21 - 31, 2004
| Next ==>
from Ed in Red)
Sun, 31 Oct 2004
I’ve been committed for months to attend meetings in Vietnam later this
week so cannot make the workshop, but want to wish all of you a really
great time together and trust you will gain many beneficial insights from
each other as well, during these upcoming sessions in Reno. (I look
forward to seeing you at next one.)
Sat, 30 Oct 2004
Feelings & Paths to Zero Point
I have not yet participated in a tribe meeting. I read the accounts of
people in the hot seat. I notice feelings are usually solicited in the
form of physical sensations (i.e. pain in the stomach, pain in the side,
etc) & less in terms of descriptions - such as fear, sadness, anger,
etc. I wonder if feelings, in terms of physical sensations, are more
informative & useful in the TT Process?
sample size is too small to draw such a conclusion. I ask this question
with the intention of better understanding the process.
On a different note - I assume individuals, outside of the Tribe, attain
states of being & self-knowledge, similar to the condition of Zero
Point. I have in mind the Buddha & others of similar nature. I assume
they are of the DIM variety, or something other than TTP. Any thoughts on
this? I have used the DIM method with limited success. I am excited about
can read all about riding a bicycle, and you can understand all about
riding a bicycle, and still not know how to ride a bicycle.
is incidental to TTP. To engage the process, get into a Tribe and onto the
history of Buddha (Siddartha Gautama) seems to include numerous teachers,
colleagues and students - as well as quality alone time.
on the Hot Seat
Sat, 30 Oct 2004
The calculation of position size is large for very small differences
between entry stops and protective sell stops.
When BS – SS = 0.01, the formula “(Q) = 1/2 % * E / RPS,” results in
placing all of ones equity in a single instrument.
You can mediate this effect by including some "skid" in your
case of stock trading, where margins may approximate 50% of the stock
price, you might find your net equity also limits your trading.
Travelers and Traders
for some skid
Thu, 28 Oct 2004
Goals / Going
with the Flow
Dear Mr. Seykota,
Do you see any conflict between goal setting and going with the flow in
one's life? To what extent do you believe we determine the course of our
can go with the flow to achieve your goals; you may include goal setting
as part of your flow.
and Free Will, like Time, do not exist in nature other than as thoughts we
use to organize our experience - and occasionally, our religious
Calvin, a lawyer
by training, reorganizes the Protestant church and introduces the notions
of predestination, doctrine of the elect and doctrine of
is the notion that God knows the (non-existing) future and may elect some
of us to sainthood while others are not quite so fortunate.
Thu, 28 Oct 2004
I find that when I think about the process of trading (where my stops are,
leverage), I feel much less stressed (or even no stress) than when
I obsess over the outcome (money aspect), i.e. how much I would like the
account to grow to.
Is there a
reason for this?
are justifications we tell ourselves, sometimes each other, to maintain
our identity in a drama.
am willing to accept your experience, without a reason.
Sure to Fill Up on Reasons
case you need to justify yourself
/ or win approval
Thu, 28 Oct 2004
'Weekly Rule System'
Dear Mr. Seykota,
Your FAQ is a very useful resource. Thank you for it.
In your 'Market Wizards' interview you mention "I
was inspired and influenced by the book 'Reminiscences of a Stock
Operator' and also by Richard Donchian's five-and twenty-day moving
average crossover system and his weekly rule system".
What is the Donchian 'weekly rule system'?
In a FAQ entry (Date: Fri, 7 Mar 2003',
Title: Donchian Materials) you write "I once
asked him how he came up with his two-week rule ... he said no one had
ever asked that question before ... it came to him while he was looking
over some historical cash copper prices."
What is Donchian's 'two-week rule'?
Thank you. Best regards.
Two Week Rule:
note the high and low for the previous two weeks.
If short or
out, place an order to buy, good through next Friday above the high; if
long, place one to sell, below the low.
Three-Week Rule is similar, as are all the other Weekly Rules.
Wed, 27 Oct 2004
Ed Says: Modern society teaches us to suppress our
feelings. We learn to hide them, substitute them, disguise them and
desensitize ourselves from them. We strive to disconnect our feelings from
our logic. People tell us, "you shouldn't feel that way." Men
are supposed to hold back tears and women are supposed to hold back anger.
When this interruption of the transfer of experience occurs, Fred
continues to replay the experience, at higher and higher levels, to try to
inform CM. ...
