© Ed Seykota, 2003 - 2004 ... Write for permission to reprint.

Ed Seykota's

Frequently Asked Questions

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October 1- 10, 2004

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(Quotes from Ed in Red)


Sun, 10 Oct 2004


Chicago Tribe


Dear Ed,

I am interested in joining a tribe in Chicago. I did not see one in the directory. I would, therefore, like to start one in Chicago. How do I do this?



Check the directory again to see a listing for a new Tribe in Chicago.





Clip: http://www.musc.edu/cando/


Sun, 10 Oct 2004

Simple Rules


You've stated several times that when it comes to rules that define a trend following system you prefer simpler rules to more complex rules. Why do you prefer this?

You've stated several times that long term trend following systems have the advantage of lower transaction costs over shorter term systems. Do you feel there are other advantages of longer term over short term trend following systems? If so, what are they?

FAQ does not answer "why" questions - see Ground Rules.


Very short term systems tend to succumb to transaction costs.


You can find specific systems that you prefer or that you feel have an advantage for you by conducting your own historical tests. 

Sun, 10 Oct 2004


Dear Ed,

Thank you for enriching our lives with your wisdom and inspiration. With each passing day I find myself enjoying my life, with a quiet confidence and positive thoughts.

Your teachings have been very useful, particularly in difficult times, when I sought the light from a role model.

I cannot express in words the gratitude I feel, and I am sure many in the tribe feel the same way.


You are welcome.

Sat, 9 Oct 2004

Research Paper

Thank you very much for such an enjoyable consultation and conversation. I could still hear the same excitement in your voice and the love you have for the markets and for sharing your knowledge that I experienced when I visited you.

Consider me for your group. I would love to look into that possibility further. After you read this research paper I would like to have a follow-up call ... to discuss it, and how it relates to something we discussed. Thank you again so very much.


Fri, 8 Oct 2004

Documentation of Hot Seat Experience

Chief Tahoe,

Attached is the documentation of my second hot seat experience (as a sender). A bit too long, but well detailed. Thought it might be helpful to interested beginners.

... I am talking to a couple of trader-hopefuls in my neck of the woods about starting a tribe here. Do we have your approval to do that without any of us attending the workshop?

I want to thank you for [allowing me to attend the IV Tribe] over the past three - four months. The six meetings I have attended at the IV TT have made a big difference. As I said in my last check-in, I've never felt like a trader as I do now ...


My Second Hot Seat as a Sender

The set-up:

5:00PM, Thursday afternoon. I am driving around Lake Tahoe on my way to the IV TT meeting. The drive from the San Francisco Bay Area to Incline Village, through the majestic Sierra Nevada Mountains, is an enjoyable and productive experience. I usually use this time to reflect on the events and lessons of the last two weeks.

But today is different. Today I am anxious and uneasy. I am straining, I am wrestling with myself. I am not going with the flow, I am not riding the trend.

I haven’t traded for almost three months. And I am not trading until I learn how to lose gracefully, dispassionately. I am a bitter and a lousy loser, and my bad losing habits have cost me dearly in the markets. I want to work tonight and I want a balanced hot seat: A little bit of logic for me and a little bit of feelings for Fred. Maybe we can limit the somatics to the good forms - the happy ones, the great high, the great peace – and skip the painful forms – the stomach aches, the headaches, the neck pains, and those hard feelings that shake you at the core of your soul. Everyone gets their outlet this way, everyone is happy, and I overcome my loss-taking difficulty.

I reach for Fred, but he does not respond. “Fred, Freddy, Buddy, Fredo, Alfredo, Frededido …” No matter how I endear myself to him, he does not show. I tell him to go to hell and I feel mixed feelings of respect and envy for the masters who have come to achieve full self-mastery. If only I can be like them. If only I can reach inside of myself and come up with the goods of discipline, commitment, confidence, dispassion about money, and loss-taking ability.

I think of the samurai for a while as the ultimate self-master. Then I shrug the thought off, consoling myself that I will probably live longer than most Samurais. “Is theirs “the right livelihood,” I think with a nasty grin, “or is it the right deathlihood?” What kind of a career choice is that?

Betting their life on a 50% chance game hand after hand after hand isn’t high-expectancy trading. How long will an active Samurai last? Gee, I do slightly better than that myself.

Thinking of the right livelihood, I start to get depressed a little. I haven’t done a thing in three months. Not one single trade, not one single trigger pulled, all because of my inner-weakness. I start to feel like a sissy cowboy going against John Wayne or Clint Eastwood. I think about what Ed might say about that. “No-livelihood might be the right-livelihood for you,” he’d most likely say. I laugh. Can he be serious when he says these things? I can’t tell. I feel so freaking clueless, a true loser.

