The Trading Tribe (c) Ed Seykota 2003-2016 - Write for permission to reprint.

 Ed Seykota's FAQ

TT_Chartbook

Contributors Say Ed Says
Apr 30, 2017

Strength as a System

Hi Ed:

May my note find you both happy and well.

On 10/9/16 you replied to me as follows:

"Thank you for raising this issue.

You can normalize the strength of an instrument for volatility by dividing its strength by an index of its volatility.

For example, one measure of strength,
R = A25  - A125.
S = (A25 - A125) / A125.

A25: 25-day average (\$)
A125: 125-day average (\$)
R: The Reach (\$)
(amount by which A25 exceeds A125)
S: Strength, Reach as a fraction of A125

Similarly, you can also compute the volatility fraction,
V = ATR(25) / A125: Price-Normal 25-day average true range. (fraction)

VNS = S / V (fraction).

Since both S and V have A125 in the denominator, you can simplify the math:

VNS = (A25 - A125) / ATR(25) (fraction).

In English, the Volatility-Normal Strength equals the Reach / Volatility.

You can compute VNS for all your instruments and then rank them by VNS.

Of course, following this example, you can use other formulations as you wish."

- - - - -

In seeking to understand VNS, I have coded it into both indicator and strategy form. I do have software that allows me to use VNS to "rank" the U.S. Traded Electronic Futures and back-test on portfolios of same. I am using the daily time frame.

I see VNS Values within the +3 to -3 range and have been focusing on the upper range for long trades.

My notes from our meeting in P.R. indicate as part of the "plan" to find the strong stuff.  That being said, this process has not proved fruitful nor does extensive back testing indicate that going long high VNS and selling weak VNS seem to be viable.  Thus, I feel I have misinterpreted your thoughts as to VNS. Any further guidance as to interpreting VNS Values would be more than appreciated. I wonder if VNS can be a proxy for Volatility and lower values may become long trade considerations.

Thank you for raising this issue.

Your question from October asks how to rank stocks according to volatility-normal strength.

My reply describes one approach to creating such a ranking.

I do not claim that you can use such a list, by itself, as a trading system; it may play a role in dynamic portfolio selection.

You might then apply other system methods to the selectd list members to guide entries, exits and position sizing.

You might also notice that the ranking of members on, such a list may vary from day to day, so you might also consider how to deal with members as they appear, move around and then disappear from the list.

Apr 27, 2017

Wants to Cross it Off

Hey there,

I’ve been reading a few of your posts, and they’re really good – Your blog is really in depth, and it just so happens to be in the same industry as us. Which is why i've approached you for a guest post. Would you be willing to host a guest post on your website.

We aren’t asking you to build links to a spammy site or product page, just a site that’s in the same industry as yours, to a blog post we’ve invested  hours creating.

Thanks

(then, later)

I've reached out a couple times, but I haven't heard back. I'd appreciate a response to my email below.

(then, still later)

I'm sure you're busy, but if you could respond to my email, I can cross this off my list.
Thank you for showing a commercial interest in FAQ.

I don't accept advertising or consideration in exchange for promoting people or products.

To do so might risk coloring my own natural biases.
Apr 27, 2017

Wants to Attend a Workshop

Hi Sir,

I've read your book on "The Trading Tribe" and it totally blew me away. And I'm wondering if you will be conducting any TTP Workshop? As I would be keen to know more about the TTP Workshop and would like to attend one of such Workshop.

Hope to hear from you soon.

Best Regards,
Thank you for telling me you wish to attend a Workshop.

I feel interest rising and would like to host a Workshop later this year

Watch FAQ for developments.

Apr 27, 2017

Tribal Bonds

Hi Ed,

I lie in bed thinking about Tribal bonds. I wonder if you have any observations on characteristics of strong Tribes.

I remember reading on FAQ that Tribes need to move forward in order to continue.

I wonder if you could share your observations on human connection and Tribal bonds.

Appreciate any thoughts you may want to share,
Thank you for sharing your process.

Apr 24, 2017

Turning 29

Hi Ed,

Sometimes I get this burning feeling in my chest. I wonder what it is.

I'm also wondering if it's too late for me to have the things I want in my life.

To marry [my girl] and start a life together. I'm thinking a lot of anger these days. I'm turning 29 this year and coming to a lot of realizations about my past actions and non actions.

I wonder if you could still help.
Thank you for sharing your process.

