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January 15 - 31, 2010


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Contributors Say

(Quotes from Ed in Red)

Ed Says

Sunday, January 31, 2010

Experiencing the Anal Stage

I am learning to embrace the positive intention of the anal stage, especially as it relates to the special gifts I may be able to share with people and get money for.

Assets:              $521,084.77
Liabilities:         $552,143.58
Net:                  -$31,058.81
500oz goal:      $539,250.00

Job applications:   0
Interviews:             4
Offers:                   0

Thank you for sharing your process.




A Stage for Anal Sharing



Clip: http://i.thisislondon.co.uk/i/pix/


Saturday, January 30, 2010

Family is Better Off

Thank you for helping me to experience the feeling of <my family is better off without me>.

You might consider experiencing the feeling of <family is better off if I get a job.>.

Saturday, January 30, 2010

Austin Tribe

Hello Mr. Seykota,

I was a senior equity trader for 15 years at [Firm] in [City].


I am starting to trade on my own and would like to join a Trading Tribe that is near where I live. I have read your Trading Tribe book and I am very interested in what a Tribe could offer.


Are there any tribes in San Antonio or Austin?

Thank you for your consideration.

I am re-locating to Austin and plan to start a Tribe there.

Saturday, January 30, 2010



I was going through you article "Determining Optimal Risk" , along with the contents of your TSP material on Risk.

While the Kelly formula can be used for optimizing the bet size , it requires that we know the win ratio and the winning pay off rate. It is possible to compute these precisely for certain kind of games (coin toss, dice and casino games)


When it comes to trading/investment , it looks to me that these can't be calculated without large errors. If so, is there anything at tall like "Optimal Risk" in trading in the classic sense of Kelly formula?

Trading is not an exact science.


Sometimes you are better off making an approximation to an unknown than to leave it out altogether.



The Golfer Can't Exactly Measure

the speed of the wind.


Nevertheless, he includes an estimate

in with his calculations.



Clip: http://www.ci.new-braunfels.tx.us/



Friday, January 29, 2010

Futures on 25K

Good Day Ed,

I really appreciate all of the information you make available on your site. My question is specifically about position sizing & risk management with a smaller account size.


The forex market offers very small contract sizing (nano lot sizes representing $100 of currency) but the smallest contract size in the commodities / futures arena seems to be limited to mini futures and even then the list of available commodities is limited to a small select group. In order to properly diversify and position size is there an alternative instrument / contract size available for futures trading if you have an account of around $25K?

As the contract size gets smaller, the transaction costs generally increase.


The costs on trading $250,000 worth of currency on a futures exchange might be $25 or about 1% of 1%.



The Cost of trading $25 worth of Currency

at an airport


might be $1.50 or about 6%.



Clip: http://www.thebangkokshoppingguide.com/




Friday, January 29, 2010

Back Testing

Hello support Group,

This is a progress report, even though I don't have as much progress to report as I would like. My commitment was to convert my trading methodology to a testable system. As reported earlier, I have spelled out my trading rules, and created an investment universe to test them on. I have created a variation file also. I have made no progress on writing backtesting code.

There are a couple explanations for this. One is that after creating the investable universe. I resolved to take every signal from that universe. This resulted in holding up to 20 positions vs. the 4-6 I typically held in the past.

It also resulted in making much more money than I would have otherwise! My account is up 7.4% from 10/30 through today, and has handled the pullback in the stock market well.

As George Soros wrote, one of the unique aspects of this business is that when you are doing well you don't have to work as hard, and when you're doing poorly, you have to work much harder. So now I feel like I have something in common with George Soros because I haven't been working as hard on my commitment!

The other factor is that my method requires a lot of mental energy, and being much busier leaves less capacity for the important/non-urgent quadrant.

I thought the pull back in the market this month might result in a trading slowdown, but so far it hasn't.

The most enlightening thing for me is how the variation file highlights the fact that I have thousands of dollars of variation slippage which are preventable if I am always execute at the moment a signal occurs. I make good progress in reducing this number.

If anyone has the code for a Trade-Station program for backtesting anything, it would be very helpful to me in taking the next step of how to organize inputs, variables, if-thens etc. for my own program.

Good trading everyone.

Thank you for sharing your process.

Friday, January 29, 2010

Nelson Tribe

Hi Ed,

Please find attached a TT ID for starting a Tribe in Nelson British Columbia, Canada.




British Columbia

Wednesday, January 27, 2010


Hey Ed,

I'm intending to enhance my trading mindset through affirmations.


As a trader and mentor, are you willing to recommend some key beliefs to cultivate (a list perhaps) or do you think The Essentials card serves this purpose.


Hoping everything is going well. Reading your site sparks my interest in engineering - thank you.

Affirmations can be like new-year resolutions. You say them and then forget them.


You might consider taking your affirmations into the Rocks Process to implement them as automatic gut responses.

Wednesday, January 27, 2010


Ed says (2010),
"Risk, by nature, is chancy and probabilistic; you cannot directly manage risk. You can manage your exposure to risk by entering buy and sell orders."

Ed says (2003),
"...risk is fundamentally unavoidable and the best we can do is to manage the risk."

OK, combining your new definition in 2010, 1) would you agree if I rephrase your 2003 statement as, "Risk is fundamentally unavoidable, and the best we can do is to INDIRECTLY manage it by controlling our exposure to it" ?

Furthermore, Ed says (2003),
"To manage is to direct and control. Risk management is to direct and control the possibility of loss."

I remember in the April Workshop last year, you make a point that we have no control. For example, I can't even control a basketball.

So my questions are:

2) How much control we have? Do we even have CONTROL in our exposure to risk?

3) If yes, do you think good traders are the ones putting strong emphasis in managing, directing, and CONTROLLING the possibility of loss?

4) If no, is it similar to that we can't control a basketball, that we also can't really CONTROL even our exposure to risk?

5) Is there a positive intention to the feeling of gaining control? Or wanting control?

Needless to say, I am considering taking my feelings about control to the hot seat.


Nonetheless, I'd still greatly appreciate to hear your insight to the questions above, thanks.

"Control" means to direct, determine, or cause.  In TTP, we hold control - along with other elements of "future" and "causal" thinking - to be illusory.

Wednesday, January 27, 2010

Intimacy Cycle

I ask, "What is the Intimacy Cycle? Thanks."

Ed says, "I do not know the reference."

I clarify, "I am referring to the Intimacy Cycle that you mention in the Workshop page."





This is a new concept for the upcoming workshop - that has to do with viewing relationships from a system dynamic viewpoint.

Wednesday, January 27, 2010

Wants to Learn More

Greetings Ed,

I am a big fan of yours based on my reading about you online and through various books. I am interested in learning more about the Trading Tribe and potentially working with you.


