© Ed Seykota, 2003 - 2009 ... Write for permission to reprint.

Ed Seykota's FAQ

(formerly: Frequently Appearing Questions)

Home  ...  FAQ Index & Ground Rules  ...  Tribe Directory - How to Join

TTP - The Trading Tribe Process  ...  Rocks  ...  Glossary

  TTP Workshop  ...  Resources  ...  Site Search  ...  The Trading Tribe Book

TSP: Trading System Project  ...  Breathwork ...  Levitator

EcoNowMics  ...  Contact Us  ...  The Whipsaw Song ...  Music


December 1 - 14, 2008


<==  Previous  |  Next  ==>



Note: The intention of inclusion of charts in FAQ is to illustrate trading principles - The appearance of a chart does not imply any kind of indication or recommendation to buy, sell, hold or stay out of any positions.




(Quotes from Ed in Red)


Sunday, December 14, 2008


YPROC - Yearly Percent Rate Of Change


Hi Ed

I’m re-checking my understanding of your TSP project on trends and the yearly rate of change calculation (YPROC) in particular. From your readers feedback section you state the following


YPROC = 365.25 / 20 * (P-AV20)/AV20


YPROC = yearly percentage rate of change

AV = time constant (20 days/bars)

P = Price

365.25 = Annualizing number

I’m a bit confused why you use 365.25 as your annualizing number as this is the actual number of days in a year, but there are 5 stock trading days per week … so 5 trading days * 52 weeks = 260 trading days (or 260 bars on a daily chart) per year.


The time constant used in the example of 20 days/bars (or one month) is in actual trading days and hence excludes weekends. If this is the case then perhaps the annualizing number could be 260 trading days to exclude weekends as the time constant does or conversely the time constant could be changed to include non-trading days and be changed to 28.

Since the purpose of the runs is to compare the bliss function for various parameter sets, the choice for an annualizing number is arbitrary, as long as you use the same number in all runs.


You might also note: The value, 20 days, in the 20-day exponential average does not strictly indicate a number of days. 


It is, more precisely a smoothing constant.




The Tallest Girl


is still the tallest


even if you divide all the heights


by 365.25.



Clip: http://www.northgeorgiastatefair.com/


Sunday, December 14, 2008


Taking It To The Max


Hi Ed,


I reproduced all your results for Exponential and Support and Resistance projects except Dr-Dn numbers and bliss because of that.


I just don't know how to calculate it. So, I cannot complete optimization step for both projects. I sent this question to you almost six months ago, and get the following answer from you,


"Drawdown is the dollar amount from the previous Peak to the current rquity. Percent DD is the ratio of Drawdown to Peak."


I have tried to calculate, per:


Dr-Dn = max((Previous Highest Equity-current Equity)/Previous Highest Equity)


but never get your numbers. Could you or somebody from readers provide me an example of calculating Dr-Dn for Support and Resistance project (case fast/slow 140/20 ). I would highly appreciate.


I spent a lot of time and cannot figure it out.

The max function normally takes two arguments.




Y = max(a, b);


For a = 5 and b = 3,

Y = 5, the maximum of 5 and 3.


Your max function has only one argument.


Here a pseudo-code suggestion:




   ... read next day


   ... all_time_high = Max(all_time_high, new_high);

   ... Dr_Dn = all_time_high - current price;

   ... DD_Current = Dr-Dn / all_time_high;

   ... DD = max(DD, DD_Current);




You might notice this way uses two max functions.

Sunday, December 14, 2008


Willingness Testing


Hi Ed,

Ed Says: In TTP, we guide our interventions by testing frequently for willingness.

I am wondering how you apply these principles in your own life and relationships.

In TTP we support people who are willing to follow the principles and to do the work.


Sometimes people say they are willing to do the work and then they do not do it and they do not make progress.


Incorrigibles typically attempt to draw us in to some type of co-dependent arrangement in which they can blame us for their troubles.


Frequent willingness testing exposes this gambit.


It is then up to us to notice any attachment we have to fixing incorrigibles and to let them go on their way.




Acquiring and Releasing


are essential elements

in drinking beer


and in managing associations.



Clip: http://www.killsometime.com/Pictures/


Saturday, December 13, 2008


Associate Projects


I am excited and happy to hear from you. Thank you for your interest in my results.

The main result I want to manifest is: I am the best dad, husband, son, friend, trader, musician and person I can be. That result is a process, not a destination. In the process I achieve results in harmony with my great loves: mainly family, trading, and music.