You might consider taking your feelings about <what to do> to Tribe.
Apr 24, 2017

Lifta Yoga

Ed,

I send you a photo of my Saturday workout.

Thank you for sharing your process and method for building a position.
Apr 23, 2017

Workshop Request

Ed,

I feel glad that you start updating FAQ again. I feel connected to the writers and to you and I feel grateful.

I wonder if and when you have another Workshop or Breathwork. I'd like to complete a Workshop and explore Breathwork with you.

I'd like to explore my psyche more.
Thank you for raising this issue.

I feel a workshop coming on - likely later this year.
Apr 22, 2017

Analyzing / Judging Feelings

Dear Ed,

Thank you for responding to my "coping with patience" question.

I've learned, through reading your FAQ, that the Trading Tribe process involves encouraging the feelings we have and fully experiencing them.

By doing so we are no longer in resistance to it and, consequently, stop fuelling them, which should cause them to stop.

The problem I face is that consciously acknowledging what I feel and even the reason why I feel it does little in the way of actually stopping the feeling.

The feeling should not be present as rationally and empirically I know what I'm doing is right (or wrong, depending on the situation), but the feeling is still present.

Am I missing or overlooking a step in the process?

Many thanks for this public service you provide.

Regards,
Thank you for sharing your process and for raising these issues.

"Should cause them to stop" indicates a desire to get rid of them.

"Why I feel it" indicates thinking about feelings rather than experiencing them.

"Stopping the feeling" indicates a desire to control the feeling, rather than experience it.

"Should not be present" indicates a judgment about the feeling.

"Right (or wrong)" indicates judgment.

Apr 22, 2017

Letting Go

Hi Ed,

I notice in the recent FAQ you write might might
might could. Is this intentional?

I also enjoy the book Letting Go as it makes me more aware of the feelings. When reading your comments I realize focusing on letting go of the low energy feelings (shame, anger, pride etc) may actually make me forget to realize their positive intentions.

Another thing this book helps me with is to see what may happen to me during a particular day, like when I feel angry I  meet people who intensify this feeling, so I let go of anger so as not to attract angry people. The same goes for fear, pride etc.

I notice the best way to realize which feelings are currently affecting me most is to observe how people around me interact with me.

Additionally, I see that letting go of low energy emotions gets me on the path of right livelihood. I observe this by how people react to me when I've let go of low energy feelings, it's a zen-like state when I feel I have the right emotional setup to interact positively with everybody around me.

Kindest regard
Thank you of sharing your process and insights - and for raising the [might] issue.

Yes, from [intentions = results] we have: all the stuff you see in FAQ, and elsewhere for that matter, results from intentions.

My intention, as of now, eliminates the forms, [might might] and [might could].

Apr 22, 2017

Govopoly

Hi Ed,

Perhaps you’ve listened to this recent interview of Brad Katsuyama, these two or three minutes where he’s talking about regulation reminded me of Govopoly.

Thank you for sending me the m4a file and for noticing his concern with the Govopoly System.

I cannot easily post the audio file to this page so as to play in all browsers; perhaps you can send me a link to the interview.

In the interview he mentions a regulation-crisis spiral as an "unintended consequence" of regulation.

From [Intentions = Results] we can see this spiral, including recursively strengthening the Govopoly System and weakening the Free Competition Sector as a salient intention of regulation.

Recent examples: Uber; Airbnb
Apr 21, 2017

Steps to Success

Dear Mr Seykota,

First I would like to thank you. Your comments in Market Wizard were inspirational and motivational for me to change my life.

I have begun this journey with success and I will continue that way. once I have completed my first step with success, my next will be to have you as my mentor.

I have studied about many market wizards and I am writing to you now so when we meet I can prove to you why I would be worth teaching and why I believe you would be the best mentor for me.

Regards
Thank you for sharing your process and for acknowledging me and the work.

You might consider taking your feelings about <the steps to success> to Tribe as an entry point.
 Some People Enjoy Success at the moment of landing on a higher step, Others enjoy it as an ongoing process, unfolding in the ever-evolving moment of now. http://www.dailymail.co.uk/news/article-1040325/Stair-Crazy- How-80-year-old-man-BANNED-running-department-store- escalator.html

Apr 21, 2017

Positive Intention of Embarrassment

Hello Ed,

I realized I misplace ‘The Essentials’ card that I keep in my wallet and I order a replacement card by following the directions on your website.  I feel my heart beat and notice a slight smile forming each time I open the mailbox in anticipation of seeing an envelope addressed to me in my own handwriting.  As the ever evolving moment of ‘now’ continues, I notice I no longer anticipate seeing my self-addressed envelope but rather I feel disappointment, like there is a small indigestible pit in the bottom of my stomach, each time I notice the empty slot in my wallet which formerly held my card.