Let me know how best to proceed.

You might consider reading through this website, reading The Trading Tribe, attending a workshop and / or attending a Tribe in your area.

Wednesday, January 27, 2010

TTP at the University Level - and Beyond

Dear Ed,

1. I start the trial using TTP in a clinical setting. As you maybe remember, I call it Emotional Dynamic Stimulation Technique (EDS-Technique). Maybe someone aware of TTP points at me with his finger and shouts "What you are applying is Ed´s technique". I then can answer "yes, and I call it EDS-Technique". About 4/5 of the participants at the study report fully resolving their issue in one hot seat. Many of them want to enter my Tribe. I am carrying processes and evaluating the results almost daily. EDS/TTP is absorbing most of my work time, and I love it.

2. I invite several medicine students to learn EDS/TTP. One psychologist wants to support me to further evaluate the technique and its applications. I plan to introduce the principles to interested students by demand.

3. A young girl attends my Department. She wants to lose some weight. I explain her the principles of training and diet and ask her about her need for losing weight. She tells me that her father is very fat. He is schizophrenic / paranoid. I receive her sadness and pain. She keeps on telling about the divorce of her parents, about her being raped by a guy with a positive HIV test, about the police scolding her and not believing her story, about her getting pregnant from her boyfriend some months ago and carrying out an abortion ... She tells, and tells, and tells, as I receive. Later, she mentions that she does not understand it, she plainly could not stop talking. This receiving stuff is strange ... I know that I can help this girl in a very deep level. However, I may not. I am not a psychiatrist, I am not a children psychologist, I am not a pediatric doctor. If I use TTP, no matter the results, I can get into very deep trouble. I realize that, if I want to move forward, I have to leave the official health system and create something new.

4. My wife expresses that she is released as I leave. She mentions that now she does not have to make an effort to talk with me or to share physical contact; instead, she can watch TV or listen to her radio. On the other side, she is sad about me leaving and mentions that she loves me. She does not know what to do: to work on the relationship, or to give it up. It is the same decision I face during the spring workshop. I remember your question "What is the best for the children?" and me answering "that we stay together". Now, I think that there are a good and a bad option. The good one for the children is to have two loving, happy, satisfied parents. The bad one, to have two fighting parents. A family is, of course, the best, but not at any cost. I mention that to my wife. She does not know what she wants. I support her in her uncertainty.

5. As I leave my wife I observe what seems a growing frequency of little annoying events: flat tires, reclamations, people not responding my emails. I look for the form: it is FURY. I am furious about the annoyances. I go into the form. After a couple of seconds I enjoy being furious. Then, sadness appears (do you remember it happening in Reno?). Endless sadness about the end of my marriage. I let it flow. As it is gone, Fred talks. I smile and understand: I am finishing my marriage to start something better. I fall asleep. As I wake up I see the solution of many problems.

6. A new doctor joins my Department. She is very interested in TTP and willing to learn it. I carry several teaching sessions with her. She seems open to learn how to share her feelings and to accept the feelings of other people. She is extremely nice, she looks good, she is single ...

7. I enter trance more and more often, more and more easily. I see so many things ...

Thank you for sharing your process.

Wednesday, January 27, 2010

Tape on the Floor

In reading about your upcoming workshop, I see mentioned things like Rocks, K-Nots ... but am not familiar with "Tape-on-the-Floor"

Could you please elaborate to point me in the direction of the answer?

I sometimes use tape to mark lines and areas on the floor of the Workshop room.



Success With Adhesives

and with life in general


can be a matter

of sticking to it.


Clip: http://media.spokesman.com/photos/



Wednesday, January 27, 2010

National Anthem - Video



Here's a video of the National Anthem at Eagles / Patriots’ Game:


And this my friends is the way it should be sung.

Thank you for the clip.

Wednesday, January 27, 2010



How is the EcoNowMics project coming along? I eagerly await to read the next section. I enjoy EcoNowMics so much that I decide to purchase iThink. The evolution process continues.

Talk to you soon

I am in process of generating more materials and a book.

Tuesday, January 26, 2010

Defining a Trend

Dear Mr. Seykota,

I have some questions for you Mr. Seykota:
- How do you define a trend? How do you recognize it?

I want to learn from you Sir. You are such a successful trader

You bring a trend into existence by defining it.


Depending on your definition of trend, the long-term trend might be up, the intermediate trend might be down and the short-term trend might be up.


"The Trend" does not exist in nature, outside of your definition of it.


Note: FAQ does not ... offer specific trading advice, or recommend specific trading system parameters.  See Ground Rules, above.

Tuesday, January 26, 2010

Dabbling and System Trading


Dear Ed,

“Thank you” to the person who writes on the evolution of his or her thinking about “Intention and Results” on January 13, 2010. I find it very helpful to think about the different awareness levels that associate with this valuable concept.

Since Breathwork Weekend I trade my computerized trend following system methodically. It performs well. It reflects my intent to allocate risk daily in a predetermined fashion. I enter and exit markets on system signals. My equity grows and shrinks accordingly. My feelings rise and fall in the now with the equity curve. I keep a trading diary. Writing really helps keep me on track with my system and helps focus behavior on productive activities. Even so, I screw up periodically when I let my guard down and engage in short-term trades. I call it “dabbling.” More on that later.

I spend a good deal of time testing system variations and new ideas. The result is surprising. I find myself happy with the production system as it is and resist the temptation to frequently tweak it. There is satisfaction in entering stops every day and otherwise keeping hands off in order to build an actual performance record to compare against back-tested results. I move to a quarterly system upgrade policy from my past daily/weekly “tweaking” policy. Although most trades are relatively small losers or winners, and lately the drawdown increases, testing gives me confidence that when a big trend emerges I am sure to be onboard. Most importantly, I feel confident that my risk is well managed in case it takes a long time for some major trends to emerge from these choppy markets today. That is, I have a system that favors longevity and fits my personality fairly well. My goal is to improve upon that even more.

By systematically trading many markets on a small scale I learn a great deal about trading operations and the idiosyncrasies of exchange rules, trading hours, order entry, contract specifications and software design. Often the learning comes with a price tag set by the market. In order to operate without variance I change my sleep habits to be online to set stops when certain foreign markets open, as I learn the hard way that good-till-cancelled orders do not always execute as planned. The structural change to my daily routine helps achieve the result that I intend to get.

“Dabbling” is this trader’s curse. It is the temptation to “load up” on a system-identified trend that seems especially enticing. From time to time I get bewitched by a market and take on excess risk. Sometimes I win. Sometimes I lose. The bait is always the real-time chart.