Specific results, in harmony with my great loves, important to me now:

Family / Relationships Result: I listen to and validate others' feelings, continue my tribe work, attend a workshop, and attend an IV tribe meeting as a guest.

Trading Result: I complete a new trading system project(1) with your guidance and feedback, online, in person, or in another manner you may suggest.

Music Result: I record an album with my new band that inspires, excites, connects and creates a meaningful soundtrack for my listeners' lives.

I attach a diagram of my thought process. Thank you for reading,

PS: I am inspired to complete your TSP exercises after an e-mail exchange about learning C# with our tribe leader. He mentions your systems run on C#. I get excited and imagine seeing this for myself. Within 2 weeks, I become familiar with C# and I send you my completed exercises. I already feel stronger and clearer about my trading, programming and testing.

Projects I find interesting: -The unlinked TSP projects.
-A TSP you propose.

-The difference between theoretical heat, backtest heat, and live heat.

-Thoughts on buy signals generated for inverse index ETFs in long-only equity systems

-Examples of major breakouts that never pull back to the original entry point.

You enumerate various projects: family; trading; music.


You might consider working on these projects every day and noticing any feelings that come up as impediments.


You might then take these feelings to Tribe or report them to this site.


If you wish to publish a study to this site, send me a draft of it.

Saturday, December 13, 2008


Wants to Overcome Shyness


Hi Ed,

I have always been fascinated by you since reading about you in Market Wizards and how you became a master of yourself. I recently finished reading your book and find it very interesting how the TT process works.


I am kind of a private person and feel funny talking about personal things in front of others or even at a restaurant while chatting with a friend I feel very uncomfortable talking while the waiter is standing there. Maybe that's something I need to explore now that I am writing this but was wondering how you would recommend overcoming this fear of talking about myself or personal problems in front of a group of strangers.


I have read Toxic Parents (a book you recommended) and grew up with constant criticism from my father. I am guessing that could be a factor contributing to this.

I would appreciate to hear your feedback.


In our Tribe work, we do not attempt to "overcome" feelings.


We explore them, experience them, develop insights and come into harmony with their positive intentions.




One Positive Intention of Fear


is risk control


especially when you

hear that train a commin'.



Clip: http://www.newsline.dot.state.mn.us/


Friday, December 12, 2008


Elliot Waves

see: previous


Dear Chief Ed,


Thank you... haven't laughed so hard in weeks ...


p.s. petroleum charts not updating...

Thanks for your encouragement and for the catch about the Chart Server.

December 12, 2008


Wants to Help Extend TSP


As a trader, I found the ideas in the TSP project of great value. I used to check the site often for for the TSP updates. I also notice that the last update was sometime in 2006. I do not know whether you intend to go ahead with the next topics eventually.


In case you intend to do that, If there is a way I can contribute , I would consider that a value addition. In my opinion, the Trading Tribe website has a self-selecting audience and I consider myself as a generic of this pool of visitors to your site. I have a feeling that the completion of TSP would be beneficial for aspiring traders who are genuinely looking for guidance. Do let me know what you think about this.

I see the Trading Tribe website and the TT book as a gift from you. It reminds me of "The Phantom's Gift" by someone called Phantom of the Pits.


It is possible that you may not be fully aware of the impact the TT site can have on people. I sincerely hope that the website eventually has all that you wish to share.



Thank you for your encouragement.


I am working with a number of contributors who are preparing articles for publication on this site.


Thursday, December 11, 2008


Youth vs. Old Age




You might enjoy this.



The crowd generally favors young and strong.


The pros remember to bet on old and sneaky.




Young and Old


are rather subjective views.


Clip: http://www.1000ventures.com/design_elements/


Thursday, December 11, 2008


Re: Positive and Negative Emotions

see previous




I see what you mean. However, such people may show reticence to experience and / or express fear and anger and tend may have problems managing boundaries and risk



In Tribe Meetings, we assist each other in developing the willingness to experience our feelings.

Thursday, December 11, 2008





Are trading system risk management parameters actually boundaries for the trader's interaction with a market?

Is sticking with a trading system actually a form of boundary management?

A mechanical trading system can act as an interface between the trader and the markets.


Sticking to the system is like honoring the interface agreement.



Thursday, December 11, 2008


Mixing Messages




I want to learn from you how to trade and quit my job and do trading. That is my goal. But I am so far from it and can only wish you a long time to live and be active in trading. :)


Thursday, December 11, 2008


Wants to Track Contributors


Hello Ed,

For obvious reasons you leave personal information from emailers out of FAQ.

