© Ed Seykota, 2003 ... You may not reprint without permission.

Ed Seykota's

Frequently Asked Questions

Trading Tribe Home Page  ···  FAQ Home Page & Ground Rules

Tribe Directory - How to Join ···  The Trading Tribe Process

Fractals  ···  Risk Management  ···  Books  ···  Links





September 1-6, 2003



(Quotes from Ed in Red)






Fri, 5 Sep 2003



Dear Ed,
I'm not sure if you got my first email (below). If not, I am resending it. Thank you.

Dear Ed ~

I have been experiencing some frustration over the last several years with my inability to carry through on plans or actions that might have a positive effect on my life.

Example: I learn a trading system that testing shows is sound and workable, and is capable of doing very well in trending markets, but I delay and put off using it real-time. I then go on to another system that I test and become proficient at, but put off using it as well.

When I try to explore my feelings on this, I get a fear of loosing hope and a feeling of loss, coming to the surface. Like having a dream, but being afraid to pursue it for fear it could turn out to be unattainable and thus, no more dream.


It's a feeling and a experience that is so difficult to pinpoint within me that it has taken several minutes just to write the above short paragraph.

Is this just based on a fear of pursuing (and possibly loosing) goals or dreams? Does it have to do with my belief and feelings about self-worth and what I deserve?


Lack of confidence? I try to draw out the roots of this frustrating behavior, and I get some memories of early school days, being told by my class teacher and my mother that I was a bright student and capable of MUCH better grades than I was getting.


I go back earlier and get a memory of a mother beating me for misbehavior. Another memory of just learning how to write the alphabet and spending some time making a "letter" to my mom and giving it to her, only to have her say it was just scribble and throwing it away.


It feels like a heavy weight in my stomach, sort of sadness that wells up into my throat and chokes, and also a feeling of shame for letting others and myself down. I feel the need to ask others for advice and information that I probably could figure out on my own.

It carries over into fear of loosing my child to death or alcohol-related abuse (she is a young adult getting into the party life; my mother is alcoholic and one of my brothers died from alcohol-related disease) ... a helpless feeling like trying to flail away in a deep river but sinking below the surface and choking.

Do you have any ideas or directions to point me in, in my quest to face and handle these frustrations, fears or whatever-they-are?

Thank you and many blessings to you -

Sounds like you are using the process and making progress.


Trying to label, analyze and talk about a feeling can be a way to postpone experiencing it.


Your receiver can assist you by keeping focus on physical sensations and emotions.


For example, whenever you drift over into analysis (fundamentals) your receiver can simply encourage you to fully experience the feeling of needing to analyze things ... until that, too, disappears.




Father of Psycho-Analytics


Freud's methods aim to help the patient get in touch with deep feelings, and then make sense of them through astute analytics.


TTP aims to help the sender experience all feeling ... analytics are optional.


Perhaps, if Freud were to use TTP, he might identify his unresolved feelings of wanting to analyze things, perform public hypnosis on hysterical people, etc.


Then, a skillful receiver might help him focus on experiencing his feelings, in addition to simply labeling and analyzing them.


Clip: http://users.rcn.com/brill/freudarc.html


History and Cases:




Thu, 4 Sep 2003


Peaceful State

Hi Ed,

I have been doing TTP or something that is close to it with a friend.

Last time, I entered some sort of a trance - complete absence of feeling and thought. The state was pleasant or rather there was no issue of pleasure. The main quality was "absence" of almost anything.


I decided to follow the state and stopped sending. There was nothing to be sent. I thanked my receiver and told him I planned to stay like that for ... I did not know how long. I told him I do not mind if he leaves and he did.

The state like this has happened to me before, during meditation. I have tried to evoke it, but it never came when I wanted or expected it. Sometimes it catches me and I let it be, then it disappears. If you have any insight about what I wrote, please, share.

Thank you for your help.

A peaceful, accepting, trance-like state, absent drama, seems to accompany the AHA experience.


When Fred succeeds in getting a message across, Fred seems to rest until some new experience comes up.


Trading from a peaceful state can be direct, business-like, non-dramatic, even machine-like.



Just Following the System


Clip: http://www.boltcity.net/


Wed, 3 Sep 2003


Latest System Results

Hi Ed,

Just to let you know how I'm progressing. I have updated my system so that it increase the fixed fraction and number of units based on profit. So it I get profit of 50% on my core equity from inception then I will go from a fixed fraction of 2% to 2.5% and I will increase the number of units opened per signal from 4 to 5. I have also implemented a modification that says that I will only start trading for real, if the program is showing a 10% increase on starting equity.


The effect of this when testing over the Nas100 from 1991 to 2000, is that the system only starts trading in 1996 and exits as normal in 2000. Returns are reduced, almost halved, but there are 5 years free, where I would have been trading other instruments. If you have any comments, then I'm all ... as normal.