It gets too complicated to analyze. I decide to drop these non-constructive thoughts and to focus on the here-and-now. From my current position on highway 28, the water and the shores of Lake Tahoe look heavenly, magical, serene, superb. I park the car and I submerge myself in the beauty. I wonder if and when angels visit this place. I wonder if there are sirens in the lake and I imagine how they’d look like and how they’d be in bed. Maybe I have no-livelihood, but I feel most definitely alive. I decide to take a little snooze - La siesta de Angeles.

The entry:
It’s a little bit after 7:00PM and I am in the hot seat. I am on a mission to intellectualize Mr. Fred into subordination. Fellow tribesmen are very supportive. I am happy to have their sympathy. I give a speech for 15-20 minutes on the progressive - maniacal - delusionary - paranoid - phobical - wishful - thinkincal syndrome that affects me whenever I experience a loss.

The typical talk of any loser. I explain in detail why a 50% equity loss is more convincing to me than a 2% loss. Why falling with a thud is more spectacular than falling gently. Why changing system parameters is really good in the middle of a loss, especially if the new parameters are based on fundamental analysis. I explain how stops and timeframes can be stretched intelligently to accommodate one’s ego and psycho needs and one’s wishful projections and how the market always comes back to seeing it your way, especially if you give it enough rope to hang itself. I talk about how elastic the concept of time is and how the ‘now’ can be stretched to include ‘tomorrow’ without violating the fundamental parameters.

Tribe members continue to be very supportive. “Go on,” they say, “keep explaining, keep rationalizing, just do anything to avoid getting into your feelings.”

In my gullibility and desperation, I do not realize that they’re being sarcastic. I am thinking, “That’s great, I am kicking Fred’s ass and the tribe is supporting me. How cool.” I go on explaining more. Now I am giving a synopsis of my career as a financial analyst and how I can build financial models bigger than the pyramids, notwithstanding that I still can’t take a ten dollar loss!

“How do you feel about that?” a friendly voice comes back.

“Good.” And I go on another rationalization spree. How you can run a whole company with my strategic, tactical, manpower, and material planning models.

“How do you feel about that?” a slightly irritated and forceful voice comes back.

“Good.” And I go on yet another rationalization spree.

“HOW DO YOU FEEL ABOUT THAT?” a more irritated and more forceful voice comes back.

Shit, he is sounding like Moses when he caught his tribe drunk out of their minds on his way back from the mountain. I am losing my nerve, not sure if I should go on rationalizing.


I feel that’s it. I am at the end of my rope. They obviously were not serious about helping me intellectualize Fred. I feel like an idiot. I should have known better. The whole purpose of TTP is to encourage Fred and to celebrate it, not to obsolete it. What was I thinking? Am I wishful thinking AGAIN?

My mind is racing. They’re giving me a way out. Do I end the hot seat or do I get into my feelings? I can’t end the hot seat. This is the last issue standing between me and my being a trader. This is the last frontier and I must conquer it. This is my chance. I am here. The tribe is here. There is no better time. I desperately need this. I better get into it.

I close my eyes and I focus. How do I feel? How do I feel? How do I feel? I feel utter disappointment in myself. I feel like a total failure. I feel tense. I feel like shit. I feel sick.

Ouch! My stomach! My hand goes to my stomach. I tell the tribe I have pain in my stomach.

“Great,” they say
“That’s it,”
“Good job…”
“Feel it more,”
“Intensify it,”
“Go with it,”
‘Keep your hand on your stomach, yes, keep rubbing it,”

The pain starts to intensify. It gets stronger by the second. I grab my stomach with both hands and I am shaking a little.

The tribe is getting excited. There are all kinds of encouragement to stay with the form.

The trade:
The pain is strong. It’s moving upwards towards my chest and my neck. That’s it, the gates of hell are open and Fred is out like your proverbial bat out of hell. The S.O.B. always does that. He punches me in the stomach first, then he ravishes through the rest of my body like the blade of a Cuisinart spinning at 30,000 r.p.m. This is the part of TTP that I dread.

I am holding my shoulder with my hand as it is falling off. I complain. I tell the tribe that I have a very strong shoulder pain. That this is exactly my issue with TTP. That these pains are too much, are not reasonable, that there should be a way to avoid them. That Fred is nasty and mean and that he likes to kick my ass every time he gets a chance. Why does he have all these pent-up emotions against me? Why can’t we have a ‘logic knob’ to control Fred’s intensity?

A lot of ‘why’ questions. Moses (the Chief) is ticked-off again. “Here we go! Go on and complain about the process and the tribe and Fred. Just do anything to avoid going into your feelings.”

He’s calling me a whiner! I can’t believe he’s calling me a whiner. I am dying here and he’s calling me a whiner. I am not a whiner, I am an achiever. Well maybe I am not an achiever, I never reach the summit, but I am a hard worker, I am industrious, I am not a whiner.

