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July 1 - 14, 2008


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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)


July 13, 2008


Wise Acres




I enjoy reading FAQ since it is a great resource to improve my trading results. What I enjoy most is your humor and wit. You may be the grandest wiseacre I have come across :)

I notice that FAQ's regarding public education generate strong feelings in you.


I think the biggest problem with our education system is the education is "free" and people get what they pay for.


Wiseacre disclaimer: I know public education is really paid via property taxes, but parents, teachers, administrators and students would be responsible for higher standards in a fee based system.


Just a thought.

Thank you for your support.  In my opinion, all the best teachers are, at heart, wise acres.


The educators below include a fierce fighter for freedom, someone with deep insight into the human condition and someone who dares to tell the truth.


Perhaps you can sort out which is which.


I  support you in expressing your concerns about "free" education.  I'm just glad we don't get as much of it as we pay for.




Milton Friedman

July 31, 1912 – November 16, 2006


dares to support free enterprise.




George Carlin

May 12, 1937 - June 22 2008


dares to say seven words.




Richard Feynman



dares to point out the obvious.













July 13, 2008


Working on the Trading System Project




I reproduced your results in excel with some VB code, but still do not understand how to calculate your PDD and dr-dn. Thanks,

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

High  Regards


July 12, 2008



I'm wanting to test your willingness to allow another a-ha into your life, as it may well prove useful to the entire tribe. The below words do not presume to actually provide the a-ha, but merely to set the stage (if I had all the answers, I woudn't be writing!).

Warning: Change, as always, lies ahead.

Wondering: Since falsehood does not hold up well in any endeavor, I'm wondering how to reconcile quantum reality and language, in particular the paradigm of subject - verb - object, which assumes a fragmented universe, which -- as I know you're very aware -- does not exist.

Background: In the substantially proven concept that is called "the most profound in science," that is to say the 44 year-old Bell's Theorem, there is no such thing as a "local reality," but, instead, only what David Bohm refers to in a book by the same name as: "Wholeness and the Implicate Order."

In essence, Bell's Theorem states (and mathematically proves) that a hidden quantum variable, sometimes called the "pilot wave," instantaneously connects everything at once at superluminal speeds...in the Now (that of course being about 5.4 x 10xx-44 seconds in "Planck time").

And thus all, of course, is at-once both oneness and change in the Now.

For consideration: After an appropriate set-up, David Bohm remarks in his book: "Such (fragmented, subject - verb - object) thought was shown to bring about a thoroughgoing confusion that tends to permeate every phase of life, and that ultimately makes impossible the solution of individual and societal problems."

Bohm takes on the fragmented (and therefore false) thinking implied by an object-oriented language (e.g., English) by proposing that a more action/verb-centric language such as ancient Hebrew or Aramaic be used. In particular, Bohm discusses a new mode of language that he calls the "rheomode" ("flow mode").

The practical wisdom in this is that a rheomode more closely parallels what's really happening, and is therefore more truthful than an imagined universe made up of objects, regardless of how much our physical human sensory systems would prefer to argue otherwise.

A-ha in Waiting: Since I imagine that it would be rather lonely (and impractical) to come up on one's own with a modern language construct that more closely mirrors reality and helps to end fragmented thinking, I am thus writing -- in true wonder -- of your thoughts along these lines and any a-ha's that you may be willing to offer us.

High Regards,

I wonder how high you have to be to produce these types of regards.


Upon reflection, I'd have to conclude that it's crackers to snip a rozzer the dropsy in snide ... which, of course brings to mind the saddish connubulation of a vorpal-blade missing its snicker-snack .




The Jabberwocky


Lewis Carroll's poem of nonsense words


translates, remarkably,


to numerous foreign languages.



Clip: http://en.wikipedia.org/wiki/Jabberwocky








July 11, 2008


Rock Process and Bi-Polar

see previous


Ed says; "The TTP toolkit, including the Rocks Process are useful for person who wish to employ them in their own personal explorations and growth.

These tools are not particularly useful for "fixing" other people.

