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October
12-18, 2003
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Questions
(Quotes
from Ed in Red)
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Answers
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Sat, 18 Oct 2003
How about
Schwartz?
Gentlemen
Mr. Seykota stated in article "Day trading" from 8 October:
... If
you know a consistently profitable day trader you might encourage him to
share his audited track record and method. As far as
I know, none such exists.
So how about Martin Schwartz ?
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Schwartz
wrote about his trading experiences in Pit Bull.
One
way to break an addiction is to get Fred and CM talking about it.
As his success on
Wall Street grew, he began his own fund in which he would manage other
people's money as well as his own, a move he would regret. The stress of
running the fund contributed to his developing pericarditis, which nearly
killed him.
His doctors
advised him to slow down his lifestyle, so at the age of 48, Schwartz, along
with his wife and two children, moved to Florida where he took up golf and
developed a daily routine that allowed him to keep trading, but at a more
relaxed pace.
This is one of
those rare autobiographies where the subject unintentionally portrays
himself in an unfavorable light. As he grew ever richer, Schwartz became
consumed with generating even more money and prestige so that he could
"run with the top dogs." Inadvertently, he has written a
cautionary tale on the dangers of being addicted to money and power.
-- Publishers
Weekly reprint on www.amazon.com
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Fri, 17 Oct 2003
Incline Village
Tribe member visits the Manhattan group
Hello Ed,
A member of your Incline Village Tribe recently visited Manhattan. He was
very gracious to take time off from his busy schedule to have dinner with us
and then after dinner joined us for our tribe meeting. He shared many of his
own experience with us, provided much valuable information on the correct
way to do TTP.
I took the hot seat that night. I had a profound experience, the Incline
Village member actively participated in being a receiver, we all learned a
lot from him. Fred has many allies and they seem to show up at the right
time !
Between the two groups in Manhattan we now have six meetings a month. It did
take us a while to tone down the story telling and focus just on feelings
and bodily sensations. However now the results are nothing short of
spectacular. We can visibly see the person start to get transformed before
our eyes when Fred makes his appearance.
Best Regards |
Yes.
Members from one Tribe seem to fit in well well with others, and help
cross-pollinate.
Learning
2 B
Clip: www.fungrams.com/
images/beeshaker.gif |
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Fri, 17 Oct 2003
Workshop
Dear e-tribe friends,
I want you to know that I am traveling to USA to participate in the TTP
workshop in Reno.
This will be my
first non e-TTP experience . I am very excited, curious and intimidated (all
together) for this Workshop, but I'm sure it will be very valuable. I will
not be participating in the tribe mailing during my travel, but I will be
back in November. |
OK. |
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Thu, 16 Oct 2003
Free
Trade
Dear Ed,
Your theory about free trade is very interesting.
Could you could
give an example of what you mean by "entitlements"?
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Yes.
Those who oppose free trade typically wish to protect or establish
"entitlements" to sell at prices above competitive free market.
While such price support strategies may seem to work (for vendors) in the
short term, shielding an industry from competition de-motivates long-term
innovation and efficiency.
Restrictions against free communication (between producers and consumers;
between Fred and CM), tend to weaken the entire system.
The
Best Trade Policy
Let
the Traders Handle It.
Clip:
www.amatecon.com/etext/
cftoi/cftoi |
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Thu, 16 Oct 2003
Position
Sizing
Hi ho, Ed,
Today I got an email saying "I owe you one for ABAX." because two
months ago I recommended buying at $8. Today it closed at $18.84.
That's
ok, but my real AHA is applying what you taught me Friday about position
sizing to a stock like this. Annotated chart is attached, and my analysis of
your teaching:
(A) Buy at $8 with $7 stop in a portfolio with core equity of $62,000. Risk
1% = $620.
So 620/$1 = 620 shares.
At $9.16 we have $719 profit.
(B) So to add, we find our new logical stop, which is $7.99. (9.16-7.99)=
1.17, divided into the profit of 719, we can buy 614 more shares and have a
risk-less breakeven exit.
(D) Today we would’ve been stopped out at 16.99 unless we had pulled the
stop for the first half hour, as it spiked down and spent the rest of the
day climbing to new highs. In that case we are still long at 18.84. Current
situation then is:
(18.84 - 8) * 620 = $6,720 profit on original position, and (18.84 - 9.16) *
614 = $5,943 on additional position ... so a total of $12,664 in a $62,000
porftolio, or +20% in two months.