CM may associate the feeling as dangerous in itself and want to block it
out. CM may even program Fred to set up a "Judge" to block the
feeling, thus creating a K-not, that ties up (knot) the feeling as
something not good.
Nevertheless, Fred keeps trying to communicate the experience to CM, and
raises the intensity, of the effort. Fred turns up the pressure on the
"Feelings Pump." ... Eventually, Fred may resort to engaging the
outside world, and arranging a Drama. ... As the drama unfolds, it
provokes the very same set of feelings, so you find yourself, amazingly
and exasperatingly, in exactly the situation you dislike, again and again.
I find myself into longstanding situational drama. I guess I still have
some wounds from the past. It has to do with girls. First, when I was
about 12-13, I fall in love with a girl and sent her some flowers as I
wanted to date her. Her parents didn't allow me as I was told that we were
Then, about 5 years ago, I fall in love with another girl. The problem
was that she already had a boyfriend, and concealed the fact from me.
I don't know exactly what her feelings about me were like and I felt there
was a mutual attraction. Yet I got very, very angry then, and I was very
tough with myself and her. I almost caused a disruption in her
relationship just out of hatred.
The common theme though is that I have always been very tough with my own
feelings out of several negative emotional experiences in the past. Over
the past few years I have been trying to re-frame my attitudes and outlook
on the emotional life to more positive and receptive ones. Yet, I keep
finding myself in the old drama of love triangles. My issue is that
the old ticker is already feeling suffocated and tired out of all this and
I start to feel "disheartened" about it.
Note: although I used the _expression "love triangle", that may
not be the case though. So, a better expression would be
"relationship dramas" or something like that. Typically, the
girl likes me and not her boyfriend.
might consider taking your feelings about wanting to be with someone who
is with someone else into the process.
might even confer with your girl friend, and with her significant other,
if you dare, in the spirit of locating the feelings you have in k-nots.
too are likely working out their own dramas by having you appear in their
you become willing to experience your own forms about the matter, you gain
choice and might be able to try some new angles.
bird needs the other two
order to set up its own drama.
Wed, 27 Oct 2004
I just wanted to introduce myself. I've been reading much about you and
your trading style for some time now. I have been working in Asia since
1994 on the trading side for major global brokers. I am curious to know if
you work with many traders based in Hong Kong?
I see there are
a few communities of traders in Taiwan, Australia, and Japan. Japan is one
of my main interests. Great long/short market and lots of market activity.
I've developed a
long/short equity trading model - mean reversion and trend momentum based.
Would be interested to hear your thoughts about it at some stage.
Just wanted to
take this time to thank you for all your great tips and hints from your
are welcome. People write to FAQ from all over the world.
Tue, 26 Oct 2004
I was reading “Trend Following” by Michael Covel, which I purchased
this week, when I learnt about the Trading Tribe. I have looked at trading
and personal development as being inseparable for some time. You are right
…. it is a good idea to get together with fellow traders to share
experiences and therefore to grow.
A guy like you must be very waddling through emails so I’ll keep it
My surprise was …. that “Emotional Intelligence” and “Reminiscences
of a Stock Operator” were together on your web site, as they are my most
prized possessions. This is very encouraging sign for me.
Having suffered from toxic parents and other delusions Amazon will get
another order from me soon.
With your permission I’m going to start the Trading Tribe in Melbourne,
Australia. Can you put my name on your web site and hopefully other
traders in my area will get together.
Send your contact information, including an email address suitable for
Tue, 26 Oct 2004
Which is the
more profitable method?
Which is the more profitable trading method - buying on the pullbacks or
buying on the break-outs?
one is a method; both are notions. They become methods when you
integrate them into a discipline.
Tue, 26 Oct 2004
& 24 Hour Trading
Firstly, I thank you for the contribution you make to the trading
community. I am not aware of anyone who is helping so much while directly
asking for so little.
I have two questions to ask you.
(1) I have recently read Atlas Shrugged by Ayn Rand and truly enjoyed
learning about her philosophy called Objectivism. I was surprised to
experience a deep positive emotional response to her philosophy. I am
assuming you have read the book. I am interested in your opinion of
(2) My partner and I have been developing trading systems and testing
software over the last 18 months. We now find we need to make a decision
which I hope you might help us with. We have many decades of historical
futures data to back test our system but this data does not reflect
today's reality of almost 24 hour markets.