What is the positive intention of anticipation?  What is the positive intention of disappointment?

I experience what I believe to be embarrassment as a rush of heat to my cheeks as I pose these questions to you.  I realize I receive a benefit each time I read FAQ but I never send you an acknowledgment. Instead, I send an email which could be interpreted by you as a complaint. The temperature of my cheeks continue to increase, this definitely feels like embarrassment, but rather than delete the email I uncharacteristically decide to experience this feeling and I decide to click the send button.

What is the positive intention of embarrassment?

Ed, Thank you for FAQ.  I support your work here!

Sincerely,

Thank you for sharing your process, for acknowledging me and the work and for raising the issue about your card - and for exemplifying several TTP principles in the process.

You might have a reasonable expectation of receiving your replacement card within a week of requesting it.

As I see by the March 20 postmark on your letter to Puerto Rico (that catches up with me here in Austin yesterday) you now have over a month going without receipt of your card.

You might normally feel anticipation, disappointment and anger about receiving no response, motivating you to write to me and share those feelings.

I might normally feel guilt and embarrassment about failing to deliver, motivating me to write this note to you, to update my website with my current address and to get your card on the way to you today.

Per your original card, you might consider checking if you have any agreements pending; sometimes people, in the process of attending to pending agreements, discover parts of themselves (such as a card) they leave behind as a reminder.  Let me know if, when and where you find it.
Apr 20, 2017

Four Types of Love, Plus One More

Dear Ed,

I enjoyed the hike. Here is the data:

Distance: 3.97 mi.
Duration: 1:37:59
Average pace: 24:39 minutes per mile
Calories burned: 1.1K
Elevation gain: 97 feet
Splits:
1 mile    22:54
2 mile    27:09
3 mile    24:59
4 mile    23:14

Here’s something I put together recently for a social media post on the Four Loves:

There are four words for love in Greek:

—1) eros (physical love, sensual, sexual, fleshly desire to consume the other)

—2) philios (brotherly love, the love between friends united in a common purpose, a mission, like a hunting party, a quilting circle, a reading club, a bridge quartet or a unit of soldiers.)

—3) storge (or affection, like for a pet or someone who makes you feel good to be with often because of the love they exhibit toward you.)

These are the "pagan loves" and have been around and known a long time, into antiquity.
These three are all based on selfish desires because the beloved serves the lover in some way (good feeling, companionship, satisfaction of physical desires, or a desired mission accomplished.)

—4) The fourth Greek word for love was not in usage before the time of Christ and the New Testament: agape. This is the self-less, unconditional, sacrificing-for-the-other love which God has for his greatest creation, his people.
Thank you for sending me the statistics on our hike up Barton Creek - and for sending me your summary of the four types of love.

I know of a fifth type of Love, that comes to English via the French word for egg: namely l'oeuf.

I recall hearing the term often while playing tennis, a game in which I consider myself an expert l'oeuf-er.
Apr 19, 2017

Rather Respected

Hi Ed,

I've been reading some literature by a rather respected system developer, and in this text, he goes on to make the statement that some simple trend following systems no longer work because they are now widely known.

For example, he states that one system only worked very well in the 60s and up until the early 80s because many people then gained access to cheap computation power and therefore took out the inefficiencies that made this system profitable.  To me, it makes sense why various markets go from trending to non-trending states and therefore it makes sense why simple systems with robust rules should be able to capitalize on these trends. Additionally, I believe the author of these statements fails to take into account the various other participants in the marketplace as there are many factors that contribute to prices, not just system traders alone.  I would love to hear your opinion if you have any.

Thank you,

Thank you for raising this issue.

I wonder what you mean by the phrase,"rather respected."

In Tribe, we use SVO-p grammar so we have a Subject, Verb and Object, all in the Present tense; in this format, [Someone] has to respect the developer. Then you can go on to say how the developer happens to command that respect.

The way you have it in your text, some unknown person(s) used to respect this guy.  From what you tell me the developer has to say, it all starts to make sense.

So on to the content. Simple systems always work in the sense that they always do what they do. "No longer work" perhaps means "recently shows less profit."  Again, the breezy description suffers from acute imprecision.

I find the argument about [cheap computation leading to market saturation and less profit] somewhat sketchy and incomplete.