Humm. Why don’t I ever reach the summit?

I hate the summit. It’s awful at the summit. It’s lonely at the summit. It’s freezing at the summit.

A chill takes over my body. I am shaking. I am freezing. I embrace myself trying to warm up. I feel the goose bumps on my skin. I imagine myself climbing toward the summit of a steep mountain peak In the middle of a nasty blizzard and as soon as I am within a 100 yards from the top I am sliding down, sliding, sliding, sliding, toward the bottom.

The tribe is encouraging me to stay with the feeling. My whole body is now shaking. I can’t stop the shaking. I feel like I am under a giant ice cube.

“Yes, keep shaking your legs, your hands, your chin. Yes, stay with it, yes, that’s it, good job…”

This goes on for a while. I get stiff like a rod. I tell the tribe I am afraid I am going to die. They say, “Die then. Experience death.”

A moment goes by. I start laughing hysterically. Experience death! What a term! Coldness and death go so well together. The summit is death. Funny that this afternoon I was thinking about death. About the Samurai, getting into each fight knowing fully well that death is a 50% chance outcome. Yet it does not bother him.

I tell the tribe that I am mad at the Samurai. How can he fight without a stop? How can he have no sense of self when so much is at stake? How can he be one with the sword, moving in his fight gracefully, flawlessly as if he has nothing on the line. I hate the Samurai. I think he is culturally overrated, over-glorified. I mean the man is an idiot.

“Can you be the Samurai now? Can you do this form?” Moses says.

I sure can. I stand up and I start chopping the air with my blade. Chop, chop, chop.

Encouragement comes from the room, “What a good swordsman, look at these body moves, YES, Keep it going.”

I am swinging my sword. Suddenly, I have an urge to chop my ego. I tell the tribe how I like to chop my ego. They encourage me to do it for a while. I go at it, chopping my imaginary ghost-like ego as he bounces in the air in front me. Chop, chop, chop.

Then Moses says: “Can you be your ego? Do you want to be your ego? Do you want to put that into a form?”

“I don’t like my ego.”

“Can you do it anyway? Can you get yourself to like it?”

I try. I walk around the room, chest high. I feel taller and more erect than Fidel Castro (I am 5’ 5” by the way). I walk with the attitude of Mussolini. The receivers are cheering me and I am getting fuller of myself by the second. I am telling them that they are all wrong and I am right. I am telling them that I can move markets. That they’d better not bet against me.

I am telling them that I am Archimedes. That with my $[amount] account lever I can move the world. Better yet, I am Atlas. I can carry the world.

“Yes, Atlas, act out Atlas now.”

I bend on my knee and raise my hands behind my shoulders as if I am carrying the world and I scream: “I am Atlas and the earth is too light. Add more on. Add Mars and the moon and a constellation or two.”

The exit (climax):
I do Atlas a few times. Then it is time for polarity. I am asked to do all the forms together. I do them slowly at first. The tribe encourages me to do that faster. So I do them faster and faster – the stomach pain, the neck pain, the shaking, the shivering, the Samurai, Archimedes, Atlas.

I do them together a few times.

Then I stop. I am on my knees on the floor, a huge amount of energy is flowing within me, centered in my chest.

“Listen to your body,” a voice comes in from behind me, “your body knows what it wants to do, just observe what your body wants.”

Still on my knees, my eyes are closed, I am totally focused on my body, I feel all the forms spinning inside me like a hurricane. The eye of the hurricane gets clearer and clearer, it is centered around my heart. I grab my chest with my hands and I bend forward slowly to let it pass.

My forehead touches the floor, I am sobbing, crying. The funnel of the storm passes gently, peacefully. I moan:” my past, oh my past.”

The room is quiet.

I am at the zero point. Such peace. Nothing matters. Perfect world. Everything is beautiful. The high of highs. Magic!

A couple of minutes pass. I thank everybody. What a high!

“So where did all these forms converge to?” Moses asks.

“To this state of nothingness, nothing matters, total peace.” I reply.

“Do the Samurai.”

My body hardly moves.

“Do Atlas and Archimedes.”

I just smile. My body does not feel like doing nothing.

“How do you feel now about taking a loss?”

“Trading is all about loss-taking. No loss-taking means no trading.”

“How do you feel about taking a loss only to see the stock bounce back and rally for 20 days in a row?”

“Too fucking bad. Hindsight is 20/20. At the time I take the loss it is necessary.”

“How do you feel about taking the loss only to see the stock collapse 20 points?”

“Good. That is what the system is supposed to do in the first place.”

“Good, you see this state you are in now? I want you to observe it, to record it, to save it in a way that you can retrieve it later on demand.”


Very nice description of being on the Hot Seat.


FAQ encourages the formation of Tribes and maintains a bulletin board to help like-minded people connect.  See Tribe Directory, above.