We have to
decide whether to restrict the trading of our system to the day session or
to trade the electronic sessions as well. In our opinion the 24 hour
trading has not been around long enough for any valid historical testing.
While I can see advantages and disadvantages to both ways, I have this
nagging voice saying "you can't test a system in one type of
environment (the day session) and then expect the results to apply in a
different one (24 hour trading)". I would appreciate your thoughts on
Objectivism holds that all beliefs, conclusions, and convictions must be
established by logical methods of inquiry and tested by logical methods of
objectivism and Ayn Rand in her personal life seem to have trouble with
computations about love.
The markets seem to keep doing the same kinds of things, no matter where
or when they trade or how we measure them.
Fancy New 24-Hour Clock
lead you to think
the markets are somehow different.
Mon, 25 Oct 2004
(1) I use a moving average and mean price to time the pattern breakouts.
(2) Fibo levels to locate stops that move when the market moves
(3) Exit rules determined by the environment which is either one of two
variables that are easy to define.
[I have] a lot of work ... on (1) to (3) above but the strike rate without
patterns determining entries, is a woeful 30-35% versus the 45%-75% I get
when I have manually back tested (13 currency markets over 11 years/approx
Would appreciate some advice on how I might proceed further.
your notions of "patterns" to computer code may help you clarify
Sat, 23 Oct 2004
Do we learn to teach our kids or are we taught to learn ?
the moment, the one is the other.
Fri, 22 Oct 2004
The author Andre Van Lysebeth in his book Tantra, the cult of the
feminine, explores India's history and culture in order to establish a
very important, comprehensive and rich study of the Tantra.
I studied it this week and I had the opportunity to see a lot of
convergences between the Tantra and TTP regarding the way we see life,
feelings, sex and human perception of reality.
It is amazing how the 2 "ways" support each other regarding to
concepts such as the now moment, the k-nots, Fred, Under-Fred, feelings
and the wisdom of the concept of the passing ahas in life.
If I felt a new meaning for life when I learned about TTP and your amazing
view of life, the wisdom I acquired is now expanding with the Tantra
principles and Yoga.
I felt a necessity to share this with you and the readers of FAQ, so I
just wrote it down. I hope it does not extrapolates the FAQ's
non-endorsement rule since the subject of this post is really a matter of
comparative study, in the scientific sense of the expression, rather then
endorsement of an
author or book.
Thank you again and my very best regards. I wish you and your family all
TTP seems compatible with many practices of personal growth.
means method or path.
tantra connotes the practice of developing the feminine aspect of
Sex and Trend Trading
dance with the dream
being able to stay on task
the entire campaign.
Thu, 21 Oct 2004
Ed says, "This visitation program is available
to Tribe leaders who are graduates of any Workshop."
We have ... an open invitation for you ... Half of our members have
been to IV TT ... I am ready for your next workshop of expanding my
profitable trading growth. See you soon.
I am open for visiting Tribes early next year.
Fri, 22 Oct 2004
It’s been a year since the October 2003 workshop in Reno—here’s a
summary of the progress I’ve made since then:
If you’ll recall, I was a “day trader” back then. A
mechanical intraday stock trading system had worked very well for me
during the period 1998—2001. However, that system’s profitability
slowly evaporated. (In hindsight, this was as inevitable as night
following day.) I endured the better part of two years barely profitable
and increasingly frustrated as I vacillated between various short-term
trading approaches. By the summer of 2003, I was at the end of my
trading rope—I spent all day in front of the screen obsessing over
ticks, my stomach contorted, my thoughts a roller coaster of emotion. At
the end of the trading day I was left spent and dejected—there wasn’t
a lot of energy left for my wife and kids.
I had memorized the Market Wizards books from cover to cover, I could
quote passages from “Reminiscences of a Stock Trader,” I had spent
thousands of dollars on trading seminars, logged thousands of hours
analyzing charts, indicators and systems. Yet there I sat a marginal
trader. It seems that I knew all about successful trading—I just couldn’t
I remember discovering your Trading Tribe site and reading something you
wrote along the lines of: “Your own psychology is
likely to contribute more to your success than your system.” This
hit me as absolutely true. As I read other traders’ experiences with
TTP, I realized I should explore the process. Nonetheless, I was
ambivalent about attending the workshop. TTP seemed a bit exotic--the idea
of revealing emotions publicly to strangers made my stomach churn.