 “Having a quote machine is like having a slot machine on your desk,”


I believe you once said. How true. And as with a slot machine, the odds favor the house. My Tribe work and my Diary enable me to see this behavior for what it is. I decide to change the structure of my workflow in order to eliminate the behavior, and do so. Now I only use my trading platform, the one with real-time data, to enter orders. After order entry, I turn it off until needed again. No twitchy charts, no bewitching patterns, no dabbling. There is a new structure to my work environment. I do not dabble anymore. Ahhh—that’s better. Time to go walk the dog.

The work I do with my Tribe, the Breathwork Weekend, the Workshop and the FAQ all contribute to major progress toward my desire to trade profitably and pursue right livelihood.


An acquaintance asks me to manage money. A professional trader offers to partner in a trading business. Good stuff happens! I feel good, focused and aware of those weaknesses as a trader that require work.


Thank you so much for your continuing work and generosity with these tools and technologies.

Thank you for sharing your process.

Tuesday, January 26, 2010

Acceptance and Judgment


Dear Ed,

I notice that I have another 19 hour week working on system creation. I feel good about my progress and am very thankful the help and communication of my support group. Again, there are some subtle things people say or examples they set that effect my path. Thanks.

I stop taking snap shots of my Now throughout the day and notice a change. The lack of awareness or acceptance is typically supplemented with a seemingly innocent, yet controlling / judgmentally thought. I have chosen to put it in my calendar to take make a habit of taking snapshots through out everyday.


Awareness and acceptance is the opposite of judgment and thought. I may have brought this thought up in a previous report, what is different in my understanding is that it is an either / or process.


One is on the other is off. I discover that I prefer awareness and acceptance at all the moments I choose to be aware and accepting and prefer the opposite if I am unwilling to experience it. Man, I have a urge to judge that last sentence.

You might consider alternately judging and accepting the way you go back and forth between acceptance and judgment.



You May Not Get To Change

the way the merry goes round


You may be able to change

your experience of it.





Clip: http://blog.myphysicaltherapyspace.com/



Monday, January 25, 2010



My brother is in my city for 2 weeks, so I receive him in my flat during this time.

He is a big huge snorer since our childhood, he snores like a chainsaw every night. He snores so loud that I wake up at night. The wall between our bedrooms are not enough soundproof and his snoring is really loud.

Face to that already known case - I mean before I make the distinction between causal model and system mode l- I would have waken him up, then ask him to change his position when he sleeps, because he is the "cause" of the noise. I repeat it till I can sleep again after getting on my nerves.

But today, I change my point of view, as you teach us there is no exogenous cause for "noise" and we are responsible of OUR experience of THE situation. As you teach us, intention = result, so even the noise I hear comes from my intention if I take responsibility.

So I decide to change my intention because I'm not satisfied with the result. I change MY structure(=intention) with 2 great earplugs then I get a great behavior(=result) :now I sleep like a baby at night and I don't need to wake him in his sleep.

This situation seems to be similar to what happens on markets. There are a lot of "noises", so many hot news flash, but as you teach us, we can choose to act responsibly then put those noises right into the trash.

Yes, we have choice and responsibility pushes us to act in the best way in the system we live.

Thank you for your lesson great teacher.

Thank you for sharing your process.




If You Snore So Loudly


that you wake yourself up


you might try sleeping


in a separate room.




Clip: http://jmccull.files.wordpress.com/



Monday, January 25, 2010

Betting it All


Dear Ed,

I am interested in the question of optimal betting as discussed here:



You use a simple example of a 50:50 probability bet with a 2:1 payout. The net return is -100% of
the bet for a loss and +200% of the bet for a win.

As you point out, on the optimum strategy from the perspective of maximizing expected compound return is to bet 25% of net worth every

Prompted by a question [Name] raises about running small accounts, I investigate optimum betting strategies further. I find that for realistic relationships between wealth and happiness, and incorporating the fact that people can save money after losing their betting stakes, the optimum bet fraction can vary considerably from the 25% that optimizes expected compound returns. The range I come up with varies from 1000% to 15%, depending on wealth.

Is it best to optimize expected compound return?

The optimum bet from the perspective of expected net worth - the total outcome after N bets averaged across the range of possibilities weighted by probability - is to bet *100%* of net worth every time.

Why optimize expected compound return (ECR) rather than expected net worth?

First ECR also optimizes median expected wealth. If you follow the strategy of betting 100% of your money on every bet the median return after more than 1 bet is -100%. After 6 bets or so the 99th percentile is even -100%. There is a very small chance of a huge return and a large chance of losing all your money. This does not seem sensible.

ECR also optimizes utility if utility is a logarithmic function of net worth. [Utility is way of measuring how happy you are, given your wealth].

Betting everything optimizes utility only if happiness is proportional to wealth. But is someone with $1bn really a thousand times as happy as someone with $1m? This seems unlikely.

Optimizing expected compound return optimizes utility if utility is a logarithmic function of wealth. A logarithmic utility is more realistic than a linear utility. With logarithmic utility, a given amount of extra money becomes less valuable as you get wealthier. For example, a person with $1b is unlikely to get very excited by finding a $100 note, but someone who is very poor may well be very pleased.

However logarithmic utility leads to some strange results. A person having no money should be infinitely unhappy. I have experience of this
situation and don't recall being infinitely unhappy. It also predicts that no matter how much money I have, there is an amount I would bet all but $1 of it against, on an even money bet. I would suggest that I would never take such a bet no matter how much you offered me. Logarithmic
utility also predicts that for negative net worth, happiness would be an imaginary number.

Optimizing a different utility function

I construct a utility function that seems more realistic in my case at least. Here it is in spreadsheet form:

Utility = power(0.5, max (Wealth - 300000, 0)/1000000 * 0.1) * -0.85 + 1.00

This does not have the problems of logarithmic utility.

None of this is original - it is discussed at length by economists. However they generally use logarithmic utility function because it is easier to calculate with [economists often take this approach to problems].

I rerun the simulations, trying to optimize for my utility function, rather than logarithmic utility. I find.

The optimum bet falls as one becomes wealthier. This is basically because when you are wealthy you have more to lose than to gain [there are few more dismal spectacles that a formerly wealthy person who lost it all]. At $30m the optimum falls to about 15% of net worth. A 99% drawdown is quite possible and would be very distressing ($30m->$300k).

I also consider what happens at low levels of wealth. I note that if you lose all your money, you probably have the chance to save up another
stake and try again. I rerun the simulations taking this into account.

What I find is for realistic estimates of saving capacity, it can be better to bet 100% of wealth (or even more, if the other party allows it - I assume 10% margin in my simulations which means 1,000% bets at low wealth). While you may lose it all, you may make large gains and become very wealthy quickly, and this can be more significant than the risk of losing all your current wealth. I notice that a number of the people in the dreaded "Market Wizards" book actually followed this strategy initially, with
success, though most of them did not intend to do so.

