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June 01 - 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.



Fri, 13 Jun 2008


Danke Schon

Dear Ed

My (German) girlfriend just your Whipsaw video and said you were "sympatische". She's not at all interested in trading but I think she appreciates a good sense of humour, so thank you for that.

Aside from all the material you have prepared in the TSP pages, what I found extremely helpful were the Trade Log and Equity Log files on the Donchian page. Seeing an actual log in each case gave much guidance at a crucial stage in the system design process.

In appreciation,

Bitte schon.

Thu, 12 Jun 2008


Analysis Paralysis

I have not written anything for awhile. It seems that I am researching ten stocks at once which often pushes me into indecision paralysis.


High conviction ideas are hard to come by, though we recently found a few which I’ll write about soon. We are stress testing our portfolios for two additional risks which makes stock selection even more difficult:


1) extremely strong balance sheets – today’s recession, which is a consumer driven one, may last longer than the ones in the past. Thus as I mentioned before access to capital markets may turn into a privilege not a birthright. I want to own companies that don’t have a burden of debt and preferably suffer from a burden of cash.


2) normalizing profit margins, which in most cases today results in lower earnings and higher valuations.


You might consider taking your feelings of <wanting to figure it out> to Tribe as entry points.




Fundamental Analytics


often include an immediate cause


and exclude the overall system.



Clip: http://www.thetimes-tribune.com/site/


Thu, 12 Jun 2008


Wants a Discount

I know it worth every penny but do you offer any student discounts by any chance? :)

Thank you Ed,



You might consider taking your feelings of <wanting to get it for less> to Tribe.

Thu, 12 Jun 2008


Second Hand Feelings

Hi Ed,

I don’t like being told what to feel, being awarded ‘employee of the month’ makes me excited for a short while but in reality I have flaws and they are overlooked when I am rewarded, it hurts me on the long run to forget that I can improve for the sake of cheering for a short while.

I agree with compounding profits but we must also mention the losses because only then we can know the net result.

The point is celebrating for something makes me forget about the reason and get the short term thrill of feeling success as ‘money’ or ‘free parking space’ or ‘printed certificate’; as opposed to feeling success as a group as a result of a systematic process which by celebrating reminds us of the whole picture and gives us the excitement of knowing our part is significant as part of a bigger success as a group.

You might consider taking you feelings about <having to be perfect> to Tribe.




Some People See This Lady


as an opportunity

for a meaningful long-term relationship

supporting right-livelihood.


And some people don't.



Clip: http://sexybeautifulwomenlingerie.



Thu, 12 Jun 2008


Family Members in the Tribe

Dear Mr. Seykota,

the Community is helping me a lot our new Tribe. I consider inviting my wife to participate at it. I do not intend to suggest it to her nor think that she needs it, I just love the idea of sharing the experience with her. I appreciate your thoughts about family members participating at Tribe meetings.

Sincerely yours,

You can take your Tribe principles into your family - or wherever you go.




Yu can Take Your Family to Tribe


and you can also


take Tribe to your family.






Wed, 11 Jun 2008


Why Why Why

Dear Ed

I sit here at after the UK close after the FTSE has fallen around 3% today and around 11% from the May peak.

I sit at a print out I did late last night it shows a falling market for a few weeks with lower lows and lower highs below any of the hundreds of lags you could put on it and pointing quite simply, down.

I read on the chart that I printed last night:

“Downtrend in nearly any time scale and making new lows every couple of days, in a down channel. If yesterday’s lows give way it could fall a long way quickly”.

I get up this morning and place a sell stop just beneath the low that I feel shows a breakout. A buy stop above the last ‘significant’ high is also placed.

The order get’s hit, I am in profit, almost as soon as I am I exit.

I get “pissed off” I’m not in so I decide, hey it’s gone “too far” so I buy it, no system no nothing.

It falls like a stone, I add, it falls more I add, I exit at the uncle point.

I lose around 25% of my account in little over an hour.

I feel hurt(?) angry, frustrated and strangely satisfied.

I guess I got what I wanted, but if I did why am I crying, a grown man of 27 sobbing at his computer.

“Why?” questions are banned I know but all I think is why? Why? Why? and call myself things in my own head.

Thanks for providing this outlet for me.

Kind regards

Thank you for sharing your process.


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




FTSE 100


In trading, as in life

people figure a way

to get what they want.


Red circle shows day of trade.


Tue, 10 Jun 2008


Wants to Short Real Estate

Dear Mr. Seykota:

A few months ago I decided to retire (at 44) from practicing medicine to trade. Part of the motivation for my career change was my experience working for a small securities information service before I went to med school. There I used Oracle software to crunch historical data about muni-bond and corporate debt. I was bitten by the trading bug during this time and have been trading since then. However, I was an active-duty Navy medical officer, which made it hard to trade, especially during deployments to the current war.