For example, in this case, you might consider taking your feelings about <fixing someone else> to Tribe. "

Thanks for the reply, and especially the mini 'a-ha' it has just generated.


The phrase, "Physician, heal thyself" comes to my mind. Yes, i seem to like 'fixing' other people and your reply hits home very hard. In fact as i read your response again, i experience a strange (and relaxing) feeling of blankness and stillness and an inability to think clearly, I feel very vague right now like i'm in some kind of a stupor . . . I feel just like a vegetable.


Thanks again Ed,


Kind regards,

Thank you for sharing your process.


Feelings or disorientation may accompany deep re-structuring of thought processes.


If you feel like a vegetable, perhaps things are about to turnip for you.




The Man with a Turnip


points the way


with a turnip.


Clip: http://schmidling.com/turnip.htm

July 11, 2008


Language Not Clear




In FAQ, Bless the Speculator Ed says, "Politicians traditionally eventually blame speculators for
the very price increases that their political policies induce"

Do you mean, "Politicians traditionally blame speculators for the very price eventual increases that their political policies induce"?

Thank you for the catch.

July 11, 2008

Dynamic Portfolio Selection

see previous

I agree with you that trying to predict the non-existing future is 'senseless', but i wonder if trend trading doesn't also use techniques that 'were' successful in the past and hence you 'expect' them to work in the non-existing future (--> increasing your potential reward/risk relation).

Okay, I now try to stay in the now respectively try to find ways to deal with this topic by staying in the now.
In your TSP-Trend-exercise you show us a way how to define (one of the infinite possibilities) a trend. I wonder if this could be assimilated into a portfolio selection method.


Say, for example, you want to trade a maximum of ten different stocks. Then you sell your tenth stock and so you are able to buy an other stock. You scan all stocks and look what stocks perform at the best momentum NOW. When getting the list there are several possibilities on how to carry on. One possibility might be to get into the strongest performing stock. Another might be to check with the support-resistance or ema-system whether the system show a buy signal or not.

I am interested what you think about this.

I also implemented the buy-and-hold strategy. Random stock picking didn't indicate an advantage in comparison to the SR or EMA systems but i only tested a few [Country] stocks for that i only have historical data for the last 5 years. I plan to investigate this further with stocks with a wider range of historical data in the next few weeks. The next two weeks i will be busy (7 exams for university).

I wish you and your 'clients' a good time at the workshop. May all the participants get what they want :-)

Yours truly,

Thank you for sharing your process.




Getting Your Language in the Now


is a good first step


towards clarifying your mind.



Clip: http://blog.longnow.org/wp-content/


Friday, July 11, 2008


Out with Gout

I don´t know the words in English, hence gute Besserung (meaning "I wish you a fast and complete recovery from the gout").

Your email with the smiley arrives the night before an important examination. It helps. Thanks.


Thank you for your support.


The miracle cure: H20, in large doses.


Fortunately, I have a pretty good supply out in the back yard.




Lake Tahoe


Clip: http://www.americansouthwest.net/


July 11, 2008


Rock Enroll



I seem to enroll an endless supply of people in my life that do not acknowledge me, or at least not in the way I want.


You might consider the actual way you really want is:


 Having people acknowledge you

in a very special way

so you can claim they don't.


Congratulations on a fine job of training your (non) acknowledgment staff.

July 11, 2008


Wants Tech Support


I just recently found out your site and start your project with exponential crossover system.


I have few questions.


1. What is dr-dn? How to calculate it?

2. How to calculate PDD?

3. What is a Peak?

4. Any or max or some local?

5. And how to calculate Sub_Low?


Thanks in advance,

You might consider taking your feelings about <wanting others to do everything for you> to Tribe.




A Guy's Just Gotta Doo


some things for himself.



Clip: http://bondirishtwins.blogspot.com/


Thursday, July 10, 2008

5 ~ 25 ~ 50 BILLION dollar Banknotes




These Zimbabwe notes remind me of your German currency presentation at the Workshop ...