I also take into account bankruptcy (which cancels debts after a delay of a couple of years). This makes no difference to the optimum strategy
as it turns out.

I also look at the effect of granularity of bet sizes ie minimum bets. I find that at least for a single stream of bets, the minimum bet actually makes no difference - the minimum bet is less than the optimum bet.

As a trader gains wealth, if he or she continue to bet a high percentage of net worth they will start to move markets and reduce returns. This factor also drives smaller bets as a percentage of net worth as wealth grows.

This ignores the issue of "gut". Betting more than net worth may create unmanageable fear and greed in the trader and lead to irrational decisions. On the other hand losing all your net worth can have a very motivating effect on some traders, leading them to take trading and their research more seriously, as we also see in "Market Wizards".

If a strategy has a negative expected return, the optimum bet is zero. It still remains important to back test a strategy to be sure it has a positive return, and to understand the distribution of returns, in order to come up with the best strategy in each case.

Betting 100% (or taking unnecessary risk) might be a pretty good strategy if you know someone who stands ready to bail you out when you lose.



Saturday, January 23, 2010

Ice Cream You Scream


Dear Ed,


I thought you would like this:


--From a teacher in the Nashville area

"We are worried about 'the cow' when it is all about the 'Ice Cream.'

The most eye-opening civics lesson I ever had was while teaching third grade this year...

The presidential election was heating up and some of the children showed an interest.

I decided we would have an election for a class president.

We would choose our nominees. They would make a campaign speech and the class would vote.

To simplify the process, candidates were nominated by other class members.

We discussed what kinds of characteristics these students should have.

We got many nominations and from those, Jamie and Olivia were picked to run for the top spot.

The class had done a great job in their selections. Both candidates were good kids.

I thought Jamie might have an advantage because he got lots of parental support.

I had never seen Olivia's mother.

The day arrived when they were to make their speeches.

Jamie went first.

He had specific ideas about how to make our class a better place. He ended by promising to do his very best.

Everyone applauded and he sat down.

Now is was Olivia's turn to speak. Her speech was concise. She said, "If you will vote for me, I will give you ice cream."

She sat down.

The class went wild. "Yes! Yes! We want ice cream."

She surely would say more. She did not have to.

A discussion followed. How did she plan to pay for the ice cream? She wasn't sure.

Would her parents buy it or would the class pay for it. She didn't know.

The class really didn't care. All they were thinking about was ice cream.

Jamie was forgotten. Olivia won by a landslide.

Hmmm... this sounds vaguely familiar.

Monday, January 25, 2010


Dear Tribe;

My account is down- probably a lot (10%). It is currently somewhere in space between my old brokers and my new brokers. I planned on the market taking a nosedive- I put in all my stops, but I still don't know whether my stops were actually followed. I feel foolish and regretful. There will be some transition issues for the next week or two.

I am taking all your helpful advice to heart- and changing my commitments accordingly.

I will re-think these this week and have another version for next week

My re-hashed visualizations and commitments.

1) I commit to doing everything in my life in a more professional manner . Closure and Precision.

2) I commit 5 hours a week to the [Names] Corporation exit strategy. These numbers can overlap- and will be adjusted to circumstances.

3) I commit to spending 20 hours researching, testing and trading my account, so that I am earning 100% return this year.

4) I commit to reading the FAQs, exercise and good health habits.


Thank you for sharing your process.

Monday, January 25, 2010

Starting a Fund

Hi Everyone,

This is the first report summarizing my progress toward fulfilling my commitment for 2010.

1. Commitment Summary: At the last workshop, I commit to working on my fund starting in January 2010. Specifically, I commit to building out the fund's infrastructure, and to raising capital so that I finish 2010 with $50m in managed assets. To that end, I also commit to completing a business plan by the end of March, and to circulating two reports per month summarizing my progress.

2. Fund Performance: Net of fees, our trend following model finishes the year with a +4.74% return. In comparison to the top twenty largest trend following funds, our performance ranks third best. More importantly, I finish the year having followed my rules with no drama.

3. Progress Summary: The first two weeks of January start slowly. I expect to sell a technology business I own by the end of December, freeing up more time for the fund. The sale does not take place on time and requires that I negotiate an extension. I now expect the sale to occur by the end of April, and must continue managing the business until then. Given my commitment to work on my fund, I expect to encounter extreme time constraints. In response, I develop a weekly worksheet I can use to better allocate my time across various priorities. I put the worksheet into effect this week.

4. Next Steps: To write an effective business plan, I first need to obtain information about the process of building out a hedge fund. To that end, I want to: (1) find people who manage investment funds; and (2) learn from these people how they do it. If you know of anyone who fits this description, I would greatly appreciate a reference.

Thank you for agreeing to support my commitment. It is a major goal, and I appreciate your willingness to help.


I look forward to a great 2010!

Thank you for sharing your process.

Monday, January 25, 2010

Up Against the Wall

Dear Mr. Seykota,

I knew you from your website.

I have very strong engineering and programming background and I know there are quite a lot platform on which traders can set up their own ATS (automatic trading system) based on their own trading ideology.


I used to use MT4 for forex trading and now I plan to choose Openquant or QuantDeveloper to trade commodity and financial future, forex etc. If I can develop a good ATS, I may raise a fund in the future. (that’s too ideal I guess)

However, I also have some concern, I know wall street hire some most brilliant talent PhD, programmer, economist, they can also afford super computer and very complicated software to monitor the investment opportunities globally.

So my questions is : how can we compete with them? What’s our edge technically speaking? (Suppose I have all the other capability such as psychology matter).

Thank you for sharing your process.


You might consider taking your feelings about <too much competition> to Tribe.



When People Start Following These Rules ...




... And These Rules ...


you might have some real competition.







Sunday, January 24, 2010


Starting a Fund

Dear Support Team:

Thank you all for your encouragement and involvement in my Big Wave. I continue to move forward with my Big Wave with great enthusiasm.
I am also continuing with system design and enjoying this aspect very much!

Today I go skiing with a potential client and the meeting goes very well.

Tomorrow I have a call with a firm in [Country] regarding company formation and setup.

Hope all is well!

Thank you for your support.

Thank you for sharing your process.

Sunday, January 24, 2010


Daughter Stops Dad From Working


I notice one feeling that stands between me and getting a job. I like being with my daughter. I wake up with [her] and play with her for 2-3 hours every morning until either she goes to sleep or [my wife] wakes up. The three of us usually take a 1.5-2 hour walk in the middle of the day. I give [my daughter] a bath before she goes to bed for the night. I am afraid of losing all that when I start punching clock.