You might like to consider: the exponential growth in the Govopoly system leads to high levels of moral hazard and hence to high price volatility.  Meanwhile, the associating growth in Govopoly-protecting regulations and in central-bank debt puts an upward bias on prices.

Extrapolating, you might expect prices to move higher in a highly volatile manner.  You can find numerous examples of this type of behavior in the equity, debt, FX and commodity markets.

For a teaser / advance view of how this might all turn out, take a look at Venezuela.

For more on this, see my book, Govopoly in the 39th Day, at resources, above.
Apr 19, 2017

Wants to Interview Ed

Hi!

I am a professional trader from 1998. I have lived in New York since 1993. I'm originally from Odessa, Ukraine. I now focus on building a educational program for people from Eastern Europe.

The idea of this project is to introduce our viewers to interesting people who have reached success in business. We want to show the life of these businessmen in business, and outside of business. We want to show how they reached success.

I ask you to help contact Mr. Seykota. I have heard Ed Seykota`s life story, and have decided that he is a eligible for this interview.  I would look to have an interview Ed Seykota in person or over on line communications.

We have a large student base, a large amount of subscribers on YouTube, and a large following on Facebook. We want to show our audience success in order to inspire them. Business in Russia is short lived, and (Name #0) is one of the people who have reached success.

We have interviewed several businessmen. Two of our interviews were with (Name #1), the founder of one of the best wine shops, and (Name #2), the famous business coach of Russia.

I will be happy to see Mr. Seykota as one of our interviewed guests. This project is absolutely free. If you agree to help me, I will send a list of questions to answer on your or Mr. Ed Seykota`s email. I speak in English and Russian fluently, therefore we should have no problems with communication. I look forward to your answer.
Thank you for reaching out to me.

I generally avoid interviews with strangers as they wind up saying more about the interviewer than about the subject.

Recently, I find myself focusing on playing the banjo and on exploring the Mandelbrot set.

You might consider practicing up on "Devil's Dream" on the balalaica - so we can get together for a jam.  In addition, if you can demonstrate some interest in implementing faster algorithms for Mandelbrot magnifications beyond 10^30, we might have a basis for general conversations.

Apr 17, 2017

Working Forever

Hi Ed:

I hope you're doing well.  Please let me know if there is anyway I can assist you.  I love your site & would like to help you make it work forever (ha!)

Sincerely,
Thank you for reaching out to me with your concerns.

I generally concentrate of getting the site working in the moment of now - that I use as a functional proxy for forever.

You might consider taking your feelings about <living forever> to Tribe as an entry point.

You might also consider putting that suggestion aside for a couple hundred years.
Apr 17, 2017

More On Letting Go : Good and Bad Feelings

Ed,

Thank you for your note sharing your thoughts with me.  I am happy to have you as my friend.  I thought you might find Letting Go interesting because I find many connections and much alignment with what I learned at Tribe.

I would like to take the liberty to share some of my reactions to your reactions.  :-)

I find no conflict between the practice of letting go and the ranking of emotions. I find his ranking of emotions to be an exercise in using judgment in the positive sense of taking a range of different and distinct emotions and ranking them on a scale of what works to what doesn't work.

I recognize the referencing something as "negative" can be seen as judgmental, however, my reading of it is that his reference to "negative" emotions is not judgmental in the negative sense but is a descriptor used in a manner similar to the way plus or minus, and positive or negative are used in mathematics.

I searched the book rather thoroughly and found no admonitions for the elimination of emotions.  The sense I got from the book is that he recognizes the value of all emotions, even the ones he characterizes as "negative".  For example, here is what he says about the practice of letting go on pages 19 and 20 (an approach I find to be in alignment with Tribe work):

"Letting go involves being aware of a feeling, letting it come up, staying with it, and letting it run its course without wanting to make it different or do anything about it. It means simply to let the feeling be there and to focus on letting out the energy behind it.

The first step is to allow yourself to have the feeling without resisting it, venting it, fearing it, condemning it, or moralizing about it. It means to drop judgment and to see that it is just a feeling. The technique is to be with the feeling and surrender all efforts to modify it in any way. Let go of wanting to resist the feeling. It is resistance that keeps the feeling going. When you give up resisting or trying to modify the feeling, it will shift to the next feeling and be accompanied by a lighter sensation. A feeling that is not resisted will disappear as the energy behind it dissipates."

Love,
Thank you for following up.