The Samurai Warrior


conducts his life

according to the code of Bushido

("the way of the warrior").


Bushido stresses loyalty to one's master,

self discipline and respectful, ethical behavior.


Clip: http://www.usask.ca/education/






Fri, 8 Oct 2004


Hello Ed,

Does the fundamental theorem of calculus establish that differentiation and integration are inverse operations?

The essence of the above observation didn't sink in until I reread your post dated Sat, 05 Apr 2003.

The Fundamental Theorem of Calculus does not establish anything.  It is mathematical language for a principle that you establish by AHA.


If f(x) is continuous on [a,x], then the function

has a derivative at every point in [a,x], and



Fundamental Theorem

of Calculus


Clip: http://www.ies.co.jp/math/


Thu, 7 Oct 2004

The Einstein of Trading?


On a scale of 1 to 10, with 1 being the least complex and 10 being the most complex, how would you rank the complexity of the mathematical formulas you use in your trading system(s)?

If you were to teach these formulas to some lucky person, what would be the mathematical prerequisites to attend this class (i.e., Algebra, Calculus, Geometry, etc.)?

Perhaps you are indeed the Einstein of trading, which is quite fascinating.

The complexity of a trading system has little to do with the markets and little to do with the math; it has mostly to do with your emotions.


The Directory Page shows the requirements for attending the Incline Village Trading Tribe.



Thu, 7 Oct 2004

Re: Kids (Oct 2)

Dear Mr. Seykota,

Thanks for the response. How do you decide when the kid is capable of making the choice to accept / reject PPR (Private Property Rules)?

This morning when I was on my way to work, I saw a father with his daughter, about two to three years old. She has a book, and she keeps bending it. The father tells her not to, but after a while, she does it again. Now the father just takes the book away from her and she isn't happy about it.

So I begin to think - what would I do if I am the father? If the book is hers, then under PPR, I respect it as her property and she can tear it into pieces and it's none of my business. But then I feel that she may not be mature enough to understand the value of the book, and as the father I need to teach her how to properly read a book. So while I want to implement PPR as early as possible in the childhood for the kids, does it mean the person need to have a certain level of maturity or else it is meaningless? If so, where do I draw the line? And does it mean I'm imposing my judgment on someone? Is this judgment necessary?

Regarding my second question about kids crying in public that makes you embarrassed, I think you point our correctly about my k-nots about crying. As a kid, I cried so much that people always laugh at me for being so soft and "girly", which remains one of the things I like to hear the least. The interesting thing is, there are several occasions on the hot seat where I really want to cry, but tears just won't come out, and I'm just feeling frustrated.

OK now, say instead of crying, what about if the kid makes an obscene gesture in public because they think it's funny? Or say the f-word because that's what they learn from movies?

I think I'd feel embarrassed when they do that in public, and what do I do in accordance with the TTP principle? Do I stop them from doing the gesture, or do I encourage them to keep doing it and feel the feelings that come up? I guess the long-term solution is to take my embarrassment to TTP and try to seek its positive intention, but when I'm at that moment with the kids and relatives and they give the middle finger, what can I do?

Many thanks.

Your child is always capable of making a choice.  He may not want to make the choice you think he "should" make.


A child is always mature enough to understand the value of a book.  She may not value it the way you do.


You are the one who makes the judgments that define "properly."


If your tears don't flow on the hot seat then there may be some receiver(s) who share your k-nots..


The child seems to enjoy making gestures as a form of communicating something (perhaps to you).  When you receive the communication, the form likely disappears.



Kids and Markets


are very good

at sending the exact message

you are unwilling to receive.


Clip: http://www.fabricattic.com/






Thu, 7 Oct 2004

Re: An Experience at Work (Oct 1)

Dear Sir,

Thanks for the response. Let me clarify the junior member of my team was changing the parameters on a trading system of the group, and the system is one which I'm no longer actively involved in. He claims to have done testing, but I remain skeptical as I haven't seen the results nor knowing the methodologies he employs (smells like over-fitting from the little that I know?). He does briefly talk to the manager about the change, but I don't think she knows or cares too much anyway. So how do I feel about the change? I don't feel excited about it and perhaps even a little bit worried.

However, and I think this is the interesting point that you have mentioned to me on our phone conversation several months ago, that I don't feel like confronting others. In this particular case, I don't feel I want to bring up my concerns, because I'm no longer actively involved on that particular system, and I feel that I have already created a dramatic situation with just a mere comment. In the culture I grow up, one tends to learn to avoid confrontation (first rule, never confront the elders or the respected), and I always fear confronting others means I'll make an enemy, making more people dislike me, you know?

But when I think about it, I do like confronting others. I do like challenging other's views, especially when I feel they are giving B.S. I feel like I'm on a mission to be the one to point out that the emperor has no clothes. In an online technical analysis discussion group, there are many times I challenge other's ambiguous views, e.g. technicians who are hedging themselves by making confusing calls that can mean both ways, to the point that they get annoyed.