Assets:           $524,937.28
Liabilities:      $552,143.58
Net:               -$27,206.30
500oz goal:    $542,000.00

Job applications: 0
Interviews: 8
Offers: 0

Thank you for sharing your process.


You might consider compiling a list of all the other reasons you can't get a job (like the ones you might recall using before the birth of your daughter.)


Since you are, indeed, surviving, you are living proof that you don't really need a job.


You can, for example, continue living off your wife, at least until your daughter is old enough to start supporting you.



Babies Like Sucking On Their Mothers


Sometimes they grow out of it

and get to right livelihood


and sometimes they don't.


Clip: http://cache.static.tsavo.com/wordpress/



Sunday, January 24, 2010

Falling Dollar



The Question of the Day is ...Will the Dollar fall or not?


You can get a pretty good idea about what this particular dollar is likely to do by monitoring the spread.

Sunday, January 24, 2010

Right Place and Time

Hi Ed,

I have been following your FAQ for the purpose of improving my trading skills and to make lots of money. Ironically, your wisdom that I gathered from your FAQs, together with Deepak Chopra's book and other self development books I've read led me to a different, more satisfying, less stressful path. For some reason, things in my life are happening at the right place and time. I've begun to appreciate the positive intentions of everything that happens.

About a year back I asked for your advice about day trading. Your reply (and my trading losses) led me to abandon trading altogether and do what is most enjoyable to me. I'm still looking for the livelihood that I can be most passionate about. Any thoughts on how I can find it?

Thanks for keeping the FAQ running!

PS. Is your TTP book applicable outside of trading?

Thank you for sharing your process.


One way to find right livelihood is to keep serving others.


The book's application depends mostly on how you apply it.

Friday, January 22, 2010

Early Bail-Out Plan

Hello Ed and my valued Support Team,

Well, I violated some rules this week and exited some positions before my stops were hit. In a couple of cases the instruments kept right on going through the original stops and still haven't stopped, so my actions lowered my losses. In a couple other cases, only time will tell if I bailed very near the low of the reaction. I learned a lot. 1. Even using a multiple ATR stop, my positions are still too large.

2. When the s--- hits the fan I run like a scared puppy.

3. I need to work on fortitude, patience and discipline.

4. I am not 100% compatible with my LTTF system as it currently is designed. Either it or me has to change.

Thanks Ed for your response to my last report and to my supporters for their feedback.

Thank you for sharing your process.


Your overall system comprises your math and your ability to follow your math.


By working on your math and by also working with your feelings, you can discover a system with good math that you can follow.

Friday, January 22, 2010

Progress Report and Some Questions

Dear Ed and Support Team,

I send you an update after a long time. I experience some feelings of guilt at my delay. But I am happy about the progress I make and the path I choose. I have some questions and I greatly appreciate your help with answers and feedback. I list my questions in the broad categories they fall into so as to improve readability:

1. Is there an optimal number of markets for a systematic trading algorithm?
2. Ed, in your Donchian system demo you choose 5 markets (S&P, Bonds, Soybeans, Copper and Eurodollar) – is this merely a random choice, or do you arrive at this list by some methodology?
3. When I construct continuous contracts should I use all the contracts in a series or only the ones which have high open-interest (OI) and volume? For example, in the case of Soybean, I see that the March and November contracts have most OI and volume typically, but the full cycle is Jan, Mar, May, Jul, Aug, Sep and Nov. So is it best to make a continuous series of Mar and Nov only, or is it better to use all the other months as well?

1. Ed, I re-read your book and feel I do not understand what you mean by “honouring” a judge. How is “honouring” different from “experiencing”?
2. Do forms always and necessarily increase in tempo and movement as the sender goes deeper into his emotions?
3. When in the hot seat, I sometimes have deep feelings that I am unable to express fully in a physical manner. This is not always the case but it happens a few times and when it does, I feel I have not gotten to the core of the issue. I feel that some other members in my Tribe have a similar experience. I do a site-search on the FAQ and discover an entry where Ed visits a Tribe and participates in their process and gives them feedback to not ask the sender repeatedly how he feels during the hot-seat (as it pulls him into his conscious-mind and away from his Fred)





This is a mistake that I and my Tribe also make. I share the link with my Tribe so as to improve our process and eagerly await our next meeting. I am afraid I do not have enough experience to “see” a form and help the sender develop it. I greatly appreciate any suggestions or exercises to help overcome this.

3. SVO-p
1. I practice to talk and write in SVOp. Initially I feel embarrassment at the awkwardness of this syntax. But soon this feeling passes away. I suddenly realize that SVOp is a simple yet amazingly powerful tool to help me stay in the now. I share this insight with my family (my sister, my 9-year old son and my ex-wife). I feel happy. I decide to help my family, my friends and my Tribe to stay in the now by using the SVO-p tool, and to remind myself of this intention at every check-in.

1. I am in love with a woman who does not trust me, but tells me that she loves me. I repeatedly assure her of my fidelity, all to no avail. I live in [City] and she lives in [Another City] . My feelings of love towards her are intensely strong. I decide to move to [her City] in order to be with her. Initially she encourages me in this, but then shuns me yet again.


I show her all the commitment that I can and all I get is another cold shoulder. I do a couple hot-seats on this issue. Gradually I feel much better. I love her still. But I accept her for who she is. I decide to stop my “explain and convince” cycle with her. I want to share my life with a woman who is my soul-mate – someone who wants me as much as I want her. I decide to live my life fully and not to wait for her. I trust that the right woman will appear as I walk the path of my right livelihood.

2. The futile pursuit of the woman I love makes me realize that I show commitment to others but not to myself. Over the past few years I put a lot of effort to build a trading system but it remains incomplete. I am afraid I don’t have the capability to pull it off. Then I see a comment from Ed on FAQ





with the image of a bacon and eggs breakfast and the words: “the chicken is in, the pig is all-in”. I love it. I absolutely love it. I know what I must do. I get a bonus in the next few weeks that gives me about 12 months worth of pay.


I decide to use this opportunity to quit my job and work full time to develop my trading algorithm. My mum and dad and my sis, even my ex-wife fully support me in this. Others, who know me less, tell me that I must not take any wild steps – after all I have to provide for two households (my own and my ex-wife’s) and that the market is soft and that there is a raging recession etc. I feel a lot of fear. Sometimes I wake up in the middle of the night with a cold sweat. But I want to do this. It makes me happy to finally give myself a chance.

I keep you updated on my progress. And I thank you for your support.

Thank you for sharing your process.



1. The definition of your objective function (the function you wish to optimize) implies an optimal value for all system parameters.