However, with encouragement from my wife, I summoned the courage and
At the workshop, I was initially very self-conscious and uncomfortable. In
my daily life, I had been displaying a façade of confidence and success
to my trading friends and peers. It was not easy to drop this veneer. But,
as the workshop went on, I gradually came to accept the awkwardness that I
felt as I revealed my feelings of doubt and low self-esteem. As the
workshop progressed, it felt very refreshing to interact free of the
facade. To share feelings with a non-judgmental, empathetic group of peers
was a wonderful thing.
My “snapshot” I chose during the workshop was “integrative trading.”
I wanted to make stock trading a part of my life, not my entire life. I
did not want to be distracted when my family deserved my full attention.
At the workshop, I realized that crucial to reinventing my trading was an
honest examination of the emotions that were driving my trading and my
life. The TTP allowed me to do this. With the help of the receivers at the
workshop, I understood that I had been hyper-trading as a way to keep
myself from feeling lots of stuff.
While high on
price action, I was avoiding lots of “bad” feelings. Of course, as I’ve
come to appreciate, they couldn’t be avoided indefinitely--Fred doesn’t
like to be ignored. (I’m reminded of the old margarine commercial: “It’s
not nice to fool Mother Nature!) Fred kept turning up the intensity to the
point that either I quit day trading or something was gonna blow.
Anyway, a year after the October 2003 workshop, I have realized my
snapshot: I created a trading style that was right for me. I no longer
day trade. I have developed a very simple stock trading system: I buy
when I get a signal, put on a trailing stop, and hold until the trend
ends. Manage the risk. Over the last year my average holding period has
been three weeks. I’ve held many positions well over a month. An
eternity for a former day trader!
modest leverage, my return year to date is 35%--this using a long only
approach in a flat/down stock market. Back-testing shows that with more
leverage I could realize better returns for accounts tolerant of more
risk. But, the best part of my system is this: I get to walk my kids to
and from school every day. I feel great about the quality time I spend
with my family.
I now have a new snapshot that I creating with the help of our local
tribe: Financial Freedom. I would like to maximize my trading system in
order to achieve this goal. To this end, I’m contemplating managing
other people’s money. A stockbroker for years before I quit to trade
full time, I’ve been very reluctant to take on clients again. And now
that I am seriously considering managing money, a stack of emotional stuff
has appeared. So I’ve decided to attend the upcoming workshop in
November. Hopefully I can get some advice on undertaking a money
management business, while also beginning to work on the issues that are
cropping up. Back at the 2003 workshop, I was a complete TTP novice, so
some of things that transpired flew over my head. Now that I know a bit
more about TTP, I expect to be able to better appreciate the upcoming
Finally, I would like to extend my heartfelt thanks to you for the great
service you have provided to myself and the community of traders out
there. I’ve spent years now in the brokerage and trading world and
unfortunately there are so many in this business who are only looking to
extract what they can for their own personal gain. Your willingness to
invest so much of your time and energy giving rather than taking is a
great inspiration to me.
Your story can inspire others to join a Tribe and engage the process.
Fri, 22 Oct 2004
I am a big fan and absolutely fascinated with your works. I am currently
living in Washington DC and I tried to contact the local Intentional
Community leader in the area but I cannot get a response back. I would
love to be involved with your Trading Tribe but living on the East coast
does not permit that. Do you have any suggestions as to how I can get
involved in the whole process. I am eager to listen, learn, and overall
Thank you for your time,
the Tribe Directory Link above for how to join / start a Tribe.
Fri, 22 Oct 2004
This week I started reading the Bible. I am only halfway through Genesis
and I already have FOUR nice aha’s:
1) First Fundamental Analysis in the history of mankind (Gen. 3): Serpent
and Eve discussing the ‘whys’ and ‘why-nots’ of eating the fruit
of the tree of knowledge. Result: A very, very, very bad trade against the
flow. Ultimate account destruction…loss of ability to live in the
here-and-now … death.
2) First Tip in the history of mankind (Gen 3): Adam listening to Eve and
trading on her analysis/recommendation. Very bad trade indeed. Very much
like Jesse Livermore holding up the cotton market based on Percy Thomas’
analysis. And look at his excuse when God confronted him: “The woman
whom YOU gave to be with me, SHE gave me fruit from the tree and so I ate.”
Jesse Livermore: “But I was not myself, I was another man – a
Thomasized person.” Notice the lack of SVO-p language.