But wouldn’t it be more interesting for many readers if a fictitious ID or unique serial nr. would be attached to each individual who emails you?

If such ID appears at the bottom of a person’s emails, one could Google the ID and follow someone’s story in FAQ through time.

Currently I often read stories from people and end up wondering how they fared afterward...

Kind regards,

Thank you for your suggestion.


You might consider taking your feelings about <tracking people> to Tribe.

Wednesday, December 10, 2008


Extending TSP



I received the TT book and delighted to read it! You rightly mention in the book that as one reads, one is likely to daydream. Happens to me. As I read, I take notes and at one point, I relive my last trade day-by-day and recollect all emotions in tranquility.


I understand the true meaning of every emotion being a good intention! I understand how 'dumb' actions like buying a stock on a decline, adding more on further decline and putting whole capital on one trade, were all motivated by good intentions of getting value-price, building large position and maximizing the leverage, respectively.


And with this perspective I see how these well-intentioned actions could cause failure. Suddenly, Ed and Fred see eye to eye! The three to five pages that talk about trading are all one needs to know.


Interesting, I discover the exact thoughts a day before the book came in the mail. So the words from the book confirm rather than perplex!


What an AHA! I am writing code and testing the exp lag and SR systems. Completed exp lag in python a while ago. Today wrote the SR system signals part. These, along with the discussion of Risk management on your webpage are best resources anyone can ask for.


I realize now that Lag, SR are only some ways to systematize the core trend trading rules - buy box breakouts (as your father teaches you according to Covel's book-notes) and make small bets.


If the bets lose, cut short. If they win, take as long as you can ride them. These are the best information on trading, what can come from outside. The remaining has to come from inside.


TTP helps there.


So, very sweet. Many many thanks.

Thank you for sharing your experience and for your encouragement.

Wednesday, December 10, 2008


Wants to Understand


Dear Sirs, I am new to trend following.


I am currently stuck on system development and testing. My expertise in this area, especially programming, is minimal Any input as far as platform recommendations or books (or series of) to get up to speed is appreciated.


Also, through my reading I note most trading being done in the commodity markets. I currently trade stocks / indices. Any reading recommendations as to understanding the mechanical differences of trading these instruments is also appreciated. Thanks for your time and any input.

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



If only you were smart enough

to perceive what I am saying

you would have to agree with me.


Clip: http://itodyaso.wordpress.com/tag/hell/

Wednesday, December 10, 2008



Hi Ed,

Thank you for the conversation we had by phone over the Thanksgiving holidays. I really appreciate your insight and ideas on how I might progress to acquire clients.


I have already contacted a potential client and am working with him to fully understand his needs so that I can best serve him.

Ed, in the conversation you and I had over the holidays, we covered several topics, however 2 topics that you mentioned and we did not discuss in depth are the steps to take to limit the affect of start date dependency and equity dependency on my back-testing research methodology.

What steps can I take, or items do I need to be aware of, when performing my back-testing research to limit the affect of start date and equity dependence on my research results?

Thanks again for all of your help.

Back-testing does limit start-date or starting-equity dependency - it exposes them.



Tuesday, December 9, 2008


Amazing Billiard Shot - Video




This is the coolest billiard shot ever!



Thank you for the video.


Sometimes a complex design actually works.

Tuesday, December 9, 2008


Good Control - Video




You might enjoy this.


Finally, someone’s figured out a useful mission for the cab-over chain saws!



Thank you for the video.


Using a helicopter to open beer bottles seems about in line with standard government efficiency standards.

Tuesday, December 9, 2008


Almost Home - Song and Video



What a great song.....


"Man I wish you'd just left me alone
'Cause I was almost home..."



Thank you for the URL.


I wonder what is the point of connection you have with this song.

Tuesday, December 9, 2008




Hi Ed!

At our latest Trading Tribe we had three new members. We went from 3 to 6 people and it feels good.

I am still a little bit hesitant to encourage people on the hot seat. When I read in the FAQ pages it seems the tribe leader is often very active.


In our tribe we are mostly receiving without interfering except when some form is obvious. Do you consider the active part of the receivers very important?


We are active receivers but we are not giving any particular direction to the hot seat. One thing is good about it - that we are not trying to "fix" the hot seat. We follow the hot seat in his/her direction and we think it has worked out well.


We consider that we don't have to change what is working. I actually received an "AHA!" right now. It is similar to the trading model. I have one that is okay.


It is working out fairly well but still I look for something better. The same way with the tribe. What if we are missing some essential element that makes us more effective and progressing.

Best regards,

Thank you for sharing your process.