Since leaving the Navy, I have been researching different approaches to trading. I decided that trend following fit me the best. I just finished Trend Following and decided to take seriously Covel's recommendation to meet and learn from experienced trend following traders. I was the most impressed by his description of you, so I investigated the Trading Tribe website. I found I like your approach very much because of your emphasis on emotion and the similarities between your approach and Buddhism, which I try to practice. I say try because I don't meditate as much as I want to. I think this has to do with a lot of unacknowledged feelings -- hence my interest in the Trading Tribe approach.

Let me add that the specialty that I practiced was psychiatry, so for me it's a foregone conclusion that my trading results will have everything to do with psychological factors -- "getting in my own way" -- and I believe it's essential for me to join a Trading Tribe. There is one where I live (San Diego) so I have contacted the leader to see if it is still meeting (on your website it appears that there aren't any members other than the leader).

Here's an illustration of my typical reaction to a "trading" situation. My wife and I want to move to Dallas, where she has some business opportunities (she is a CPA but is a natural entrepreneur). As you know, the trend in the housing market in Southern California is down. I have been complaining to my wife that we will have to take a loss on our house (by the way, there are no problems with mortgage payments, etc.) in order to move -- either by selling at a loss or renting with a negative cash flow. She created a great decision (move/don't move with different options -- sell, rent, etc.) spreadsheet that definitely counters my fears.


Nevertheless, I am caught between wanting to move and not wanting to take a loss. Sounds like a lot of "investors" who hold onto a losing trade instead of cutting losses. Trying to think like a trend follower, I realize that I should cut my losses here and move. I wish there were a way to short houses (other than shorting real estate ETFs that are trending down)!

I am certain that this kind of situation will appear in my trading, so the Trading Tribe approach is a must for me. I tend to agree intellectually with a system but doubt it at the same time yet ignore my emotions about it. I really admire Livermore as he portrays himself in Reminiscences of a Stock Operator and would like to approach trading (and life) like he did.

Anyway, this is all by way of introducing myself. Thank you for running your Trading Tribe program. I'm looking forward to it.




The real estate issue: I discovered that there are futures on housing markets. AHA! (Clearly, I don't know much about the futures markets, so I'm studying Schwager's book).


Mon, 9 Jun 2008


National Anthem - WOW!

Texas Tech University basketball game, February 9th, National Anthem sung by 5 young ladies (ages 6-8).

You are never going to hear it performed much better than this! An entire arena remains completely silent throughout the entire song.

Please take the time to enjoy this.


audio-video file

Thank you for the video clip.

Fri, 6 Jun 2008


The Essential Card


Thank you for the essential card and a nice two dollar bill. I like them both very much. I like these six essentials to be part of me, so they call me anytime they like.

This is the first time I see a two dollar bill. I don't know where to put it. I like to read books, so I decide to use it as a bookmark.

Always Thankful.


Thu, 5 Jun 2008


Takes Frustration to Tribe

Last week at the tribe meeting I went into the meeting feeling both mad and frustrated by many things that did not go the way I wanted them to go the last few weeks.


One of my key employees pinched a nerve in his neck and the doctor told him he needed an operation and could not work for at least 3 months right in the busiest time of the year for my business.


Another employee was not performing up to expectations and more things happened that I did not want to happen and judged as being bad.


So I took the hot seat expecting to fully experience all the frustration and anger I was feeling. As I went into my forms what I noticed was all these judgments running such as "you look like a 2 year old just throwing a fit, that looks stupid, how long are you going to keep doing that, what do you really think you are going to accomplish by doing this" and more.


At first I argued back that I was going to keep doing it as long as I wanted just because I want to and then I kept at the forms and finally just let the judgments be OK but not stop me or interfere.


It was like everyone who had ever criticized me all pilling on at once but once I quit resisting them it became ok to just do what I was doing.


This last week has felt much better. I feel more free than I have felt in a long time and I am noticing the judgments that pop up out of no where and all the times I resist when things do not go the way I would prefer them to go.


The interesting thing is that if I just notice it all and let it go, things seem to work out just fine without me having to thrash around doing all sorts of things. I starting to wonder to what degree that I have been stirring around and just making life more difficult for myself when all that was not necessary at all.


I have to thank my tribe because I do not think I would have been able to get this all by myself.

Thank you for sharing your process.



Violence is One Way


to medicate (avoid experiencing)





Clip: http://www.seedsofunfolding.org/


Wed, 4 Jun 2008


TT Essentials Card



Thank you.


Even though we have never met, you are a special person in my life.