Now I imagine one could continue to add:
(C) To add a second time at the next new high, we find our new stop which is
$8.99. We enter at 9.71, so the difference is 72 cents.
Our profit at this buy is ((9.71 – 8) * 620 shares )+( (9.71 – 9.16) *
614 shares) = $1,397.
$1,397 / 0.72 = 1,940 new shares. We are now long 3,174 shares at an average
price of $9.27 with no capital risk.
Additional profit as of today on that third add is (18.84- 9.71) * 1,940
shares = $17,712.
Add that to the profit of $12,664, and we get $30,376, or 49% return on
capital from this trade.
With your method, I can be wrong 9 out of 10 times, and if those stops are
at 1%, even allowing for skid, an account can make plenty of money.
I'm getting the idea ! |
Yes
... The idea is to control initial entry risk ... profits take care of
themselves ... occasionally you might get a big winner, as you seem to
demonstrate.
Sometimes
it also pays to notice the degree to which the press discounts the move ...
especially through magazine covers and jokes.
Markets
Move
until
there is nothing more to discount. |
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Thu, 16 Oct 2003
The Trader's
Window
Hi Ed,
I apologize if someone has already asked this question unfortunately your
website does not have a search function. You wrote the prologue in the book
“The New Market Wizards”. Is that story a segment of a larger piece of
work that has been published? If so is it available?
I look forward to reading your new book. Can you give us an update on when
you expect it to be available?
Congratulations and keep up the great work on your fantastic web site! Go
Ed, you da man ;-) |
I
don't pre-dict the non-existing future.
I
mostly simul-dict things as they occur.
Hummingbird
Pointing
out the Fuchsia
Clip: http://www.sudberry.com/301.jpg |
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Wed, 15 Oct 2003
Hi Ed,
I have been a professional trader for 10 years, and one aspect of my trading
that keeps coming up is self-sabotage. I am trying very hard to realize
the reason for this but am unable to.
I am extremely
depressed by this.
How do I figure
out this problem with my sub-conscious? I am currently not in a tribe as
there is none in my country. Thank you for your advice. |
Realizing
reasons and figuring things out are tools of fundamental analysis.
Trend
Following simply rides along with the flow.
There
is nothing to figure out.
Simply
ride along with your feelings and allow Fred to communicate your experience
to CM.
Going
with the Flow
Clip: http://www.frogz.co.nz/ |
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Tue, 14 Oct 2003
Chartbook 95
Dear Mr. Seykota:
I used to be a subscriber to Technical Tools end-of-day prices and used the
Chartbook 95 program. When I bought the subscription I also received a
25-year commodity history file.
I have recently begun trading again and would like to be able to use the
Chartbook95 program to view this historical data (I don't need to purchase
current data), however, the program has an date expiration date and
therefore no longer works.
Do you sell or offer a license to update this program so I can use it again? |
You
might contact Troy Barber at troy@oowdg.com |
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Tue, 14 Oct 2003
Opportunities
every day ...
things are getting faster, all of my friends, say go ahead and ask her ...
Every day there are 20+ new all-time highs from which to choose. It's a
cornucopia these days. |
Yes.
Life can be a cornucopia of opportunity.
When
you work through your unresolved dramas, what's left is to simply ride along
with the trends of life.
Plenty
for
those willing to have it
Clip: www.mnh.si.edu/garden/
history/welcome.html |
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Tue, 14 Oct 2003
Hi,
I have been an full-time independent trader for 5 years where I have been
making fantastic money for the past 5 years without a losing week! For the
past 8 months however i have made very little money.
The opportunities
I use to find no longer seem to exist. While I don't follow a true trend
trading methodology, and am more of an arbitrage trader, I am in a very
bad place mentally right now as opportunity has dried up.
I have evaluated
trend trading systems historically, and am unable to deal with the risk that
they could possibly incur. Any advice for someone who is has been so risk
averse for so long?
I know what risk
levels I am comfortable with and it seems to have a lot to do with how
confident I am in my methodology.
But trading trends
is so different than what I used to do. I fear I might not make it as a
trader anymore. Any input would be greatly appreciated. |
You
might take your feeling about your trading ability into TTP and find out
what Fred is trying to tell CM.
Some
see water and some see dry.