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




This is an intervention ...

Give me the bath products.


I don't have a problem.

Get away from me!



In TTP, we guide our interventions

by testing frequently


for willingness.




Clip: http://www.nataliedee.com/030808/


Monday, December 8, 2008

Stress and Boredom

Dear Mr Seykota,

Thank you for your response. As I am quite young, and yet to really achieve significant in my life, I am not entirely sure what my skills are exactly as yet.


All that I do know is that ever since I can remember, I have maintained a rather stubborn belief that whatever might be inside of me, I possess the ability to achieve whatever I commit my mind fully towards.


The service that I have dedicated my energy towards over the past 11 months, and will continue to do so with an unwavering persistence, is to learn, improve, and do the right things in approaching my goal.


I will continue to work on myself, to obtain a state of mind most conducive to learning about the movements in the markets, as well to producing a stress-free trading experience.


My biggest obstacle in trading, which remains to this day, has been my high level of self-belief and competitiveness, where my biggest challenges haven't been with regard to market analysis, but rather altering my beliefs to put myself more in tune with the opportunities available in the flow of the markets I choose to trade.


Essentially, my energy has be devoted to being in a constant state of learning, and moving progressively closer towards my goal.


I have been willing to change a lot of my preconceived notions, and have at times been concerned that I've been meddling with my mind too much (so much so that I do feel like a sponge sometimes, if that makes any sense), however I am prepared to do whatever it takes, and I if I am mistaken with some approach and am always willing to alter my course.


In some ways this has been similar to my trading of late, where I've been, at times, too open to admitting a trade isn't working and changing course too quickly - sometimes it pays off, other times not so well.

I think it's important to note that my trading is largely discretionary, and I am constantly using different methods based upon my analysis of the market conditions.


I have been looking at live charts for 8-12 hours a day since January, in addition to everything else, so I do feel somewhat confident in my ability to identify the overall conditions - but perhaps I am wrong in my sentiments here. With regards to market analysis, I've never been comfortable with using what is written in commonplace textbooks, and even if someone such as yourself is providing market analysis insight, I do feel the need to investigate it, and alter it somewhat to make myself comfortable with the method (unless I am bored; this is an emotion I struggle with a lot in life as well, but I won't get into that issue).


I've always been like this, especially when it comes to mathematical proofs, and philosophical ideas, and I guess it's translated to my trading approach.
I'm not entirely sure if this is the direction of response your were looking for, and if I haven't expressed myself clearly please let me know how I can address your question better.

Thank you so much for your time.

Kindest Regards,

Thank you for sharing your process.


You might consider taking your feelings about <stress> and <boredom> to Tribe.




While You are Experiencing Boredom


one thing you can do


is to notice


its positive intention.



Clip: http://www.helpmyhurt.com/wp-content/uploads/2008/05/breastfeeding-nc.jpg

Monday, December 8, 2008


Breasts, Management and Embarassment




I report a Rock process which, as I see it, did not work.

After I work on the feeling “I feel angry due to xxx” two weeks ago, I feel a pressure on my stomach for several days. I know the feeling well and I deeply dislike it: it is “fear”. I bring it to the Hotseat. I quickly develop a form (bending my wrists and ducking).


As I do not progress through this form, other forms appear: “turning around until I feel dizzy”, “applauding” and “I do not reach the feeling” (feels like swimming in an oil barrel).


My Tribe encourages me to work through all forms; after I complete all of them, I work on the “fear” form. I see myself as a little child, maybe 2 years old or younger; the situation includes a person which I love and large female breasts.


Curiously, the previous day I talk to a member of other Tribe, who comments how they carry out the Rock process: as an example, he mentions a Process in which also large female breasts played a substantial role.

During the hot seat, I revive the stress of the situation and my helplessness.


My Tribe members did not carry out a Rock process yet. I find myself in the not recommendable situation of being on the Hotseat and telling my Tribe what to do…

I ask them to lead me through several events in which I felt the same feeling. I find them and recognize the futility of my reactions. In these situations, I concede what the others want and do not fight to defend my opinion. I see how the Rock rules my life and feel an urge to get rid of it. I look for the donor of the Rock: it is absolutely clear who it is.

Before I give the Rock back, I instruct my Tribe to write the resources which I want to have: To say no, to fight back, to refuse cordially, to be aggressive and show my anger, and also to concede. I for-give the Rock to the donor and receive the new resources. As I do that, I realize that even a baby can bite, scratch or cry until the aggressor leaves him in peace. Before for-giving the Rock, I was not aware of these possibilities.