Source: http://cgi.ebay.com/eBayISAPI.dll?ViewItem&item=200236763005

Several other countries are following similar policies, namely: printing up money instead of earning it.

Wednesday, July 9, 2008


Wants Mentoring


Dear Mr. Ed Seykota,

Hello ... I am working as a stock and futures broker. Before starting this letter, please let me tell you how much I respect you. What you have done in the trading world is one of the most precious things that should be transferred and educated to the beginner like me.

Even though trend following strategy already became such a famous strategy in US, In [Country] that is not as popular yet. But I believe I can apply the trend following strategy to futures trading in [Country] futures too. I want to broaden my sight and to improve my trading skill as trader with trend following strategy.

So I need your advice and knowledge. If you can, please tell me the way to take part in the education course prepared by you or the way to buy books written by you. Because [Country] is far from America, I think only way I can get some advice and education from you is just using on-line system or on-line education.

Yours Sincerely,

See Mentoring, below.

Tuesday, July 8, 2008


Trying to Connect with a Tribe


I’ve been trying to get in touch with the TT in [City & Country] and have received no reply.

Is this tribe still around?

Thank you for taking the time to read my email.

Best regards,

I do not sponsor, manage or closely monitor the activities in individual Tribes aside from posting their contact information - and from what I hear through this column.

July 7, 2008


Back to the Future


I Googled on the name "Ed Seykota" after deciding to re-read Jack Schwager's first book, which I originally read right after it first came out. The Seykota interview struck such a deep chord that I decided to find out more.


I found your website at www.seykota.com.


Most of the pages are dated 2004 or 2005. I am wondering if you are actively conducting this process at this time. Thanks.

Hmmm ... At the rate you are going, you are likely to see this response sometime around 2011.

July 7, 2008




Does Mr. Seykota still mentor people and teach them how to become a skilled commodities trader?


I've been a Financial Advisor for the past several years and I'm tired of only seeing growth from investments when the markets are going up. I'd love to learn from one of the best commodities gurus around.


Some ways you can access this information.


1. Reading through this site.

2. Reading The Trading Tribe.

3. Attending Tribe Meetings.

4. Attending a Workshop.

5. Signing up for Private Consulting.


6. Ignore it entirely.


Of the above, #6 may be the most expensive.

Monday, July 7, 2008


Money Seminar

I’m wondering if you have ever been to a program called [Title]? The reason I ask is because of your book “the Trading Tribe”… what you write about in that book and the groups you have set up where people can openly release. Your TTP and the ... program are very similar in essence.

It has been such a beneficial environment for me personally.

Kind Regards,

Before you enroll in a money seminar, you might check if the presenters have any.




The Promise and Assumption

of many popular prosperity seminars


is that money

can make you happy.




After Reading FAQ, Attending Tribe Meetings

and a TTP Workshop or Two.


you, too,


can look and sound like this.










July 5, 2008


Progress Report




Here is the monthly update on my marathon. I made my monthly goal for distance, which was 3 miles. My secondary goal of weight loss was not met, I stayed flat on weight. This is probably because I wasn't very good about keeping a schedule. I let a number of things interfere with my runs. However, I'm still down 10 pounds from where I started, so I'm not going to worry about the weight as long as it falls this month.

Ed, thank you for getting in me in contact with my trainer, he's been very helpful.

Kind regards,

Thank you for sharing your process.

July 5, 2008


Rocks Process and Bi-Polar


Hi Ed,


Could you please share your opinions with respect to the TTP / Rocks processes and persons afflicted with Bipolar disorder (a.k.a. manic depression). Can TTP/Rocks be helpful in the management of this condition or is there a danger that a person with this disorder, when practicing TTP, may find the intensity too great or too traumatic and then be 'tipped over the edge' into an even more serious mental condition.


Please note that I'm not suggesting that one forgoes 'proper' medical diagnosis and treatment, but merely wondering whether TTP/Rocks can play an additional role in the management of this disorder. (and if so, how so?)