Your citation (Letting go involves ...) seems quite in alignment with Tribe practices.

Ranking feelings in terms of "what feelings work best" still implies good and bad feelings  - and may discourage fully experiencing the "bad" ones.

In Tribe we hold that sharing feelings generally works better than withholding them, regardless of the type of feeling.
Apr 17, 2017

Amsterdam Tribe Moves to Utrecht

Dear Ed,

I wonder if you might consider replacing the Amsterdam Tribe Information with our new TTID, hereby attached.

We now hold our Tribe meetings in Utrecht.

Many thanks,
Thank you for posting your new location.
Apr 17, 2017

Coping with Patience

Hello Ed,

Can you please share your thoughts on how to have / cope with the patience to stay with a position for long periods of time.

Regards,
Thank you for raising this issue.

You might frame patience as (1) a valuable character trait, (2) something with which you have to cope or (3) something else.

The way you hold and respond to your feelings largely determines the results you get in life.

The Trading Tribe Process (TTP) offers an approach to identifying and re-framing basic your basic emotional response patterns - so you can get different results, naturally.

I gather that one of your current patterns involves the drama of having to "cope" with patience, and perhaps also with other forms of authority (such as an overbearing parent - or a strict trading system).

You might consider taking your feelings about <patience> to Tribe as an entry point.
Apr 15, 2017

Moving On

Hi Ed

I hope you are using this mailbox.

I have been doing a lot of research over the past 5 years and now stuck with an analysis that is giving me sleepless nights.

I started with fundamentals where I actually lost money and later moved to research technical analysis.

I started with simple breakout strategies such as 50 day highest high / lowest lows with exit as 20 days in the opposite direction.

SL based on 13 days ATR. To say the least I would at best break even with this strategy.

So I moved on to figure out a way to analyze each market on different time frames, least being a day.

This threw some interesting stats, but wasn’t good. So I moved on to yet another thought process.

Capturing trend reversals and riding the profits.

However, I need another pair of eyes to tell me if this is a valid analysis and can be used as a strategy.

However, I am not sure how should I approach this.

Thank you for sharing your process.

I gather that, after looking at some systems like the HHLL 50/20/13 system you decide to "move on" to something else - such as market-specific parameters - before more thoroughly testing the universe of HHLL possibilities.

You might take your feelings about <sticking to it> and <persistence> to Tribe as entry points.

Those character traits might come in handy during actual trading.

Apr 15, 2017

20x / 50% in 30 days

Hello Ed,

I was reading Market Wizards and found your name stuck out to me a lot in the book so as I was doing research I can across your website.

Im mostly self taught learned from trial and error and other traders, ex-bank traders, trades penny stocks, blue chips, binary options and now I've found and settled with Forex since I've become a Managing partner with (my firm).

I have a growing group of traders and find that my mentoring and coaching has helped them with trader development along the way. I am still working on my trading skill myself but since I've managed to take a demo account from almost \$50,000 to almost \$1M and started a real account with cme markets.

My results have brought me a return of about 50% in less than 30 days however I find perhaps I take trades prematurely rather than wait for them to come to me. I plan on getting your book and I'm confident over timr I will do well as I continuously study and try to correct past mistakes by learning from them, doing meditation, and other activities to improve my focus and clarity.

In terms of building the company up and a Tribe, do you have any suggestions? My trading strategy involves support and resistance, use of 3 emas and fibonnaci and also pivot points on another chart. Is this a viable strategy for the long term? Ive thought about getting into stocks as well but believe and have been told its best to keep the focus smaller instead of larger. I do take the indices, commodity, futures, and bond yield data into consideration as well as economic news releases. At times I like to be in the market when it's not favourable for traders and usually have a drawdown because of that, something im working on now - less trading.

Hope to hear from you.
Thank you for raising this issue.

You might consider running some back-tests to determine how your high-gain system works over a longer term.

I also notice your text contains a number of grammar and spelling errors - indicating a preference for speed over accuracy.

You might also consider taking your feelings about <do it quick> to Tribe as an entry point.

 American rocketry pioneer Robert H. Goddard and his first liquid-fueled rocket, March 16, 1926. Hot Trading Accounts, Like Rockets go up quickly and rarely stay up. https://www.nasa.gov/centers/ goddard/about/history/dr_goddard.html

Apr 14, 2017

Letting Go

Ed,

I am getting so much good out of listening to and reading this book on Letting Go.