My Tribe provides me the new resources. I test them in my head in all situations which I remember (4 or 5) and it works very well. I feel a deep vibration in both wrists and hands, lasting for several seconds: it is a bizarre feeling. After that, I am exhausted. I repeat all the forms: They are really joyful and I can integrate them into a single form. Each time I reproduce a form, I develop the composite and feel released from tension.

In this process, we use several elements of the Rock process, but not others: I use the Form and freeze it to find the original problem. I find several situations in which I apply the Rock. I identify the donor and see how the Rock rules my life. I for-give the Rock and learn other resources.


But I do not receive the resources as an object but as recommendations and we do not do role playing. I like this part, because I really do not want my Tribe to learn about the situation which generates the Rock.

The following week I feel uncertain about the success of the process. I face some situations in which I also concede and do not act in my best interest.


I still feel the “fear” pressure on my stomach. I still do not like it. A week after the Hotseat, in our next meeting, I decide to revisit the feeling. It is the same form, bending my wrists and ducking, as intense and ugly as before.


This time, however, I have other memories including my father hitting me and feeling lonely and afraid as a child. I do not “see” the previous event with the large breasts. I work on the form again, until I enjoy it. The next morning I feel lonely and afraid. My wife, seeing my desolation, comforts me. I feel much better, but also realize how she medicates my feelings.


I go to the cellar and, in darkness, try to feel as lonely and afraid as possible. I want to remember this feeling to work on it in the next Tribe meeting.

I read about the fast and substantial results of Rock process in other Tribes and observe that, this time and for me, it did not work.

I appreciate, as always, your insights.

Per your comment “You want to start a religion”: I rather want a Tribe of 6 or 7 members who are really committed and willing to reach their highest potential and to help me reaching mine.

Per visit to IV: I will be in (other country) and not able to visit you between January 29 and February 12.

Thank you for sharing your process.


You might consider taking your feelings about <wanting to manage the process> and <wanting to hide the details> to Tribe.


TTP does not require revealing specific details.




Mother and Child


connect naturally

in many important ways.



Clip: http://www.helpmyhurt.com/wp-content/


Sunday, December 7, 2008


Nice Catch - Funny Video




I just HAD to pass this along - I know I have a twisted sense of humor sometimes, but, I think this is funny and wanted to share a smile or giggle or lol or LOL or ROFLOL



Yes. People who find their own special gift, who practice it until they get it right, and who dare to share it with others can accomplish amazing things.

Sunday, December 7, 2008


Catalog of Emotions



TTP handles all this. Based on years of tribe, this seems a fairly accurate depiction of typical layers of knots.


Thank you for sharing your insights.

Saturday, December 6, 2008


Important Reminder for Men - Funny Video




With the holidays coming up, go to this site for a refresher in shopping fundamentals.




OK. Thanks for the URL.

Friday, December 5, 2008


Wants to Help Extend TSP


Dear Ed,

I'm a member of the local trading tribe since October. I attend tribe meetings to be the best father and husband I can be. I'm also determined to live right livelihood, to improve my trading skills and to improve my ability to express my emotions through my music.

Although I know of your website for several years, I'm not ready to be a student until July 2008. Thank you, and FAQ contributors, for providing me with an excellent trading, psychology and personal growth encyclopedia of nearly 5,000 printed pages!

I notice strong emotions within myself. I find this new awareness of emotions is sometimes illuminating, sometimes exhilarating and sometimes confusing. I am serially remembering previously forgotten childhood events. I notice positive change in myself. I make new contacts for help along my journey, something I hesitate to do before. My 20 month old son always shares emotions and never hesitates to ask for help.

I'm applying to the Associates Program with the intention of collaborating with you directly. In return I offer my help to advance the TSP work. I attach my bio, my results summary, and Excel & C# code for all of the currently active TSP exercises. Completing the exercises is challenging and fun.

Thank you for sharing your knowledge and music.

I wonder if you could tell me a little more about some specific goal or result you would like to manifest for yourself.

Friday, December 5, 2008


Daddy's Little Girl - Shouts Out Her Love


Maybe you remember our conversation about shouting children. My daughter, our second child and 8 years old, has frequently tempers, and yesterday, after our conversation, she starts shouting again.


I used to shout back “Do not shout that way”!, or send her out to the garden. After starting TTP, I used to accept her shouting and her anger and let her get her steam off. This time, I remember your advice and decide to support her in shouting, but first I ask her if she agrees: to do TTP without explicit consent is like extracting a tooth without asking the patient. She agrees and shouts louder.