Hmmm, sounds like another TTP entry point I guess...

One of the principles of TTP is that the feelings we avoid are the very feelings we want to feel the most.





is a way

to clarify boundaries.


Clip: http://www.angelfire.com/movies/



Thu, 7 Oct 2004


Dear Sir,

Ed says, "Good receivers typically report they get as much out of receiving as sending."

It's interesting to see this comment from you, right after a very deep and exciting session we had last night. We have two terrific senders who have all the intention to feel their feelings, and we as receivers all feel enthusiastic, energetic and eager to receive.

I think the leap from good to great sessions come when we all realize the tremendous experience we can get from the hot seat. All of us gain the strong intention to feel our feelings when we get the opportunity to be on the hot seat, which somehow (through the under-Fred network??) gets to the receivers, and focuses the intention on receiving and validating those feelings without our own agenda.

It is a great experience, and we feel another level into the Process. I for one feel the receiving process last night was absolutely fantastic!!! Thanks!!


Wed, 6 Oct 2004


Position Sizing Calculator

Hi Ed,

If you are interested I can make a ... [position sizing calculator] for you which will run from the Trading Tribe website. The procedure is you just upload the PHP source file to your webserver, and then link to it just like any other weblink.

Following in accords with the Private Property rule, I will give you a version of the calculator for free for use only on the Trading Tribe website, as long as you agree not to release the source code to anyone else.



Please place your calculator control in a web page that also contains warnings that it is for demonstration purposes only and traders may use it at their own risk.


You might also include a discussion of the theory behind sizing for risk control, and a description of the algorithm.




Size Matters


Clip: http://www.uweb.ucsb.edu/


Wed, 6 Oct 2004



Dear Ed,

Every time I think of a difficult issue I cannot resolve, I seek your insights, and with your great wisdom, you've provided countless ideas. I notice vast majority of them tie to taking the issue to TTP, which I now understand that is the most proper place to resolve it. To get to the root of the issues which comes from some knotty feelings requires going back to those feelings to un-knot it, and that's what TTP does.

So it's nice to know that a lot of issues I can probably resolve them through TTP. However, we only have one TTP session each week, and that's on the high end in terms of frequency. Each time we have one to maybe two hot seat occupants, and with seven or eight members we get on the hot seat on average every five to six weeks.

So while TTP is our "cure" to the issues, what are some ways to prevent them in the first place, as the adage says "prevention is the best cure?" What're your thoughts on it? Many thanks.

Good receivers typically report they get as much out of receiving as sending.


When you are receiving, you might still take your feelings of "I can't get enough" into the process.




Vowel Shortage Road


Shortage may be

a point of view


Clip: http://www.joe-ks.com/



Wed, 6 Oct 2004


Trading for Myself

Mr. Seykota,

I am contacting you for advice on where to start learning how to trade / investing efficiently.

I have learned of you from "Market Wizards" and "Trend Following" books.

I have read through your Trading Tribe web site and it seems that this is for active traders.

One good way to put things off is to keep wondering where to start.



Fish, all in a Line


waiting for advice

on where to start swimming.


Clip: http://www.waterworksdesign.net/


Wed, 6 Oct 2004


The Cycle


i am a day trader with enough luck during the past 8 years to pay the bills and live comfortably.


i am carefully reviewing FAQ for help with my trading cycle drama. i am experiencing some of my feelings for the first time with my wife's help.


how can i know the positive intentions of my feelings. my trading is a huge mood rollercoaster. large drawdowns seem to motivate me to stick to my risk management plan, while gains seem to just expand my appetite for risk.


i usually have a pain threshold that once hit, seems to change my perspective and renew my respect for the risk i am taking with each position. i trade an extremely small account that is leveraged to the moon. this is by choice, because i believe that with more money in my account, my drawdowns would just be larger on a hard dollar basis and about the same on a percentage basis (sort of the Livermore technique of hiding money away that i can't get at).


i guess i don't trust myself. i do take profits out of my account on a monthly basis for expenses, so i realize that my emotions will naturally run high based on the success of each trade.


i would just like to get to the point where my equity curve is not at the mercy of my feelings of frustration or anger. i could write many more pages of detail, but i gather from FAQ postings that you probably don't need it to help me.

Pre TTP: My equity is at the mercy of my frustration and anger.


Post TTP: I see the positive intention of my frustration and anger; I no longer need to engineer drama with my equity to justify feeling them.




A good receiver knows deeply that feelings have positive intentions. 


In the presence of many such receivers (a Trading Tribe) your Forms come to the surface, like iron filings come to a magnet.


You might consider attending a tribe meeting, or a Workshop to experience this directly and get the knack of it.  See links above.