2. Using five instruments (rather than, say, 40) makes the demo easier to follow and replicate.

3. FAQ does not tell people what they "should" do.



1. Honoring goes a little further along the road toward appreciation and acceptance.

2. Some "medicinal" and "necrotic" forms show little motion.

3. You might consider staying in the now and expressing the physical form of <I can't express feelings physically>.


3. OK.


4. OK.

Thursday, January 21, 2010

Perceiving Pressure

Dear TT Support Team:

I have exited more trades today and in the past week and am writing to report my progress.


Overall I feel I have stuck to my rules, so far this year I have done 8 trades, 4 were small losses, 3 started right, but failed to continually behave, and were exited around breakeven. 1 did all right and generated a modest profit (5 R) relative the trading size. So, even with this 1 modestly winning trade, it pays all the losses, and netted a small profit.

Since I perceive that the general stock market is under pressure, and a correction seems to be in the making. I am all in cash. I will report my progress once I enter and exit trades.

Thanks for your continuous support.

Happy Trading!

Thank you for sharing your process.


You might consider formalizing your method of "perceiving pressure" to determine if it is inherently analytical or emotional.






is energy / volume


and also


force / area.




Clip: http://www.geekologie.com/



Thursday, January 21, 2010

Risk Management

Hi Ed,

It seems to me that you'd agree risk management is very important in trading.

Do you think you can manage risk?

How do you feel about managing risk?


Risk, by nature, is chancy and probabilistic; you cannot directly manage risk.


You can manage your exposure to risk by entering buy and sell orders. 




You Cannot Control Where the Ball Lands.


You can control


the extent to which the ball affects you.



Clip: http://fourthandverylong.files.



Thursday, January 21, 2010

Intimacy Cycle

Hi Ed,

What is the Intimacy Cycle?



I do not know the reference.

Thursday, January 21, 2010

Controlling the Kids

Hi Ed,

I struggle with the responsibilities of parenthood. I try to use TTP with my kids, but I get pushback about many parts of family life (Me: "I want you to clean your teeth / pick up your toys / do your homework etc." Kid(s): "NO"). I try to avoid ultimatums ("do your homework or you can't go skiing") but often feel I have no choice.

My patience is challenged everyday, and my patience is getting stronger. Many times, we can negotiate mutually acceptable solutions (example: pick up toys THEN watch movie).

One second order influence is my wife has a different parenting style. She uses loud commands in the imperative tense, tosses out ultimatums constantly, uses lots of emotional "muscle" and so on.

I feel confusion at how to get my kids to brush their teeth, do their homework, eat their vegetables, etc. I try to lead by example, to accept them fully and to give them as much autonomy as possible. But at the end of the day, I'm substantially responsible for their well being until they are old enough and able to take care of themselves.

Feedback appreciated.

You might consider taking your feelings about <controlling the kids> to Tribe.


Meanwhile, you might consider teaching your children by brushing your own teeth, picking up your own toys and doing your own homework.




Teaching Kids by Scolding


mostly teaches them


how to scold.




Clip: http://www.ibabuzz.com/tricitybeat/files



Wednesday, January 20, 2010

Being Accountable



It is another productive week. I meet with the [City] TT on Monday and have a productive hotseat. My last TT is in the beginning of November, so it is nice to get back to receiving and sending. I experience feeling broken inside along with many other things. In the end, I notice that I choose to put that image or thought there and this brings some separation. It is great I have a chance to talk with [Name] about trading systems.

My programming column is continuing to change definition. My intention of this column is to hold me accountable to do more hands on investigating and creating and less academic studying. It does help with this. I am including in this time studying charts and analyzing different systems.

On Tuesday I sit down with [Name] at his office. It is impressive and I feel lucky to sit in on a couple of new sales people first day training. As a salesperson, I always enjoy watching someone with some much passion and experience get their message out.

Things are moving. Work is busy, making it more challenging to log hours. I would like to get back up to 28 hours consistently.

Thank you for sharing your process.

Wednesday, January 20, 2010

Fixing the Fall



Fixed one very important memory in my life which related to falling in a ski race in which I had had the best run of my life.


Second run I fell. Two runs to one slalom race with the combined best times winning. In any event I fell on the second run and after the fall I skied the best that I have skied in my life.


You are allowed to get up and finish (won't get into technicalities) In any event the memory in my mind has a break where I fell. Today running through the memory I catch myself falling and correct and finish skiing the best that I have skied. The relevance of this is that skiing is the only thing that I have confidence in saying that I do well and that was always a whole in my "skiing memory" which was fixed today. As I fix the fall a huge "spark" fills my body.

Thank you for sharing your process.



In Skiing and in Trading


be sure to assume no more risk


than you can handle.







Clip: http://www.alpineworld.com/adventure



Wednesday, January 20, 2010

Sand Painting - Video

Hi Ed,

I thought this video would be of interest to you and others...I like the way she is creating and recreating rapidly.

It's only sand but art comes in many mediums...
the people connect to their emotions and the emotions of their memories.

Art is emotion made manifest.



Thank you for the clip

Tuesday, January 19, 2010





Ed says, "Likely the market is trying to move people out of real estate speculation and out of the service sectors and and into profitable manufacturing. The government is likely to impede this process, thus slowing the recovery." (FAQ, "How Much is Too Much Speculation", 10/26/08)

If I understand it correctly, it sounds like you are implying that manufacturing is preferable to service sectors in terms of a speedy recovery.

1) Can you clarify what you mean by recovery? Is it measured by the country's GDP?

2) Regardless of your answer to (1), I wonder what your thought is on GDP - for example, whether you think it is a reasonably good measure of a country's economic health.

Your choice of adjective (profitable) to describe manufacturing seems to me that you are in favor of producing more "stuff", so long as one can sell the "stuff" at a higher price than the raw materials + labor.

3) If so, I wonder if a house can also be a profitable "manufactured" product, so long as one can sell it at a higher price than the raw material + labor?

4) In addition, can there be profitable "service sector"? If so, do you think moving people into profitable service sector can help recovery?


I am referring to the cycle phase in which the aftermath of a speculative bubble (such as real estate bubble) clears the economy of marginally productive enterprise.


In the case where subsidies keep marginally profitable enterprise in business, it tends to delay the recovery.


Tool building, an essential component of capitalism distinguishes some forms of manufacturing from the services sector.

Tuesday, January 19, 2010

Baseball and Trading


Hi Ed.

My system is up and running as of January 4, 2010. I am 25 years old and my process continues to evolve. I enjoy sharing my experiences from my baseball career and applying them to trading. I share one such experience below.

It is four years since I stop playing baseball following a severe lower leg injury (broken right tibia and fibula). From time to time, I have a catch or play a little on the weekends. Despite ~15 years of game-play and practice, I feel that my mechanics and focus are depreciating. I notice that I am a casual player now. This angers me as I remember during my playing days that I despise casual players. These are people who I define as not taking the game seriously and expect above average results. Also, they are the last ones to arrive at practice, the first ones to leave, never get worked up over losing games, etc.