As I encourage her, her form changes to “hit daddy”. She starts hitting me with her tiny, lovely fists. I encourage her further. I realize that she has a lot of energy for her age. It goes “Go ahaed, yes, fine, ouch, ouch, yes, crank it, ouch ouch, fine, world class (oh God let her spare my testicles), yes, yes, ouch ouch”. I realize that this poor child has been waiting for years to release her anger at me: now, more mature and experienced, I am sorry of things I did to “educate” her and to teach her manners…

After a while, she says “Daddy, I like this hitting you!” and hits me further. After an eternity, she stops and sits down. I feel the release of tension in my own body, exactly the same as during a process, when Hotseat completes a form. I assume that she is ready.

Later, this shy, contact-avoiding and under-demonstrative child hugs me and says “daddy, I love you” (in fact, “ich mag dich”, not “Ich liebe dich”). I am deeply surprised. When I bring her to bed, she kisses me, spontaneously, on my forehead: a novum.

Ed, I love this new way! Thank you for sharing TTP with us!

Thank you for sharing your process.




Father and Daughter


an amazing opportunity for both

to learn, to teach, to grow

and to love.


Clip: http://www.termlifeoptions.com/

Thursday, December 4, 2008


Monster Crash - Comedy Video



You may find this amusing.


Thank you for the URL.

Wednesday, December 3, 2008

Legal Drama

Hi Ed,


I am a Workshop graduate (5/04 and 1/06), and I started the [City] Trading Tribe. I am also fortunate enough to participate at two Breathwork sessions (12/04, 8/06) at your house, and they are all unforgettable experiences of my life.


Many thanks. I am writing to ask

1) if you can let me know some info and

2) if you would consider some proposal our Tribe has for you due to a crisis situation we are facing.


Our Tribe has grown to as many as 11 members earlier this year, before the financial crisis forces some members to move out of the city/country.


Right now we have 7, with a new one planning to join. We meet every Wed evening. One of the members is gracious enough to let us use his office.


He is also a Workshop graduate (10/07). After attending the Workshop he told me that you have participants signed a legal document to acknowledge that their participation is fully voluntary, and will not sue for any possible damage or liability.


He asked another member who is also a Workshop graduate (1/07, 7/08), to contact you for a copy of that document, so that after some minor changes we can sign it as well and remove the bank or person from any liability.


He then gave the 2-page documents for the bank's preferred lawyers to review, and they gave him back a 6-page document with some additional clauses.


That was several months ago. We had our meeting tonight, and he informed us that he just received the bill from the lawyer. Shockingly, the charge was $19,193.40 (after a 10% "discount") for 36.7 hours of work.


Obviously, nineteen thousand is orders of magnitude out of the range I'd expect for reviewing a 2-page document, and had we known the cost, we would have simply moved to another venue.


I notice that it is our collective intention that leads us to this result. (Yes, this triggers LOTS of feelings) I am aware that we are responsible for everything that happened. I also notice that there is no free lunch and we need to pay for the service.


(When I first hear the figure, I feel stunned but somewhat "ridiculously funny." That changes after it sinks to mind that we need to foot the bill, and I then feel my head very heavy and my eyebrows tighten (my natural response when I don't like something), even a bit upset and "trapped."


Interestingly, this seems to resemble our country's current financial situation, where the figures from the government bailouts seem stunning and "ridiculously funny" - until it hits that as taxpayer I am footing the bill)


When I set up the Tribe, I adhere to what you say on FAQ that it is 1) not-for-profit, 2) absolutely free to participants, and 3) at the risk of the presenters and participants.


Now, fighting for our Tribe's survival and continual operation, here are my questions:


1. Instead of "absolutely free", is it OK for us to continue our meeting at the [City] Tribe if we charge members, say $20 per meeting, in order to cover the legal fee?


2. Is it possible for you to provide me with the name and a contact person of the firm where you get your legal document?


And would you mind letting me know how much do they charge you? I'd like to find out what I can expect as a reasonable figure for this kind of service.


3. Our group discusses transforming this crisis to an opportunity, as we can apply real-time what we've learned (e.g. snapshots), since now we all have a clear group snapshot of raising the money to pay the bill.


We wonder if you would consider some business proposal such as if you are willing to come to [City] to either conduct a tribe meeting and/or host a Workshop?


The former would be just an afternoon or an evening, while the latter over the weekend under similar format as Reno's. In both cases, we would charge participants to help us pay off the legal fee.


To us, this is not for profit but for survival, and netting out cost and fees, it is for you to keep all the excesses if any.