Best,

https://www.amazon.com/Letting-
David-Hawkins-M-D-Ph-D/dp/1401945015

Thank you for reaching out to me, and for sharing your recent reading with me.

I wonder how to square Hawkins' theoretical bias toward "total acceptance," (as in accepting, letting go of and joyously seeing the positive) with his ranking emotions (scale of feelings) on page 29.

In particular, on page 32, he seems to characterize [Shame] as a negative emotion -
one that, by implication, we might do well to eliminate.

Perhaps, a shameless approach to life might work well for some kinds of people, say, those who practice various forms of deception and transgression.

I get the sense that you do not, actually, live shamelessly; rather, I sense that you have a rather keen sense of ethics and abide by the law - and by local customs as well.

I wonder if Hawkins fully accepts, the principle that all emotions (including shame) have positive intentions - and that those who would make judgments about emotions, and rank them,  and try to eliminate the "negative ones"
do so at the risk of missing out on their positive intentions.

Eliminate thirst ==> dehydration.
Eliminate hunger ==> starvation
Eliminate shame ==> low ethics
Eliminate greed ==> poverty
Eliminate anger ==> boundary violation
Eliminate jealousy ==> wandering mate

Let me know if you sense I could use further enlightenment on this topic.
Apr 13, 2017

Bubble or Babble

Ed,

Charts can deceive us. The same market displayed on different scales can distort our opinion on whether the trend is up or down and how strong the trend is [depending on]  linear and logarithmic scales.

The linear S&P chart below looks and feels like a bubble. We see the parabolic nature of the uptrend and think “I’ve seen this pattern before (in 2008 Crude Oil, 2011 Cotton, 2000 NASDAQ and others)”.

In linear-scale charts, early data cannot tell it’s story. From 1900-1980, we cannot get any feel for the ups and downs. To get the real story, you have to calculate the hard numbers; doing this, you discover the -80% loss in the Great Depression; the -46% drawdown from 2000-2003; the -52% loss from 2007-2009.

Losses that make you sick do not market very well on linear scale charts. (On log scale charts) they look like slight setbacks in an otherwise perpetual uptrend.

Today, some people might look at this and think “the bubble is going to burst soon”. And hey maybe stock prices will roll over at some point, but let’s see if you change your mind when looking at the same price series on a logarithmic scale.

 S&P 500 Index - Linear scale S&P 500 Index - Log scale The Same Chart on two different scales. www.melissinostrading.com

Thank you for raising this issue.

In my book, Govopoly in the 39th Day, I emphasize the importance of viewing dynamics from both the linear and exponential (logarithmic) reference frames.

People generally register surprise as they gain "sudden" awareness of exponential processes as they rapidly cross over the urgent, formidable and no-room-to react points.

Recently evolving examples of urgent exponential situations include central-bank debt and Govopoly-protecting regulations.
Apr 12, 2017

Capitalization

Ed,

Thank you on your insight of the trends in the market and have found your response to be quite useful.

When trading and taking a loss, I never take it personally and chase after returns of my lost funds. I think this is a mindset that has kept me in the game with a small account.

As a college student with a small account I often find it difficult to trade because most trades require me to place a stop that would potentially yield a larger of a lost that I would be comfortable with.

As for the forex market, I have read that it is much more realistic to trade small capital accounts in the forex market. What are your views on this?

Thank You,
Thank you for raising this issue.

Questions about trading smaller contracts generally stem from a deeper issue: namely, under captialization.

Restricting your trading to forex-only instruments precludes opportunities to enjoy trends in, say, equities, bonds, livestock, etc.

You might consider postponing trading until you can afford to implement diversification.

You might also consider developing and back testing a system and then marketing it.

Otherwise, you might as well try to compete with WalMart by opening a shop in your garage and stocking only items that sell for less than fifty cents.

You might consider taking your feelings about <quick and easy money> to Tribe as an entry point.
April 12, 2017

Wants to See the Trend

Ed,

Through your response I see that "knowing how everything effects the market" is quite a difficult way to view the markets and something that is near impossible.

But currently I am trading with a method that involves trend following. Would it be a possibilities for you to give me a few tips and pointers on how I can improve my ability to see trends.

I am also struggling with a problem that I hope you can help me on as well. When I enter into a position often times it will come down, hit my stop, then go the direction I anticipated. But often times it will hit my stop and not go any further down or up from that point, and go the direction I anticipated. Do you know how I may be able to solve this situation?

Thank You,
Thank you for raising these issues.