Thank you for your support.

Tue, 3 Jun 2008


Whipsaw song

Hey Ed,

Congrats on the success of the Whipsaw Song ! I looked at it when you sent us the e-mail right after you first posted it – like when it had about 4 views. I just checked it again and was astonished to see it has nearly 22,000 views !


Oh my gosh, congratulations !

Thank you for your support.

Tue, 3 Jun 2008


Systematizing Intuition

Hi Ed,

Following are rules which "I think / percept" at "various points" work "well most of the times"

1. Gloat: Trends tend to reverse when position holders start to gloat.

2. News: Markets do not react to a news to which they should in a certain way (popularly believed way or "consensus belief"), it goes in the opposite direction.

3. Consensus opinion: Consensus opinion is seldom right. Although right, move may be delayed. ("Aha" explains this)

Plenty of more like these which I have learnt by experience of about 8-9 years. I am 27 now.

These, on "gut feel", work very well and can be immensely profitable. The problem is sticking to a system which does not have all these rules and neither do I (and not sure anyone can) "know" how to program these into the system.

A. Any idea how do you make use of these feelings profitably?

Feelings like these push you away from sticking to the system.

My solution: Have a small separate unrelated account, where you can trade like this and try and be profitable the way you like and perhaps enjoy. Let out your feelings while controlling them etc. Thus the main account is untouched by emotions as its much easier to stick to the system now as I have a new account to ooze out my performance and LET GO.

B. What do you think of my solution in dealing with pains and joys of sticking to the system?

If your system includes methods that employ intuition to trade against popular trends you might consider making sure it also includes methods to keep your intuition clear.









Into Wishing








Mon, 2 Jun 2008


Two Oil Covers

Hi Ed,

two covers on oil ! But there're a lot of news about crude oil almost every day in the last months and it seems not enough to stop the ride: now I'm curious to see the effect of these publications.





Magazine covers tend to manifest the current concerns of the society - and to signal awareness (conscious discount) of the situation.

Mon, 2 Jun 2008


Joining a Tribe


Hello, I have been educating myself in learning to trade and I would like to know if you have a "tribe" who meets in [City].



You can consult the Tribe Directory link, above.

Mon, 02 Jun 2008


Berliner Stamm

Dear Mr. Seykota,

I start a Tribe in Berlin, Germany.

Yours sincerely,









Sun, 1 Jun 2008


Cross-Pollination with IV Tribe

Hi Ed,

I have my brother with wife visiting - doing a lot of sightseeing, hence the delay ( luckily I was in the office today to get something and see your mail, as my last day was Friday).

I have the tickets already - I am in San Francisco on the 2nd - in the evening.

I am keen to learn about the rocks process.

I want to address my procrastination issue, which manifests itself in multiple environments and levels. Sometimes, when I want to do something, I seem to be finding excuses, explanations why I should postpone the action, often giving myself a deadline on the next day / week and seem to find new excuses to postpone the action further.

Even now, when writing the mail, I think I should be in a more alert state to write a proper mail.

When working on my system I give myself a deadline to come up with rules, after I do come up with the rules, the conditions are met next day, I think I need to do more analysis and improve the signals further.

When I come across something I don't understand at work, rather than ask someone I prefer to figure it out on myself and not ask, although asking would benefit everyone - I think I shouldn't disturb them, I don’t' want them to think I'm asking about trivial things etc - maybe I'll ask later when I'm still stuck.


New issues arise, I fall behind with the work, people start asking for results. Then I get a sense of urgency and feel like being pulled in different directions, squeeze my eyes, start sweating, rub my neck, clench the jaw, get impatient with people, start talking fast and shorten the sentences, jumping from issue to issue.

When at work, say I need to get a signature of my boss on a document or trade blotter, I go towards him; I see that he's looking at his screens, Outlook on one screen, YouTube on the other. Although it's pretty clear he's looking at YouTube rather than writing an important mail I think I shouldn't disturb him, now is not the best time, I should do it later, so go back to my desk.

After I talk myself out of doing something I feel down, sad and disappointed with myself, feel tension on my face, especially around the eyes, feel like taking on some weight on my shoulders, want to curl down and want the day to finish. I feel like I serve others more than myself.

This issue might be made of a mixture of issues: impatience, indecision, lack of confidence and self-esteem, overanalyzing...

I think of myself as a successful person, those issues aren’t’ preventing me from having a good life, but I do want to improve.

Can you recommend a decent / modest B&B in Incline Village ? I'll stay in IV overnight.

You might consider taking your feelings of <shyness> to Tribe.





The Positive Intention of Shyness


is survival.



Clip: http://dating-tips-and-guides.blogspot.com/