4. We also wonder if we hold any fund-raising activity, may we have your permission to disclose that the money is for the [City] Trading Tribe?


I greatly appreciate your answers, feedback, and consideration of our proposal. Please feel free to call me at any time.


Alternatively, is it OK if I call you to follow up? If so, please let me know when's a good time? Many, many thanks.

Thank you for sharing your process.


You might consider taking your feelings about <uncertainty> and <intimacy> to Tribe.


When you medicate your feelings about uncertainty and intimacy with legal agreements, you risk elevating your issue into legal drama.


Lawyers, in general, don't use SVO-p, don't connect on a feelings level and are useful mostly in negotiating the amount of legal control one party has over another.


At this point, as I read your account, the issue seems to revolve around the agreements your friend has with the bank.  I am not clear how any of this is your problem.


Let me know how this one evolves.




Ducks Strut Around


and quack about this and that,

and then present their bills.


Perhaps they learn

how to do this

in law school.



Clip: http://www.lifesolutions.us/images/


Wednesday, December 3, 2008


FireFox and Explorer


A reader notes tiny-print effect which Ed does not observe. Ed may be using Internet Explorer. I attach a screenshot of FAQ in FireFox and IE. For scale, a DOS window is in the background. I paste below the line of HTML that excites this mode. It occurs many times in FAQ pages. Note in particular "font-size:x-small."

<td valign="top" align="left" width="296" style="font-family: arial,sans-serif; color: #000; font-size:x-small; text-decoration:none" height="35">

Thank you for the catch.


I wonder if you have a patch for this code.

Wednesday, December 3, 2008


Wants To Work and Learn

Hello Ed,

I know this email does not have any sense but I guess I will give it a try anyway.

I am 22 years old guy from [Country]. I have been studying in College here in the United States for almost 2 years but I unfortunately I cannot continue doing it because of some scholarship issue.

I started then to try to be a day trader, it is almost a month and I really like it.

I found out about you in many many books and I think your approach to trading is the best in my opinion.

What I am asking in this email it is that I really would like to work for you or maybe, to learn from you.

One thing I know is that being a professional player taught me that the greatest possible option in life is that to learn from the best in any field you try to go.

I don't now what is current situation of office and where you are situated because all the research on the Internet are old and you probably will not answer to my email, but I really like the world of trading and I feel I can learn fast.

I attach my resume in case you wish to give it a look.

I wonder if you can be more specific about what you wish to learn and what kind of work you wish to do.

Tuesday, December 2, 2008


Trading and Mentorship

Hey Ed,

I found your story inspiring.

I was drawn to your psychological approach to trading and life, primarily.


The belief system is a sacred component defining success and failure in us all. You understood that years ago.


Historical reactions (emotional) structured through experience carry themselves into our future endeavors, so as to diminish the authenticity of our current actions. So, we are really just some holographic aspect of our past - our old self - operating in an ever-changing, complex and uncertain reality.


It's our old thinking that is utilized as an interpreting medium to derive meaning and understanding, creating a false-sense of who we are, but more importantly acting to keep us contained, limited and safe.

These principles of reaction and interpretation, pattern behavior and conscious evaluation of myself, dominate my trading system and feed my primary algorithms which are based on quantitative strategies and broader theme's.

I'm 29, from [City], and have been trading for several years. I made my first investment at 18 and have since grown and expanded into this passion.


I'm looking for mentorship at this point in my life. I'm looking for additional structured guidance from an experienced Pro.

I understand you offer Workshops annually. Would you have any interest in helping me outside of this, in any way?

I have a unique background and interesting life experiences, and lots of potential that I want to actualize.

If you have any interest in this endeavor or have any helpful suggestions, I would be grateful to hear from you.

Thanks for your time and energy.



You might consider starting your mentorship  by defining something definite that you like to do and that you wish to share with others.


Tuesday, December 2, 2008


Positive Intention of Worthlessness



I enter a trade. The trade goes against me. I feel upset. I feel that I can not make good decisions. I feel worthless.

I try to search for a positive intention in this feeling of worthlessness.

I observe that if one is worthless and cannot make good decisions, it doesn't matter what decisions one makes, or if he makes decisions at all. It absolves him of responsibility for his decisions. Feeling of worthlessness justifies inaction and staying with a losing trade.

I look forward to my first TTP meeting this Thursday.

Thank you for sharing your process.


One positive intention of worthlessness is to motivate a migration to another method.


Here are some examples of things trending toward worthlessness. Currently, you can buy ...