The Cycles Continue


until you accept and integrate

your forms.


Clip: http://www.vicon.com/main/



Mon, 4 Oct 2004



Hi Ed!

Are volume trends useful in determining the likelihood of trend continuance after a breakout?

Your terms:


volume trends


trend continuance

are all ambiguous, fuzzy notions.


They have little to do with trend following except to provide excuses for missing signals.


Trend followers take their signals and leave distractions to fuzzy-mentalists.




Fuzzy Mental


Ms. Fuzzy Mental

is head of the department

in charge of giving you excuses

for missing signals.


Clip: http://www.rosalinde.com/



Mon, 4 Oct 2004


Passing AHA

Dear Ed,

This morning it suddenly hits me about your intention of TTP to be a passing aha. It is just like any system, any rules.


They are there to help us to do certain things, especially the things that we don't do on a consistent basis. Then, as they become natural to us, there is no need for the system or rules any more. It is a part of us already!!

It applies to everything we do (or master). Like English (I am not a native speaker). I learn about the grammar rules, about the preposition, the past/future tense and etc. They are rules. And then after these years, they become a natural part of me where I no longer need to think which is the correct preposition to use in look at, look for, look into, or look after, or is it I looked, I have looked or I had looked.


And then the exciting part is, once the language has become a part of me, I break the old rules and try something new, like SVO-p, and see a totally different world.

Or trading system. Having a system to buy at a 22-day high or 220-day high is just a system. When we reach the level where buying strength is just a natural part of us, the parameters are just meaningless numbers. When Fred does not need to create drama to get our attention, we can just trade freely without any restrictions we apply on ourselves. I clearly see that rules are there just because they are the things we don't (or haven't) completely accept(-ed) yet.

To me, TTP is synonymous to feel our feelings. When we become naturally aware of our feelings, that Fred and CM are freely communicating with one another, then there is no "need" to be asking ourselves what is standing between us and _____.


It's just part of us already. And there is no line between sender and receivers. Everyday, everyone around us, we continue to send, and we continue to receive, in the moment of now. For example, when two people hug, shake hands, or have sex, they are both sender and receiver. Just like addition or subtraction, now that we've learned the rules of how to add or subtract, it's just a passing aha and a part of how I think. TTP, then too, is just a passing aha.

Wow, this is great stuff!! Thanks Ed wholeheartedly for introducing us this concept. I come a long way but I think I'm starting to get the aha. And it feels GREAT!!! Thanks.






Just When You Get a Good Look

at a passing AHA


it's gone.


Clip: http://www.satonline.ch/menus/



Mon, 4 Oct 2004


Joining a Tribe


Following up on my registration for November's workshop, I have not joined a tribe to this point.


There are no tribes in close proximity to my home. I was wondering if it would be helpful or necessary to forward the prerequisite material for joining a tribe (e.g. CV, essays) to you directly.


See Tribe Directory, above for instructions for joining and / or starting a tribe.


Some people travel considerable distances to attend meetings.  Incline Village, Nevada members hail from Canada, Minnesota, Illinois, California, etc.

Mon, 4 Oct 2004


FAQ, Ground Rules


Is it possible to send me the FAQ as well as the ground rules.

Many Thanks

You can find links to FAQ pages, including ground rules, at the top of this page.  It's all for free.


I can also send them to you, via email, fax, or special courier, depending on your budget.




FAQ Hard Copy

to your door, in seconds


for a small fee.


Clip: http://hrdi.engin.umich.edu/images/




Sun, 3 Oct 2004

A good web site


You might consider if your aversion to the trend in the growth of government stands in the way of your aligning with it.




Placing Alternatives

in past and future


puts them out of reach.


Clip: www.pritchettcartoons.com/








Sun, 3 Oct 2004


Risk Measures

1) How do you define static portfolio mix?
2) Do you define dynamic portfolio mix, then?
2a) If yes, how do you back-test this?


If you back-test a portfolio that you select before the test, you effectively carry your selection  decision back to the start of the simulation.


A more rigorous approach is to define only your selection criteria and then have your program select the portfolio, real-time, as it proceeds with the simulation. 


This approach may be out of scope for consumer-grade back-testing software.



Good Practice for Simulators


Stay in the now

and avoid accessing

the past or future.


Clip: http://www.fbckenner.org/cartoon/


Sat, 2 Oct 2004



Dear Mr. Seykota,

What do you do when your kids violate the Private Property Rule?

If your kids cry in public and you feel embarrassed, do you encourage them to cry more and experience the feeling, or do you try to make them stop crying?

Thanks for sharing your experiences.

I encourage my kids to imagine how life might work and feel (1) in a private-property system and (2) in a communal-property system.


These are both systems for defining interpersonal boundaries. 


Kids with a choice tend to choose the former.