What is funny to me is that trend following appears to be a "casual" style as it never puts you in the move before anyone else (late to practice), gets you out of the move before the majority sells out (first ones to leave practice) and shrugs off losers (moves on to the next trade). However, I know from experience in baseball and trading that the rigorous work is done behind the scenes so the "casual" nature exhibited on the playing field is not to be confused with laziness. I find that players in baseball and trading, who exhibit effortless execution tend to be the ones who put in the most effort when no one is watching.

Talk to you guys soon

Thank you for sharing your insights.

Tuesday, January 19, 2010

Austin Tribe

Hi Ed.


I wonder how things are going for you after the Breathwork.


Since you have been through the Breathwork already does it still make a big difference in your life? Have you noticed any changes? I read other participants reports and wonder how it is for you.


At the weekend you mention looking at property near Austin and I wonder how that is going. Do you still plan to move? I have wondered about these for awhile now so I thought I would write to see.

I hope everything is well with you.

Yes, I am moving forward with plans to re-locate to Austin.

Tuesday, January 19, 2010


Tires and Skids

Dear Ed,

I am sure you will pleased to know that the [Name] Tribe has had its first official meeting.
Just two of us present but a very meaningful session.

The problem I wanted to drill into was the reason why I bail out of highly responsive stocks (Longs with high correlation to the indices) before they hit my stops when a sharp sell off occurs in the overall market.

The reasons for me doing this are to avoid large drawdowns, but these exits are rarely re-entered into when the market rises again and although
these exits protect me from large drawdowns on that day or over the next few days, they ultimately cost me money in the long run.

After going round in circles for about an half an hour, and being asked what the feeling was that I have when pressing the sell button in these cases, I came to the conclusion that there was no emotion, no feeling and no fear it was just an automatic response from my subconscious mind.

This told us both that it must have a lot of "hidden stuff" behind it, I began to feel uncomfortable when I said "I remember Ed said I had a blockage of fear" as the feeling of discomfort grew, we stayed on the point, I remembered some occasions in the past when I had felt fear, but this proved to be irrelevant.

Strangely after we stopped the session I was still in deep thought mode and about 5 minutes later I recalled being walloped when I was a young boy of around 5 for wearing right though the back tire and inner tube on my bicycle because I was skidding by locking the back brake on, this earned me a harsh spanking punishment from my father as he had told me not to skid my back wheel.

I learned very early in life that any mistakes of this nature I made would earn me a punishment either from my father shouting at me, or a spanking or some loss of privileges.

I recalled how scared it made me feel. Could it be that this knee jerk reaction to sell offs was my subconscious mind "knowing" I had to avoid mistakes to avoid being punished?

I figured that this was exactly the whole reason behind it all.


After the session, I felt very upbeat about it, and decided to build this set up into my system as an upgrade because the first part of the drama (the selling of highly correlated stock in sharp declines) was correct, but the failure to buy back in if they remained long by my system, after the sell off ended, was incorrect.

This is the solution to the problem I have been debating endlessly in my mind for the last 10 years. It will reduce drawdowns without reducing profits, as the original trade will be re-entered
usually a few points lower at the original size and the stop in its original place.

If you have any thoughts on these points they would be appreciated.

Thank you for sharing your process.





"Don't Skid Your Rear Tire."




"OK Dad."



The K-nots you give your kids


are likely to keep them busy


for the rest of their lives.



Clips: http://www.aboutstreetbikes.com/upload1/





Monday, January 18, 2010


Looking for a Job


Dear Ed,

I attend a "reverse job fair" this Saturday ... Job seekers set up displays which recruiters and hiring managers visit.


I lose track of how many companies' representatives I speak to or hand my resumes to. I don't know how to count these mini-interviews and maybe-applications.


I am just catching up on email from them after two full-time days (yes, some of them email me on Sunday). I have two interviews earlier today.

Assets:             $528,671.28
Liabilities:        $552,143.58
Net:                 -$23,472.30
500oz goal:      $564,000.00

Job applications: many
Interviews: many
Offers: 0

Thank you for sharing your process.


Looking for a job can be a good way to avoid getting one.

Monday, January 18, 2010


Wants Real-Time Monitoring


Dear Ed,

Potential institutional clients are asking if there is a way they can see their investments with us
in real time or on a daily basis.

Is this crazy to ask for?

How might we provide this?

Yes, you can implement real-time reporting.


You might ask your clients how they intend to use real-time data; to the extent that your clients use such information is medicinally, it might be counterproductive to long-term trend following.


You might consider qualifying your customers as to their ability to stay with the system over the long term.

Sunday, January 17, 2010


On the Path

Hello Ed,

Our local Trading Tribe holds a meeting and I spend quality time sending and receiving feelings from Tribe members. Our Tribe grows and I experience the joy in seeing others participate in TT and proceed with their own perspectives of right livelihood.

I review my feelings about "missing out on a market move" and move thru a few forms.


I understand that I fear being wrong and imperfect may result in my parents not loving me. I experience the form of crying and recall that my parents have always stood by me and have never stopped loving me even if I make mistakes and I am not perfect. I feel better and recognize that missing out on market moves is okay. Some trades are profitable, some trades are not profitable, and some trades never start. All of these outcomes are okay with me.

I am surprised that the feelings of missing out are linked to memories and fears from childhood experiences. I recall that I like to hide the bad test scores from my parents and show them the good ones. It is okay to show them the good and the bad test scores. It is okay to have both profitable or equity reducing trades.

My personal commitment to working with the Trading Tribe process began only recently. I notice that since I started actively working on my feelings, trading is more enjoyable, stress free, and profitable.

I learn a lot by receiving feelings of fellow Tribe members. During the receiving process, I remain detached from the senders feelings and focus on encouraging the flow of forms and feelings. Afterwards, I notice that I easily empathize with the senders' experience on the hot seat. I am in touch with those feelings again. I thank the sender for sharing.

I renew my commitments to experiencing and enjoying all of my feelings professionally as a trader and personally as a community member. I intend to embrace my feelings and follow my trading plan. I intend to continue holding and organizing Trading Tribe meetings.

Thank you for your support,

Thank you for sharing your process.

Saturday, January 16, 2010


Pyramiding Research



After duplicating the results for your SRS, EAS and ROC systems in the TSP I decided to modify your SRS system to allow for pyramiding. I ran the system using the same parameters used in your system test (140/20 5% heat) except I added one position. I also re-ran the test using 3% heat. I have attached the results (system summary, metrics log, equity log and trade log).

Sept 9, 2003 - Ed Says “Pyramid up to your risk budget, not on top of it.”