100,000 Rupiah for $11


500,000 Dong for $31


10,000,000 Dollars for $4


50,000 Rial for $5


50,000 Dobra for $3


10000 Franc for $2



Clips: www.portfolio.com

Tuesday, December 2, 2008


Wants to Join IVTT


Dear Mr. Seykota,

I am a trader/investor living in [City]. I recently found your Trading Tribe website. I am reviewing the FAQ and have read the excerpts of your Trading Tribe Book. I am very interested in your comments about "Relentless Validation" and "Feelings in Modern Culture" (page 15). I am interested in your Incline Village Trading Tribe because I feel isolated and in need of community. I am also interested in finding a trading coach because I think I need a new methodology (system).

I have been trading for over 20 years with mixed results. I am still struggling with some of the same problems I had in the early days of my career.

My CV:
BA, mathematics, [University], 1985
Market maker, [Exchange], 1987-1993
Options trader, [Firm], 1993-1995
independent trader/investor, 1995-present

Thank you for your attention and feedback,

Yes. I am currently extending IVTT to include presentations on systems design.


If you can commit to attending a dozen meetings,

and to working on yourself and on projects between meetings, your association might be beneficial to all.

Monday, December 1, 2008


Rising Trend in the Use of Force


On Friday, October 31, 2008 Ed replies "you might consider taking your feelings about <your father> to Tribe".

I am talking of a socio-political trend and your answer regards my feelings about my father. Mind your head!

Your statement from October 31:


I appreciate any tip.


Thank you for following up and demonstrating your appreciation.


I wonder if the phrase you use, "Mind your head," might be something you recall your father saying.

Monday, December 1, 2008


Rocks Process



In my email from Saturday, November 8, 2008 (Our Tribe Rocks), I described our improvised version of the Rock process. We do not use some components of it like role playing or strongly irritating Hotseat during the evocation of the situation.


In our version, everything happens in the sender's head: I do not even know the origin of its problems. However, I can report that also our version of the Rock process is effective. Most likely the sender's desire to change and our intention to support the process are decisive for results.

The issue was <Insecurity>. It has been 2 weeks since the meeting, and Hotseat reports a clear change in behavior. In recent stress situations, Hotseat shows an automatic and satisfying response, showing limits to other people and not getting involved in drama.


In more severe confrontations, Hotseat reports “seeing it coming”, making a reflective pause and thinking about the situation before applying a satisfying response. I see that Hotseat needs time to implement automatic and satisfying responses in different situations.

Hotseat has suffered from a somatoform disorder http://en.wikipedia.org/wiki/Somatoform  for more than 10 years. This disease is very difficult to treat: in about 80% of the patients, therapy does not lead to improvement.


Hotseat has been in treatment as inpatient and also participated at psychotherapy for about 2 years without improvement. In the third meeting, Hotseat sees the origin of the problem and, more important, it realizes that the symptoms are very old friends and it is very difficult to separate from them.


This insight is incompatible with most psychological theories which I know. Hotseat reports that in the last 2 weeks it had substantially less pain; it also identifies the situations which result in pain surging and can (quote) “reject the pain as an old, but not good friend”.

I discuss Hotseat and its symptoms with the vice director of our Dept. of Psychiatry, an open, nice and intelligent guy with a lot of integrity. He is surprised about the “case” and wants to read your book.

I ride this trend until its end.

Thank you for sharing your process.


I am happy to see TTP working its way into mainline therapeutic environments as a compliment to other methods.


I encourage you to continue pressing forward with your explorations and innovations.

Monday, December 1, 2008


Critical Damping


Hi Ed,


Thank you for the Essentials Card: it's a great device to remind me what to focus on.


I wonder if you have news about the new book you are working on ... I find very interesting the question and answer dated October 26, " How Much Is Too Much Speculation": I experience an AhA reading about tracking servo. Maybe there's space to deepen this issue.


When you say: "The most efficient design for a tracking servo generally includes some overshoot. For more on this, look up "critical damping."


I think that a critical damped system return to the equilibrium point in the shortest amount of time and without oscillation.


In this way, no overshoot happens. Instead, it can be referred to an under-dumped system. Do you agree? As always I appreciate a lot your availability, that encourage me to give my little contribution.

In the design of servos, such as thermostats and tracking devices, the optimal amount of overshoot depends upon your definition of the "objective function."


Similarly, in trading systems design, the optimal parameter set depends upon your definition of the "bliss function."




Step Response

at various damping factors



Clip: http://www.ae.utexas.edu/courses/ase463q/