are few more long candidates. I am feeling heat. I feel something grabbing my stomach when I think of committing to adding more long orders. I hope I can find some short trades to hedge and I can't see one. I am sweating. I feel commitment is a claw scratching deep on the back of stomach lining.

I host another meet up last Saturday and talk to 3 more guys. I am coordinating among old and new members and we might start another season of local tribe meetings soon.


Thank you for sharing your process.

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

The Feeling of Winning
may show up in various ways.

If you can experience it
and see its positive intention
you might not have to
jump your system
to make it go away.

Feb 17, 2014

Freedom Index


I notice that the United States is ranked #12 on one Freedom Index and #46 on another. I believe the #12 ranking is for “business” freedom and the #46 for “press freedom”, even though freedom of speech is the 1st Amendment to our Constitution. I believe that if the freedoms in the 2nd Amendment are taken away, our “press freedom” might fall even lower.

Thank you for sharing this data.

I wonder how you feel about it.

Feb 16, 2014

AWS as a Tool

Chief Ed,

I wonder if you find this article interesting. It is about building things with tools.

As such we are seeing emerging "AWS like" stacks that support the creation of new businesses in other areas and ways, but represent the same type of profound change in freeing up the creativity of people to build.


Thank you for the link and for sharing your insights.

Feb 16, 2014



I drew some cool letters.

Just missing a Y!

Thank you for your serendipitous assemblage.

I, by the miracle of after-the-fact coincidence, just happen to have a new drug in the works.

Not For Y's Guys

Feb 16, 2004

More Tweets

Imagine if we tested for willingness, always asked each other for permission to proceed, etc. I want to live in that world /cc @TradingTribe

Let's go there: The Intimacy-Centric model… /cc @TradingTribe

There's a believable person in Austin & he's issuing a protective warning. It's in his new book: /cc @TradingTribe

Feb 16, 2014

Tool Making

Chief Ed,

I am greatly enjoying the GOVOPOLY book.

I want to know more about examples of Govopoly beyond the history of the USA; I wonder if you know of examples.

The section on Tools (starting about page 64) is really interesting to me. I wonder if you are familiar with the book UNDERSTANDING MEDIA: The Extensions of Man by Marshall McLuhan.

If not, then: I think you might enjoy it. He writes a lot about tools and refers to 'tools' as 'media'. That is the language he uses. It is a very interesting book. It is amazing. A related link is here:

Thanks again, and
With kind regards,

Thank you for your support and for sharing your insights.

As far as I can tell, the Assimilation model pertains to most all societies.

Feb 16, 2014

Seeks Guidance

Hi Ed,

I started Back testing some strategies ( Crossovers) for Indian markets . In one phase it makes money and in the next phase whole thing gets vanished. Looking for some guidance on system trading.

Thank you for sharing your process.

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

Feb 15, 2014

Could Not Put It Down


Just finished your book. Could not put it down. Well written and easy to understand while being most informative. Excellent - 5 stars!!


Thank you for your support.

Feb 14, 2014

Disables the Firewall

Hey Ed,

I was able to get your applets to work on Windows 7 by disabling my firewall. Not ideal. Let me know if that doesn’t work for you.

All the best,

Thank you for the workaround.

I do not recommend disabling firewalls.

I now have directions on for enabling Java for Windows 7 and also for Windows 8 - through the Java Control Panel.

Feb 14, 2014

Systems Software

Hi -

looking for a review of systems software. Have seen references to Mechanica Software and TradingBlox. Any others that I should look at ? Especially interested in any portfolio system software that could be called from an existing application developed at the firm where I work. Thank you.

Thank you for raising this issue.

FAQ does not tell people what they should do.

FAQ does not recommend for or against commercial products.

I do not know your application or firm.

Feb 14, 2014

Let It Go


Thank you for the link.

Feb 14, 2014

Tribe Moves from NJ to MA

Dear Ed,

Please remove the Florham Park, NJ tribe, and add the Boston, MA tribe to your directory.

Thank you for sharing your thoughts on finding new investors that fit well.



Boston, Massachusetts !

Feb 14, 2014

Recent Tweets


Your real operating system that feeling you are unwilling to experience. /cc @TradingTribe…

Good example of great boundary management: The @TradingTribe Ground Rules.…

FAQ doesnt tell people what they should do, or make up reasons for things, or judge right or wrong, or answer "why" questions @TradingTribe

How to notice important things...before they become important… /cc @TradingTribe

"It's the economy. Something just ain't right..." explained /cc @TradingTribe

Thank you for your support.

Feb 13, 2014

Trend Following and Trading Robots


Got the [Govopoly] book today! Have read chapters on Trend Following and Trading Robots. Good stuff! Nice book, well done!


Thank you for your support.

Feb 13, 2014

US Health and Human Services Holds Patent on Marijuana


Our Govopoly system's premeditated "holding". True Hypocrisy. Ride the wave.

Thank you for the link.

I wonder how you feel about this.

Feb 13, 2014

San Francisco Tribe Gets New Leader

Chief Ed,

Congratulations on publishing Govopoly.