You might consider the notion that a chart does not have a trend until you give it one.  You might give it a 6-month trend or a 2-week trend. The trend comes from you, not from the chart.

You can get some experience with trends by trying out different trend definitions in the context of a trading system, and then back testing to determine theoretical profitability.

This exercise generally dissuades people from employing short-term systems.

Per your situation with whipsaws, you might consider reviewing The Whipsaw Song:

Also, you might consider taking your feelings about <taking losses> to Tribe as an entry point.
April 11, 2017

OK

Ed,

Are you ok?

Kind Regards
Thank you for checking in on me.
Apr 11, 2017

Needy

Hi Ed,

Please help free me from this bondage. I feel random crying and my heart starts opening up and I start to feel love and acceptance then I get scared seeing so many people in bondage and the heart closes back up.

Thank you for reaching out to me.

You might consider taking your feelings about <bondage>, <acceptance> and <neediness> to Tribe as entry points.
Apr 11, 2017

Clarifies Goals

Hello Ed,

I wanted to thank you for your response and would like to take the opportunity to write back to you in regards to your response.

Currently as a trader who is new to the business and trying to make it in the business, my short term goals are to really learn as much about the markets as I can in order to better understand how everything eventually effects the movement of the markets.

After learning all that I can, I will work hard to turn this into a career that will help not only me but those who I may cross paths with.

However I do have much more goals I want to accomplish in the long run that would require a little more work. Helping people is something I have always found so much joy in and would love to create a future where I am able to help and educate people to make smart financial choices with their savings.

I grew up in a lower middle class family that really didn't have the financial knowledge that would help us grow our wealth and this is the case for many families that I have seen.

I would like to use my knowledge to be able to educate these families on what they need to know in order to obtain their future goals. Seeing what you have created at Trading Tribe is truly inspiring and worth admiring, you have created a community that allows people to really open up and ask questions without feeling any sense of shame or judgment.

I think this is something that is very meaningful because sometimes people just need a non-bias second opinion. I have studied the teachings of Buddhism for a few years now and have learned many things that has changed my views in life and would eventually like to share my thoughts on problems people may be facing in their life.

Best Regards,
Thank you for clarifying your goals.

I do not know anyone who understands how everything eventually affects the movement of the markets.

I know a number of people who, knowing only the current trend, do pretty well.

You might consider taking your feelings about <having to figure everything out> to Tribe as an entry point.

Apr 11, 1017

Winner

Ed,

I'd like to share my daughter's award-winning artwork.

Thank you for sending me the piece.
Apr 10, 2017

More on Fractals

Ed,

Thanks for the interesting reply on FAQ, and for the pointer to the reply. I considered your answer might be found there, but I had not yet looked. I have not been able to cause the 3D image to form in my mind yet but will keep trying.

Using the Mandelbrot set tool on Wolfram Alpha app I am not able to get nearly as deep into that point:

http://www.wolframalpha.com/
input/?i=mandelbrot%20set

I can zoom in one more step from that shown in the screen shot below and that is all. And no colors!

Cheers,

Thank you for sharing your experiences with fractal zooming.

On-line apps likely cannot take you very far; for serious diving, you might have to create your own software.

My software uses the MS 128-bit decimal class that can carry about 28-29 significant digits on a PC.  So I can zoom to around 10^25.

I can get a 500x500-pixel, low-zoom solution in a couple minutes.

A deep zoom might take a couple days to render, particularly if it contains one or more of the cartoid shapes and if I wish wish to get crisp boundaries.

See: http://www.seykota.com/fractals

One diver manages to get to a zoom level of around 10^10000.  For reference, the ratio of the length of the universe to the Planck length comes to "only" about 10^60.

To see some deep dives go to:

watch?v=ModQ59muXmU

http://kottke.org/10/02/
insanely-deep-fractal-zoom

watch?v=0<!-- Picture Box

Apr 10, 2017

More On Mean Reversion

Hi Chief,

I’m glad to see that you are back on line.

I just have a local Tribe meeting last Friday. We practice intimacy model in various business scenarios.  I’m looking for ways to ramp up my trainings.

I like your comment on the Mar 15, 2017 Mean Reversion. Yes we live on a fat tail.

It reminds me of a conversation between me and my friend last year. He is physics major. He explains to me what dark matter is.

It appears to me that scientist can’t explain why the universe are expanding in an accelerating pace, instead of slowing down and starts to reverse to the mean.