Any comments and opinions you may have will be greatly appreciated.


Kind regards,

The TTP toolkit, including the Rocks Process are useful for person who wish to employ them in their own personal explorations and growth.


These tools are not particularly useful for "fixing" other people.


For example, in this case, you might consider taking your feelings about <fixing someone else> to Tribe.


Bipolar Disorder is also a popular name for poor-teacher-bored-student syndrome. 


The Government School system generally avoids treating this syndrome by firing teachers, and instead treats the students with mood-altering Ritalin. 


With 5% of students now on this prescription drug, the public school system is providing an excellent training for our increasingly medicinal society.






A chemical Solution


for students who complain


about poor teaching.



Clip: http://planetquo.net/Various/ritalin_o.jpg

July 5, 2008


Works Through Abuse Issues


dear sir


back in march i contacted you to ask advice about memories i had from childhood regarding abuse.

i wanted to know if it was possible to remember things vividly when i was 3 years old. I was was in a sorry state altogether and rather sad as i was preoccupied with sadness and my failure to trade well.

you immediately turned the question around and asked me , how i felt about the memories.
this was a revelation.

i though long and hard about my sad childhood . I questioned my motives for contacting you.

Then i had an absolutely huge ahh haa moment .

although there was lots of sadness for me as a child , i realised that the discovery that i was abused at 3 was a revelation .

Suddenly i understood my anger ,sadness ,frustration and hate of the self all made sense . suddenly i knew myself .

I went to a hypnotherapist for some regression therapy . I wanted to know if what i thought had happened to me had happened to me . Although its impossible to say for sure , she also told me it was the feelings that counted .

I feel good . however i have a question if i may .
I always thought that my losing money in the markets was a result of Fred bringing my attention to the unhappiness i always felt in my life .

However i now feel that Fred brought my attention to the past because my trading was not right .


I am not sure if this all makes sense ,however let me put it this way .I thought i couldn't trade because i had problems that needed addressed from my childhood .


i now feel that i can trade and the problems that Fred brought forward where to draw my attention to my faulty trading methods . You see i ignored the trend and bottom fished . I thought i was clever . n up-trends i prospered ,only to give it all back in the corrections .

I think i have now created a system for myself that keeps me on the good side .Sure there are stops and nothing is full proof but i feel a new beginning and a peace inside me that just lets all the bad stuff go .I am no longer concerned with bad history .I am now looking forward.

Sir ,i don,t know if any of this makes sense ,but only from embracing your concepts in the tribe book was i able to really understand the magnitude of the feelings i felt .

Really i just wanted to thank you from the bottom of my heart for helping me really understand the meanings of those feelings .


Only by experiencing them and embracing them ,"even if they where horrible ".was i able to understand the me . After 38 years of not really knowing myself this is a miracle. How ever did you come to the conclusion that trading was governed by feelings ?

i look forward to learning the whipsaw song and playing it with my band .we all like Doc Watson .
I myself have great songs called "long and strong " and ten cent spread .short your love and capitulation."

thank you very much .i feel good about everything

Thank you for sharing your process.


You might consider celebrating your increasing self-awareness by capitalizing your I's.




In Recovery and in Trading


we come to celebrate setbacks


as part of the process.




July 4, 2008


You Tube

In YouTube I find your video and "other related videos":

(1) hot sexy girl get RAPED in this video

(2) RAPE

(3) Turtle Trader Tokyo Speech

(4) Live Trade 04/16/07

(5) etc. etc.

What is the connection between your video and these videos?

The YouTube organization makes these associations, perhaps by some sort of word-matching algorithm.


A whip-saw is a tree cutting device featuring a long thin blade with a  man on each end.


Other meanings of Whipsaw are: (1) a quick counter trend in price and (2) a high-low poker player' situation with a moderate hand in the middle of a betting war between two other players who feel they have a lock on high and low.


The enormous popularity of internet eroticism and the quirks of internet linking strategies may explain the apparently tenuous connections between the videos.