Your assumption, that I feel embarrassment when my kids cry, may indicate you carry some k-nots about crying.





may indicate sadness,

grief, anger,

or even joy.


Clip: http://www.machelpdesk.com/cry.jpg

Sat, 2 Oct 2004



Thanks Ed,

Very nice picture of Marilyn [Monroe] … but it reminds me of what antiques we are.




Antique Dealers


know a good chest

when they see one.


Clip: http://www.nhfa.org/images/


Fri, 1 Oct 2004


Receivers' Role in the Polarity Process

Dear Sir,

What is the receiver's role in the polarity process? Is it any different than in TTP?

What I get from your response (Receivers off the hook, Sep 16 and 20) is that receivers are to receive, not to lead or guide.


But when I read the various polarity experience on either FAQ or Pollinator, it sounds like the receiver takes a more active role than just validating.


It seems that the receiver asks the sender to experience the first dipole, the when the receiver deems appropriate, he asks the sender to experience the second dipole. And finally, when he thinks the sender is ready, experience both simultaneously together.


So it involves some form of leading and guiding, doesn't it?

And if so, does it imply only one person to take that guiding role?


For if we have multiple receivers, each wanting to support the sender to experience the various feelings, may give mixed guidance. What is the proper way? Thanks.

The overall framework for the Polarity Process is an agreement the sender and receivers make at the start of the process - an agreement to follow the system.


Within that framework, the receivers assist the sender in tracking and developing feelings into forms, wherever they go.


These forms, or Yalfs, then combine as the sender integrates all his feelings in one moment of now.




The Yalf, the Yalf


Looking for it's other half.


Fri, 1 Oct 2004

An Experience at Work

Several days ago one junior member of my group sent a group email out about some changes he has made to the system.


He just finished school last year and joined our group, and upon receiving his email, I replied (to all) that we should put a comment at where we keep our P&L such that we can easily spot if there is noticeable difference in the P&L. Keeping good record was what I learned from senior traders when I first started in this business.

This guy didn't appreciate my response. In fact, he felt it was ridiculous and upset that I sent the email to all before consulting him.


Now it was me who got really upset. Heck no, I was IRATE. Who's this !@#$#$ to be telling me what to do as if he's the boss? I was so angry that I even feel a temporary "void" on the back side of my body. I really can't put that feeling into words, but it's like for a split second I am so upset that I hear nothing and I feel a big emptiness. We sent messages back and forth - I was in a mockery tone and he actually took it as if he was really the boss.

Well, I was so utterly angry yet I couldn't fully experience the feeling (since I was in the office). I was trying to control them. Then I took a break, and I couldn't help but ask myself, why am I getting into this? I thought I've learned so much that I wouldn't be "sinking to his level." That's when I suddenly thought, what would Ed say?


I remember Ed said two people arguing means they are refusing to receive each other. One rarely succeeds in convincing others through argument. Instead, receive and validate the other person's feeling, and that's when he can make real change. Who knows, maybe I am the one to make the change.

And so I become curious in wanting to know his feelings, and then try to support it. Later he pulled me into a room, and I started by asking him the question, "Can you tell me how do you feel when you see my email?" He said he felt it was ridiculous and that I should have known better not to do it.


My immediate response is a judgment and disagree, but then I later realize this was the same ineffective path I came from, so I ask him to elaborate more instead. Slowly I feel less and less the need to convince him to understand my point of view, but just simply validate his feelings by saying, "Great, thank you for telling me."

In the end, he said to me that I am the only person in the group whom he felt he was on the same page with. For me, I think I learned the joy of receiving. When I think of it now, to receive actually gives me "more" than to win an argument. It is an amazing insight, and I thank you wholeheartedly for that, Ed.

I'm still thinking about that split second of indescribable feeling of absolute anger that I suppressed at that time, and I am thinking of bringing that feeling into the Process to fully experience it for its aha message. I try to do it here, but I cannot really re-create that feeling. It was strong yet so short.


I try to replay what happened in my mind, but I cannot get the same intensity to the angry feeling. I am hesitant to ask my tribe receivers for help, because I am afraid that I get stuck just like this, and I'd feel guilty for asking for help yet making no progress.


There were times in the past sessions where I so much want to get some feeling response that I am just impatient and frustrated, instead of the original feeling that I want to feel. And when I try to feel the impatience or frustration, I just feel I am going nowhere, feeling pressured and just want to call it quit yet guilty to want to be a quitter.

I feel there is a lot of chain feelings here. How do I start cracking it down to the root? Many thanks, especially teaching me a wonderful way to argument. (To succeed in an argument, start receiving and validating)

Allowing junior members of your team to change your trading system without thorough testing and without including senior members in the decision process seems like drama.


Your choice, to receive instead of argue, demonstrates a good grasp of the process and marks you as a leader.