The scientists have to create a theory of invisible mass as the missing link to keep the belief system whole, or to keep the minds reverse to the comfortable mean. The mean of which everything makes sense.  I appreciate the beauty of trend following. It’s the unstable state which is always stable.

Thanks,
Thank you for sharing your insights.
Apr 10, 2017

Training

Dear Ed,

Are you still conducting some training for aspiring traders?

Regards
Thank you for raising this issue.

I conduct a sort of training through this site.

Occasionally, in response to demand I host a Workshop or a Tribe meeting series.
Apr 10, 2017

Good Afternoon Ed,

I notice that you have not updated your site in a few months. I wonder if you are well? I reach out since I am a bit concerned and want to check on you.

Well Wishes,

Thank you for checking in on me.

Apr 10, 2017

London Tribe Report

Dear Ed,

The City of London Tribe added another two members yesterday. We now have ten.

So far this year, I've noticed a significant deterioration in my mental health. I seem to be miserable most of the time, get into arguments with others frequently and my relationship with my girlfriend has deteriorated.

The only significant change in my life this year has been moving house. I am beginning to wonder if this change in mentality is a by product of TTP. I've spent many a time this year asking myself 'What is going on with my mental health?'. I haven't been able to understand it.

I take these issues to the hot-seat. I experience feelings on very deep level. I notice that I get better at experiencing feelings with each TTP process.

I notice that I want to cry but I just can't do it. I almost get there but can't cry. I feel frustration. This eventually turns to rage which I feel and enjoy very much. This is the first time I enjoy rage.

The process manager takes me back to my feelings around wanting to cry. I find I don't want to because I am embarrassed of crying in front of men.

I am encouraged to feel this embarrassment. I recall vague memories in childhood where I suppress 'wanting to cry'. I feel this 'suppressing crying' feeling. I find that I enjoy it and I laugh because it is doing a good job at stopping me from crying which is what I want it to do.

I stop here, I think that crying is a good thing, but my body disagrees. I am unwilling to continue with the process.

I notice that you haven't updated your website in a while. I hope that everything is well with you. As I mentioned in a previous email, I am very keen to participate in one of your Tribe meetings or a workshop if available.

Thanks

I post my meetings and Workshops to FAQ; nothing pending in this moment.

Your Process Manager demonstrates skill with tracking you wherever you go, validating you, encouraging you and ending the process through willingness testing.

Suppressing the direct expression of feelings, such as sadness, can motivate them to appear as other symptoms, such staging disagreements with others.

 The Cry that doesn't quite come all the way out. can emerge later as, say, an argument. http://www.themodernman.com/relationship/ is-it-okay-for-men-to-cry.html
Apr 9, 2017

Fractal Diving

Ed,

This zoom-in is amazing. What I want to know now is how you decided on that point to zoom into which proved to be so interesting and beautiful all the way in.

Brute force trial and error?

Or was there some mathematical beauty to the initial parameters which was also reflected in the result in visual beauty? Eg. like using pi or e or phi, other constants?

Taking a hint from the URL, is the point you zoom in on zero?

http://www.seykota.com/fractals

Thank you for expressing an interest in my fractal work.

The collection at .../fractals shows some of my recent explorations into the Mandelbrot Set.

The first image, Zooming In, animates a fractal dive near the "Tip" at {-2, 0}.

I locate this "point of interest" by starting with an overall view and then recursively expanding into smaller and smaller areas.

In this case, I don't find anything to view at the "infinitely small" point at {-2, 0}.  To get an image, I have to look slightly to the right. See below.

Once I have a point of interest, the software can automatically generate the animation.

Note, in the [V = V^2 + C] loop,  I use the
C# decimal class; floats and doubles, although somewhat faster in computations, do not offer as much precision.

The second image, Dynamic Coloration, animates various methods of painting one image.

The third image, 3D, illustrates an attempt to create the illusion of depth.  You can get the 3D effect by using a virtual reality headset - or by viewing the image on your monitor in such a way as to bring the two images into convergence by crossing your eyes slightly.
 Detail Near the Tip X,Y: {-1.9999964703417403103612285083, 0.00} Width: 0.0000000000000000005569385519
Apr 5, 2017

Check-In

Dear Ed,

I wonder if everything is well with you. I see that there are no posts on FAQ after January. I hope to hear from you soon and wish to see FAQ up and running.

Thank you
Thank you for checking in on me.
Apr 4, 2017

Check-In

Hi Ed,

I haven't seen any activity on your site in a while, and I just wanted to say that I hope everything is going well.
Thank you for checking in on me.
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