We have a new SF TT leader as I'm taking a sabbatical from the TT to attend to family, work and other commitments. Please see attached Word document with the new contact email address.

Thank you.

Thank you for the notice and for sending a new TTID for the directory page.
Feb 13, 2014

Govopoly Review


Great book! You describe the current situation with a clarity and understanding not seen anywhere else. Awesome job.

Thank you for your support.

Feb 13, 2014

Feedback Loops


my reading leads me to feedback loops. Input that results in positive output leads to runaway conditions. Input that results in negative output leads to oscillations.

If one were to keep a running count of higher close (+1) vs lower close (-1) then one might know how far into a runaway condition or how close to an oscillation one is in. What if one were to add running counts of high and low too? Seems like a contraction / expansion condition might be detected too (without specifying a hard coded look back period).

I wonder if you have any ideas on a feedback loop (systems approach) for either a trend filter or a consolidation measure that might identify the state of a system.


Thank you for raising this issue.

You can back test your running-count method to see how it compares with other trend-detection methods.

Identification of feedback loops appears in the model-building process. Feedback models support imagination and help us understand how things work. You might like to see some System Dynamics Feedback Models, including the Bubble Lab at

Trend Following systems generally interpret price action into buy or sell signals. To the extent the buying or selling acts to change the price, you may occasionally have a feedback loop in which buyers motivate price increases that motivate more buying. You can excite this mode in the Bubble Lab.

Feb 13 , 2014

Newbury Tribe Report / Govopoly Insights


good morning.

I hope my email finds you well. I write to update on you on the Newbury Tribe which continues to meet every two weeks.

First a thank you for the TTP Extensions which you post on the FAQ – we find the TTP Extensions document incredibly helpful and a great guide. We jump straight into the Rocks process and the role play takes a little getting used too but everyone soon “gets it”. The member on the hot-seat also comments how closely the role playing resembles his real-world experience with his elderly parents. A few weeks later the hot-seat members resolves the tricky relationship with his elderly parents and we all see a successful Rocks Process in action.

Your timing in posting TTP Extensions could not be better and we plan to continue using The Rocks Process. Were also expanding our TTP toolkit and plan to try Snapshot and other TTP Processes in the coming weeks.

For the last 3 months I also attend the London Tribe as a guest to learn from a more experienced group. Yesterday I attempt to travel into London for the meeting however I abandon my efforts due to severe disruptions to local train services and a malfunction en-route to London with my car. I email the London Tribe Chief to apologise for my “no show”. The Chief suggests I log my feelings around this experience. I now share my feelings below.


I feel a mixture of relief, frustration and disappointment at my Jeep malfunction warning on my way to Tribe this afternoon.

I wonder if the universe transpires to stop my attendance. This thought causes frustration as I make a major effort to attend tonight's meeting. My feelings of frustration lead to feelings of relief when I arrive home and ascertain that a P1022 malfunction code is a faulty throttle sensor. A faulty throttle in bad wet weather conditions is a recipe for disaster and I realise I cut my losses. As I type this entry I smile.

I also notice my feelings are of a low intensity during this episode - I enjoy the fact my feelings are there and that they don't over power me.

24 Hours on and I notice that my intention to explore forgiveness at yesterday’s Tribe meeting in London is still there more strongly than ever. The urge to explore my feelings about forgiveness with my wife are extremely powerful and I believe the cause of much drama in my life. I wonder if the universe and I collude to enable me to miss Tribe and continue drama around my feelings. I am determined to confront these feelings and commit to taking the feelings to Tribe in Newbury this Sunday.


Finally, a big thank you for your new book which I purchase and read a few days ago. I love the quality of the book, the simple layout and the explanations. I agree with most of your assertions. I find myself nodding my head as the “penny drops” when I read and comprehend assimilation. The phrase intentions = results is now much clearer to me and I notice the subtle ways that society’s drama unfolds e.g. blaming UK government agencies for UK floods and demanding the same agencies receive more money / power. In the end we all get what we want including the creation of Govopolies.

Thank you.

Thank you for sharing your process and insights.

Feb 12, 2014

Austin Tribe Application


I hope all is well with you and the worldwide tribe members. Since the Austin tribe ended in the fall I have really enjoyed trying to improve on my life and implement some of the techniques the group has taught me. Overall things are going very well.

The basketball coach from my university says that to get those 3 offensive rebounds a game you need to go hard every possession. I kind of feel the same when it comes to TTP.

To get where I want to in life with my TTP I need to go hard all of the time, Does that mean I am perfect all of the time... no. Does it mean that I have come a really long way on my journey to embrace intimacy and reduce judgment and drama...yes it does.

I have come to realize that true change is a process not a light switch. To me I learn as much from the journey as I do from my Tribe meetings. I find the time off from Tribe as a great opportunity to frame issues and think about how to deal with them. Being on my own without the crutch of the group has been a nice change of pace. I feel much more prepared to contribute to the group once it starts up again. I also have some new things to work on.