Here are the figures for the equity curve, if you want to graph them.

FAQ does not endorse  traders or commercial products, or offer instrument-specific trading advice, or recommend specific trading system parameters, or tell people what they should do or publish the identity of contributors.


See FAQ Ground Rules


Tue, 2 Sep 2003

Austin Texas Intentional Community

Hello Ed,

I wish to participate in an intentional community, but, upon inspecting the
Trading Tribe Directory, I do not see one that is near my location. Please let me know what the next step is in starting an intentional community.

On another note, I noticed a few minor grammatical errors while reading through the Trading Tribe Process page of your website. I thought you might like to be made aware of them. They are as follows:

In the 3rd sentence of the 5th paragraph under the "Methods" heading, I believe you may want to replace the word 'communicates' with 'communicate'. In the 6th sentence of the 7th paragraph of the same section, you may consider substituting the phrase 'the feeling' for the word 'feelings' after the comma. Under the heading "Getting to the Zero Point", you might take a look at adding the word 'so' to the end of the first sentence of the 6th paragraph of that section.

Hopefully these suggestions help you to make the document slightly clearer and / or easier to read.

Thank you for bringing the TTP to us through your site. I am a babe in the woods with it thus far, but I am already gaining insight from the change in perspective I experience simply by reading the FAQ. I look forward to many enlightening exchanges with you and the rest of the worldwide intentional community in the non-existent future.




Austin, Texas!


You are on the directory page.





Mon, 1 Sep 2003



Dear Ed,

I have a big "AHA" happening!

In the past I have had strong "feelings" about my trades! It is strange because my "AHA" is the opposite of what I thought it would be. It (the "AHA") is me being in an almost totally and absolutely emotionless state. I thought the "AHA" would be something different or just images or things or thoughts. The "AHA" if I could describe it is just "Nothingness".

I have to admit there is an eeriness to this "AHA" in that my trading mind is now open to any kind of price move. I would rather not expand upon this publicly. Too depressing.

When I think about trading now my mind automatically goes into a machine like state. I don't feel the same anymore when I think of the market? In fact, when I think of trading now, I don't feel anything! Is that possible ... It is not normal for me? I think I am getting to the root of most of my trading problems that I have discussed with you in the past few months through e-mails (Re-BUY, Predictions, etc.).

The words "Trading Machine" keep going through my head.

Many feelings and beliefs about trading, investing that I have learned since I was young are changing. I feel like some learned ideas are now dissolving in my mind as far as they relate to trading. My trading has become more "machine" like lately and I have had astounding results.

For some reason a song about John Henry I learned in grammar school has been going through my head in the last few weeks. I learned it like this:

"Well John Henry told his captain....
That a man ain't nothing but a man....
but before I let that steam drill beat me down ...
I'm gonna die with a hammer in my hand..."


Even if you have no conscious trading system, you might still be acting like a machine, carrying out your trading, and other activities, according to Fred's mission to get you to experience things.


Defining your system consciously, committing to stick to it, and accepting the feelings that come up allows you to transcend your own machine-like subconscious behavior.



John Henry


a human machine,

with feelings of needing

to hold on to the past.



Clip: http://www.rabbitears.com/henry.html


Mon, 1 Sep 2003



Dear Ed

Thank You for your excellent site and help.

I trade for several years now. I like to follow
trends. Basically I watch consolidation patterns in prices and buy or sell in breakouts. I had an awful 2002 year. The worst thing was not loosing money but the realization that I was right on most my trades and still losing money.


I realized that something was wrong and that “something” was risk management.


I was placing to many efforts in the entry method and paying no attention to managing risk. I discovered position sizing methods and increased the confidence in placing and executing stops with no second thoughts. I also increased the number of markets I trade. It was a big discovery for me.


My trading results and my confidence increased a lot since then. At the same time I discovered trading systems. It was easy to understand that a trend system can be profitable, because my own method, although discretionary works like many basic trending systems. Presently I stick with my discretionary entry signal, which calls me not to act on all breakouts that I see. The reasoning is that my own “system” has a good historical win/loss ratio so I have no real reason to change.


But after learning more about systems I feel strange (or should I say insecure) because if I were trading a system I needed to act on some breakouts that I’m presently leaving aside. I have impression that one of us is wrong.

Although I realize that the entry method is the least important aspect of my trading it is starting to have an effect on my emotional stability. It sounds a little bit like drama doesn’t it?

Sorry for my English, thanks for listening and also, could you please explain better the SVO-p grammar.

Kind regards,

At present, your overall system seems to include trading two sub-systems and guessing which signals to take.


You might apply the process to your feelings about choosing, making commitment, taking risks, etc.


SVO-p grammar means Subject - Verb - Object - present tense.


SVO-p grammar supports staying in the now and is consistent with trend-following.




Making Choices


can involve a lot of drama.




Clip: http://totalehealth.net/life/c.html