Clip: http://www.sunspot.net/news/
weather/bal-md.drought27aug27,0,
3685106.story?coll=bal-local-utility |
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Tue, 14 Oct 2003
Nightmare
effect
Dear Ed,
I have been reading about TTP for a while now and I'm very impressed with
the results described by its participants (I read every experience described
in FAQ). I was already planning to start it by the end of the year (after my
partner finishes a project in which he is involved right now) when I
experienced something that really amazed me because of its similarity to the
TTP participants' descriptions: a nightmare.
In the past, for several times I sabotaged myself in a situation that keeps
coming back in different variations. Those sabotages caused me a lot of pain
and emotional damage. As the end of the year is approaching, I identified
the beginning of the same situation (although in a different variation) -
which could cause me the same damage all over again, but, of course, CM was
avoiding it.
Last night, I had this very INTENSE frightening scary nightmare which
made me experience that fear I (CM) was avoiding and when I woke up I had
this incredible, amazing AHA which made me feel extremely good and happy
about that nightmare and about myself.
I have no words to
describe it. Together with that incredible sensation I also felt a very
annoying headache (which lasted for 5 minutes approximately), my mouth and
throat were very dry and I also was a little dizzy. After a shower and a
glass of water, everything was normalized.
That was when I remembered all the descriptions from FAQ and I thought that
what I had just experienced could be the same thing as the TTP.
Well, Ed, people
can enter a comma by a trauma (an accident, for example) or be induced by
doctors to it. What I'm thinking right now is that TTP can be a form of
inducing this kind of constructive nightmare that I had (as well as its
positive effects). After last night's nightmare, I really learned what I was
doing to myself and what would be the natural consequences of my
self-sabotage. I though: I f I could induce my self to this kind of
nightmare again... then it stroke me: TTP!
I really would like to hear your thoughts about this event and if is there
an indirect relationship between this experience and TTP. Thank you very
much.
I wish you all the best.
Sincerely,
|
Fred
intends to inform CM about what Fred experiences.
This
may occasion an AHA. The flow of experience between Fred and CM
naturally occurs just in the process of life itself.
When
CM develops judgment and unwillingness, CM may resist Fred's
communications. If so, Fred tends to turn up the volume to get CM's
attention.
You
may have daydreams, dreams and nightmares.
If
CM continues to resist the message, Fred may continue to turn up the volume,
perhaps enroll you in repetitive real world dramas.
TTP
intends to enhance the flow of experience between between Fred and CM.
Over time, this tends to increase natural wisdom and decrease the level of
drama.
Nightmares
Just
Fred
trying
to communicate
experience
to CM
Clip: http://www.artie.com/cm/art/artists/
artieromero/artieromeroport.htm
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Mon, 13 Oct 2003
Computer
Program
Dear Ed:
My friend put together a computer program with my market guidance and his
computer savvy. I have been finding many more opportunities than usual.
Thanks for the idea of using a computer generated program!
About my e-mail to you on Wed, Oct 1 titled up 100%. You said I might want
to check my Sharp and Sterling ratios. My volatility is huge but getting
better with your help, my annual performance compared to the market is good.
I am still figuring my trades for the year so I don't have the actual ratios
yet.
Thanks |
Computers
are particularly useful for scanning lots of stocks and finding the ones
that are trending.
Colander
It
lets the water pass through
and
catches the pasta.
Clip: http://holmesequipment.com/
images/collander.jpg |
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Sun, 12 Oct 2003
At One with the
Knot
Ed,
I am beginning to wonder if I even trade to make money, at times I seem to
acknowledge the fact that this is a perverted game of me vs. myself.
The desire to
win seems to take a back seat to a desire to let the game play out in its
usual ways with amazingly consistent outcomes.
It seems almost
futile to continue trading unless I can resolve my personal battle. My
belief and commitment to trading success seems to hinge on the resolution of
this battle.
Oh how I try to
figure it out, engaging in endless loops of futile thinking that in the end,
seems to be part of the game (drama).
Why is it that
trading success feels almost unattainable to me at times, especially after
my drama unfolds, which is always after a run of good trading. What is it
that Fred is trying to communicate to me? Why can I not see the forest for
the trees? Why does my knot feel bigger than me? Why do I feel like my
knot is me? |
Fundamentalists
like to ask and answer why questions and generate reasons.
Trend
Followers simply go with the flow.
See
TTP Process, above.
You
might take your feelings about wanting to figure it all out into TTP.
Something
to Figure Out
Rearrange
the pieces
to
show a profit of one square.
Clip: http://www.antilles.k12.vi.us/
puzzles/index.htm |
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