My Observations:
Running the SRS system at 5% heat and pyramiding once generates higher return, higher drawdowns and similar bliss when compared to the original system. The pyramiding system run at 3% seems to generate similar output to the original system except the number of trades and the size of the positions seems to be larger.

It would appear the manner in which I am pyramiding with the SRS system does not provide much benefit. Perhaps pyramiding smaller than the original position size would be more stable. Like the Pyramid of Skulls Cézanne, circa 1901 (FAQ May 17th 2003).

I’ll continue exploring. I am also testing the SRS system with a portfolio of securities and will provide some feedback related to diversification.

Thank you for sharing your research.

Saturday, January 16, 2010


The Secret Toothbrush

Dear Ed,

Was reading your site and saw a post Regarding "The Secret" I wanted to share this review with you.





The Secret saved my life!, December 4, 2007 Please allow me to share with you how "The Secret" changed my life and in a very real and substantive way allowed me to overcome a severe crisis in my personal life.


It is well known that the premise of "The Secret" is the science of attracting the things in life that you desire and need and in removing from your life those things that you don't want. Before finding this book, I knew nothing of these principles, the process of positive visualization, and had actually engaged in reckless behaviors to the point of endangering my own life and wellbeing.

At age 36, I found myself in a medium security prison serving 3-5 years for destruction of government property and public intoxication. This was stiff punishment for drunkenly defecating in a mailbox but as the judge pointed out, this was my third conviction for the exact same crime. I obviously had an alcohol problem and a deep and intense disrespect for the postal system, but even more importantly I was ignoring the very fabric of our metaphysical reality and inviting destructive influences into my life.

My fourth day in prison was the first day that I was allowed in general population and while in the recreation yard I was approached by a prisoner named [Name] who calmly informed me that as a new prisoner I had been purchased by him for three packs of Winston cigarettes and 8 ounces of Pruno (prison wine). [Name] elaborated further that I could expect to be raped by him on a daily basis and that I had pretty eyes.

Needless to say, I was deeply shocked that my life had sunk to this level. Although I've never been homophobic I was discovering that I was very rape phobic and dismayed by my overall personal street value of roughly $15.


I returned to my cell and sat very quietly, searching myself for answers on how I could improve my life and distance myself from harmful outside influences.


At that point, in what I consider to be a miraculous moment, my cell mate informed me that he knew about the situation and that he had something that could solve my problems. He handed me a copy of "The Secret". Normally I wouldn't have turned to a self help book to resolve such a severe and immediate threat but I literally didn't have any other available alternatives. I immediately opened the book and began to read.

The first few chapters deal with the essence of something called the "Law of Attraction" in which a primal universal force is available to us and can be harnessed for the betterment of our lives. The theoretical nature of the first few chapters wasn't exactly putting me at peace. In fact, I had never meditated and had great difficulty with closing out the chaotic noises of the prison and visualizing the positive changes that I so dearly needed.


It was when I reached Chapter 6 "The Secret to Relationships" that I realized how this book could help me distance myself from [Name] and his negative intentions. Starting with chapter six there was a cavity carved into the book and in that cavity was a prison shiv. This particular shiv was a toothbrush with a handle that had been repeatedly melted and ground into a razor sharp point.

The next day in the exercise yard I carried "The Secret" with me and when [Name] approached me I opened the book and stabbed him in the neck. The next eight weeks in solitary confinement provided ample time to practice positive visualization and the 16 hours per day of absolute darkness made visualization about the only thing that I actually could do.


I'm not sure that everybody's life will be changed in such a dramatic way by this book but I'm very thankful to have found it and will continue to recommend it heartily.

Thank you for sharing your process.






Clear Communication


can help others get the point.





Clip: http://farm1.static.flickr.com/198/



Saturday, January 16, 2010


Ups and Downs

Dear Support Team,

Per my commitment, I am reporting that my system exited 2 positions automatically based on my pre-established stop loss orders. The cumulative effect to equity is ~1.8%. I feel fine with this. Losses have been cut short. My portfolio as a whole, however, got smacked down pretty good this week.


Correlations in my "diversified" portfolio have essentially gone to 1. I find that my mood gets mildly depressed when things are going against me. I also notice that I get virtually immediate onset tension headache when I see my equity dropping. I wonder if headaches are my signature emotional form.


I think sending in these reports is beneficial even if no one else reads them. I am finding that designing a profitable much shorter term system (to diversify my long term system) is proving a much more difficult task.

I thank you all for your support, observations and suggestions.

You might consider back-testing your system to optimize your time constants.


Many systems optimize with time constants in the range from three months to two years.  If you are trading on a "two-week" basis, you might be playing for emotional ups and downs.




Ups ...



... and Downs


can alternately


expose your throat


and your butt.



Clip: http://www.diane-lee.com/photo1.htm


Friday, January 15, 2010



Hi Ed,

I wonder what are some of the most important lessons you've learned since the Market Wizards interview.

You might consider taking your feelings about <life is a series of lessons> to Tribe.

Friday, January 15, 2010



see previous

Dear Ed,

Just a quick thank you for your responses to my previous two emails on FAQ's. They help me to better experience the now.

Thank you for your support.



Friday, January 15, 2010


Low on Cash

Hi Ed

Thank you for hosting the workshop. I got really excited when I saw it. I went to visit the travel agent to see how much it would cost to travel to Reno. The aero plane ticket will cost me $2,500. I estimated that I would need about another $1,000 approx for the hotel bill. I also saw that I would need $2,500 for your workshop fees.

I spoke with my wife about attending the workshop. She thinks I’m crazy to want to spend so much money on a “personal enrichment program” as she calls it. She doesn’t support me in this but says “Why are you asking me, You do what you want anyway”.

I have enough for the air ticket but not much more.

I figure it would not be prudent to load up the credit card with debt that we have just spent a year clearing.

I also feel guilty that we have not been able to have a holiday even somewhere locally.

I also have no support network to look after my wife and the kids when I’m away. We don’t have any relatives here but her folks should be here from July onwards so the October one may be better for me.

There is really only one way for me to get the cash to attend your workshop, that is to sell my car. (our 2nd car)

If I can sell the car in time, I guess I would like to attend the workshop. If not I will probably have to wait for the October one.

I’m not trying to make any excuses I just lay the facts and difficulties I have before you as I see them. I do very much wish to make the workshop and meet you but I have to find a way to overcome these obstacles.

Thank you for sharing your process.


You might consider waiting to buy things until you can afford them without going into debt or selling things you need.


You might consider taking your feelings about <spending> and <going into debt> to Tribe.

Friday, January 15, 2010






What role do you think perception has in trading?


Sometimes you have to believe it to see it.



... as in ...


turning on the lamp.


Clip: http://www.moillusions.com/2009/


Back to the Future