I have developed a few potential traps that I wish to address. One is to work on trying not to judge those who go through life trying to control others. I feel that my desire to not be controlled gets me away from TTP principles because I am explicitly or implicitly judging those who embrace the control model. I am working aware of this and am working on it but find that I need to be more accepting of others who live in the control world. Sometimes I feel lonely because the control model is so pervasive.

I have felt more uplifted and happy though overall because I have done a good a good job not controlling others. Feelings of anxiety are much less. Feelings of warmth or even love are much stronger.

My commitments are coming along and I look forward to seeing the group and sharing my progress.

Kind Regards

Thank you for applying.
Feb 12, 2014


Hi Ed,

Good luck with your book, it taps into a very long trend.

GOV rise and fall has been a very long recurring cycle dating back thousands of years, I would expect a cycle of power and control to work to the extreme because that is human nature.

It is true that innovation and creativity is inversely correlated to the rise of GOV. Of course the extreme will eventually implode as participants feel more and more exiled. Tough to call the end of this trend so just pay attention along the way and watch for the breaks. Been a few lately.

A couple of melons for you.
Thank you for sharing your insights and photo.

I wonder how you feel about implosion.

Feb 12, 2014

Dining Alone


You may like this:

Thank you for sharing the link.

Yes, many fine restaurants still decorate the table with flowers and candles.

Feb 11, 2014

Marines in the Now

Dear Ed,

I want to share this article with you and FAQ readers since it describes another way that living in the moment of now is so important.

As I read it, I feel a chill along my spine and a stab of fear when I imagine the experience of wartime combat.

I also feel compassion for our brothers and sisters who come home from combat to a world full of people who do not live in the now and who have trouble receiving intense feelings from others.

As one vet describes it, "We come home to paying bills and going to couples' therapy!"

Thank you for sharing your process.

I wonder how you feel about sending Marines into battle.

The Crack of a Rifle

and the sound of a body crumpling.

Feb 11, 2014


Hi Ed, enjoyed listening to your talk with Covel and looking forward to reading the book.

I am thinking about "back-testing". It's something I've done extensively to quantify what works from what doesn't and to discover how markets interact, but the more I did it, and walked through time, the more I recognize it's limits. Given your vast experience on the subject, I am curious of your thoughts on this.

Over the past few years I've noticed more and more back tested systems / models being used by advisory firms. I am curious, from your perspective, what you think about the difference between an investor investing in a program based on back-tested results vs. actual results.

And, I don't know of anyone who uses trading systems (that are back tested) who has used the same system for a decade or more. Instead, the systems have been revised to evolve over time. In other words, if an advisory firm is selling investors a back tested model portfolio, it seems highly unlikely that back tested model will be running (as it was tested) a decade from now. So, it seems showing an investor back-tested performance may be showing them something that is unlikely to operating a decade from now, because it may be revised over time to "adapt" to things. No?

What are your thoughts on the topic?

Thank you for raising this issue.

Systems that optimize over recent small-range back-and-forth markets may miss opportunities in major trending markets.

As Back-Testing Evolves

so do the backs and the tests.

Feb 11, 2014

Whining / Sharing

Dear Ed,

Our conversation today shifted to other issues and I ended up "whining with sophistication".

I prefer to tell you that I was in Paris with my children and my girlfriend, that we had loads of fun, that I enjoyed each minute, the communication with them, their love, their questions, their opinion about a lot of things. Each weekend I go out with my children and discover new venues and places where we have fun. We plan a trip to Argentina, to visit my family there. All this was unthinkable one year ago ...

Best regards,

Thank you for sharing your process.


generally position themselves
to justify their whining.

Feb 11, 2014

Heat Testing

Hi Ed,

One thing i forgot to mention. The back testing software, I used until now, didn't allow me to test for dynamic open risk. I thus defined 0.75% risk per trade and limited the number of open positions to 10 to simulate the idea of max. open Heat at 7.5%. No more trades could be taken if the max. of 10 positions was reached. It is not exactly what I wanted, but I convinced myself that, in general, breakout systems work in the markets that I trade.

I recently purchased Mechanica, where I'm able to get more accurate results for different risk management rules, namely open dynamic risk. Also, as traders can’t yet short VN stocks and the correlation among sectors is usually high, I will also test for max. Heat per each sector to mitigate sector specific risk.

For my live trading, however, I do use the concept of max open risk already and track my portfolio in Excel, so I can see what the heat of the portfolio is every day. If Heat overshoots the limit, I then reduce positions across the board down to below 7.5%. Regarding sector Heat, I just limit the max. number of positions in each sector to 2.

I’m curious how the new tests with Mechanica will look like, compared to my first tests with TradeSim.


Thank you for sharing your process.

In a run-away bull market, you may find heat and open risk both overshoot your limits.

Reducing winning positions during a trend goes against basic trend-following methodology.

You might consider taking your feelings about <sticking with trends> and <getting big winners> to Tribe.
Feb 11, 2014


Dear Ed,

on your page:

you link twice to the Hyperinflation Special Report 2011. I guess the second link, where you write “Hyperinflation Special Report (2012)” should point to

Thank you for your book "Govopoly in the 39th Day"!


Nice Catch !

The link now stands as you recommend.

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