Your job, on the hot seat, is to be willing to follow your feelings; the receivers' job is to encourage you to develop your forms - to go where no man can go alone.


You might consider taking your feelings (of not getting proper support) into the process.



A Good Support System


is essential for comfort, safety

and success.


Clip: http://www.drkmedical.com/




Fri, 1 Oct 2004


Workshop: Attendance & Deadlines


I wanted to know how many people usually attend these workshops and if there is a deadline for sign up.

Every workshop is different so there is very little usual about them.  The November 2004 Workshop has 17 registrations, as of October 7.


The Workshop has no deadline; the price just keeps going up.

Fri, 1 Oct 2004


Back Testing

Dear Mr. Seykota,

Thanks for your response on slippage and back testing. When I try to implement your idea of "buy stop at 100 miles away", I find myself in the classic dilemma - if I put a market buy stop, I may move the market too much and effectively kill the profit opportunity; if I put a limit buy stop, I may not get filled at all. And worse, I cannot really simulate limit orders because even if prices eventually dip below my limit price, it does not necessarily mean the market can fill ALL my orders.

So when I try to increase the slippage estimate to the worst of the day, it takes a greater and greater hit in the P&L curve (flatter and flatter), and I feel more and more disappointment. I feel that very rarely can a system give a respectable P&L after such conservative (meaning estimating so bad) slippage assumption. It is so bad that I try to avoid looking at the P&L under those assumptions. And further I feel that those really huge moves (which are more often in less liquid markets) are so difficult to catch because they are moving so fast. I fear if I move the market too much; I regret if I miss the move - are these the dipoles for the Polarity Process? Can you please share some of your insights?

Transaction costs, such as commissions and slippage, become increasingly severe with increasing trading frequency.


To minimize these effects, use longer term (slower) systems.


In trading, slow and steady profits beats fast and choppy whip-saws.



Acting like a Snail


might be the fastest way


Clip: http://www.ppp.org/prod/prods/


Fri, 1 Oct 2004



Following the Feelings

with the Thought Requirements

of the Polarity Process

I have been tribing with the Incline Village Tribe for approximately a year and a half now, but just recently worked the hot seat in a polarity process. My hot seat approach has always been let the feelings take me where they take me.


I believe surrendering to the feelings and not thinking them through provides me with interesting and surprising results. Mainly where did that feeling come from, or how do those feelings go together. The hot seat has always been a key to unlock those feelings that I didn’t necessarily associate with where I was in the here and now.

On September 2nd I was the second person to the hot seat which is always good for me. The receiving that I had the privilege to take in from [Name] really got me loosened up to give into to the feelings, but wait ... I have to think some of the feelings to do polarity to get the final form created from all my various forms.


This was a little unsettling (so I felt the unsettledness, not bad). I was working that night on feelings that related to being just overwhelmed with all the tasks related to the roles I fill such as, a husband, father, business partner, entrepreneur, tribe member, etc. Not to mention the responsibility to letting the inner me just be in the moment. Pretty daunting stuff and I was drowning in the needs of all these tasks instead of just immersing myself in them and riding the wave of my life, Kowabunga.

So after [Name]. was done sending we took a 10 minute break. Instead of the commensurate cookie, nut, or chunk of cheese I prepped my self for the process.


Let’s see, let’s organize my feelings around this issue. Okay I was ready to send with my organized feelings and submit my select forms to the tribe for polarity processing.


The most I had ever seen done before were 4 separate and distinct forms. Based on my prior hot seat experiences that might be hard for me since I typically involve more than 4 forms, not to mention forms that I don’t know I had, how they fit in, nor do I typically remember all the forms I did. (To bad this stuff can’t be bottled.)

The tribe reconvened and I assumed my normal starting point knelling on the rug in the middle of the floor surrounded by my tribe members. I stated why I was working as I have mentioned above and that I feel overwhelmed with having to make choices as to which task to fill and which roles get short changed. I asked if anyone needed clarification, great no one did so I can start sending my organized thoughts. To my surprise though my feelings said we don’t work that way, besides were your friends, don’t worry we’ll take care of you. So in the words of my two year old daughter, LET’S GO and away I went.

Well as I am told and from the little I remember about 11 forms later and an hour and a half I was done. I ended in a form of immense peace comfort and tranquility. I didn’t want to leave that form and since then I revisit that ending form experienced during that form when the swirling requirements of my life take me out of the present.

Good description of the work !

Fri, 1 Oct 2004


Request for New Tribe

Hi Ed !

I request your sanction for a new tribe in Davis, California.




Davis, CA


Davis compared to California state average:

Black race population percentage significantly below state average.

Median age significantly below state average.

Renting percentage above state average.

Length of stay since moving in significantly below state average.

House age significantly below state average.

Number of college students significantly above state average.

Percentage of population with a bachelor's degree or higher significantly above state average.

Data: www.city-data.com/city/