The Whipsaw Song, with about 25,000 plays is doing quite well for a video with smiling people, a happy tune and no naked women.

July 2, 2008




Hello Ed,


I hope life is treating you well.


Tonight I became absorbed watching a documentary on National Geographic channel, focusing on the CCD (Colony collapse disorder) in honey bees.


While most people are obsessing over global warming, it seems to me that CCD is a far more serious and urgent problem looming over the world's food supply. As the humble honey bee is responsible for providing us with free pollination, the ramifications of a world without bees means that pollination must be done manually or in greenhouse controlled conditions.


As all fruit and vegetables rely on bees this could potentially cause food prices to soar and famine throughout the world to increase.


The scientists stated that 30% of bees in USA had vanished and they were having to import Australian bees to do the pollination of their crops. The latest developments resulted in the discovery of IAPV (Israeli acute paralysis virus) which was found present in all the bees in the diminishing colonies.


The virus was noted to be also present in the imported Australian bees. They showed the "dance" that a worker bee performs to show other bees where the best pollen could be located, but noted that many worker bees went out searching for pollen and didn't return, they presume some form of memory loss causes this.


I wonder what this will do to the price of wheat, coffee, corn and other foods if this problem escalates? Your whipsaw video was a nice way to put the rules into plain and simple form, and was a little refresher for me to watch,


I have got some videos on YouTube about one small project I did a while back to make rubber inlet manifolds for a motorcycle restoration project.





Trading has been very interesting lately, here in UK we are having some incredible shorting opportunities in building, property and food stocks, some of which are tumbling 10% every day and making easy profits is tempered by a sense of shock at how drastic the collapse stories are turning out.


Even stocks which were star performers with great businesses are turning into basket cases. It has the feel of a deeper than average recession. Would like to hear your views on this bee syndrome if you have one.

Manufacturing sites, such as you demonstrate in your video, and as appear on the TV series "How It's Made" are the essential productive elements in a society.


As the society matures, people migrate away from manufacturing and toward government.


This acts to reduce productivity, innovation and efficiency.  It also attends inflation.


Similarly, bees are migrating away from individual free colonies-in-the wild and toward strong central government by bee-keepers.


Perhaps Apoidea is tuning in to Under-Fred.




Getting Down to Bees-ness



Clip: http://en.wikipedia.org/wiki/Apoidea

July 2, 2008 


Structure of Society



Here's a picture for Independence Day 2008




Source: http://www.sott.net/image/image/




I notice that in this particular configuration, the leader at the top winds looking at the backsides of the law enforcement officers.

 July 1, 2008


Wall Street Journal Runs Low on News


Ed -


I'm a reporter at The Wall Street Journal, and I'm currently working on a book about the history of quantitative finance and investing.


I'd love to set up an interview with you about your trading history and ideas. It seems clear that you were one of the first traders to tie together the computer and quantitative models to trade.

The book will be published by Random House and will be targeted, hopefully, at a broad audience. I'm trying to tell this history through the stories of the people involved, showing how the market has changed and how they adopted to those changes, or at times helped make them happen.

By the way, I enjoyed The Whipsaw Song on YouTube. (Though I think you might need a new bassist.)

Please let me know if you're available soon.

If you wish to interview me for a book, you might first demonstrate some mastery of the ideas on this website.


Our bassist (formerly a dentist) joins us regularly to play bluegrass benefits for elder-care and hospital facilities in the greater Reno area.  I do not know many "new" bassists with these characteristics.




Tue, Jul 1, 2008


Bless the Speculator


Speculators play a crucial role in a free society, helping reduce market volatility. Yet critics like John McCain scapegoat them constantly. It's time these critics learned some basic economics.

Go here to read the full article:




Speculators help stabilize the economy by speeding up the price discovery process.


To see how a lag can destabilize a feedback processes, you can try to put a key in a keyhole wearing a blindfold, and having a friend guide you verbally.


Operating an economy without speculation is like trying to drive a car with a blindfold.


Politicians traditionally blame speculators for the price increases that their own political policies induce.