3) Commitment and the power of intention: Abel and Jacob are deeply
committed to God. Their intentions to do the ‘hard work’ are
unadulterated. Abel sees exaltation in doing good to others (Gen 4) and
God looks upon him with greater favor than he looks upon Cain who does not
seem to be able to master his craving. Jacob buys the first-born rights
from Esau (Gen. 25) and with them the responsibility to deliver the Hebrew
seed to the promised land of Abraham. So he receives all of his father’s
blessings (Gen. 27).
4) First documented hot seat in history (Gen. 32): Jacob grappling with
himself all night. I believe the Angel he grapples with is Fred. He has a
lot of somatic feelings including the pain in the socket of his thigh
joint. This is very similar to the stomach, chest, neck, and head aches we
feel when we do hot seats in TT. Since this is Jacob’s first hot seat,
the pain stays with him a few days [as happened with me with my first hot
seat]. The hot seat takes all night. By the time it is over, Jacob feels
peace and great clarity. His feelings are now aligned with his intention,
with his system. He is committed to his mission of ‘building’ a Hebrew
nation, with all the hard work and sacrifice that it entails. First order
of business, he changes his name to “Israel.”
forbidden comestible is from the tree of the knowledge of good and evil.
The admonition is: don't eat judgment fruit.
of the Tree
for Adam and Eve.
Fri, 22 Oct 2004
Ed Says: The 25% optimal bet size is for a very
specific situation: namely, a coin flip process that pays 2:1 with a 50%
chance. You know your exact risk in advance (your bet size).
In actual trading, even with stops, you cannot predict your exact risk.
You might also like to consider if your gut can actually withstand the
kind of drawdowns that a string of 25% losses might produce.
Yes. As I see it, the coin flip example provides us with constant luck and
payoff while in historical simulations we have the average luck and
payoff, which may vary in between, and in actual trading. Moreover,
slippage and a lot of other operational and emotional risks are not taken
into consideration in back-testing.
Ed Says: In actual trading, you might consider
taking small non-correlating positions, each with a 1/2 % risk to stop, up
to a total of 25%.
With this plan, your winners and losers tend to average out so you get the
same overall gain with a smoother ride (less volatility).
I am going to work with only one or two (highly correlated) markets and so
I am likely to define optimal fraction with the stomach, after thorough
simulations of course.
you are willing
experience your stomach.
Thu, 21 Oct 2004
I just wanted to say thanks for some of the books (see resources). Some of
the stuff takes a few days to sink in before I realized the significance.
I've been in NYC trading off and on as a Market Maker for 5 years now.
(now working on refinement of a trend system) Watt's book really hit me
hard in the sense that I have been using "Hunch-Centric" trading
and I was mainly missing the a lot of the calculation and refinement of
what my ideas are ... (hard to realize as I was successful with my
previous methods - probably overly so as I was trading oil and gas stocks
at the time of near the time of 9/11- "funny - mentals" had a
lot to do with market movement). Anyway seems to make sense to me now. The
year or so required in almost any floor product - is to learn physically
the calculation of positive expected return. Strange that I missed this
stuff as I'm an engineer.
Le Bon's book has also been helpful in clearing up a lot of mind blocking
greed - amazing to realize that the environment changes for humans - but
everyone effectively gets about 70 years and follows similar trends.
Also finally got a hold of original article from Donchian - could only
find it in Chicago - suprisingly not in NYC). Suprising to me that
some of the adds are selling hope like the ones in some of the periodicals
Anyway just wanted to say thanks for some of the recommendations.
Your Risk stuff was good too.
Gustav Le Bon talks about the powerful effects of a group on the
individual. We also use this effect in TTP to facilitate personal
in Favor Say, "Aye."
Aye, Aye, Aye
some organizations, members learn to think one thing and say
The Trading Tribe, we use group pressure
encourage members to align and experience their own feelings.
Thu, 21 Oct 2004
Last night on the hot seat I fully experienced depression and sadness by
going through in first person what it likes with my fiancée on her
I don't have a
clear message for its positive intention though. I somewhat feel that it
is a warning signal about pending or even existing threats to something
that is important to me, and thus help me stay focus to what I have NOW. Is
my session "complete" if I cannot arrive at a crystal clear
positive intention message? Thanks.
As an aside, I was struggling to really experience the feelings and was
pondering quitting (I guess that's one effective way to avoid feelings)
until one receiver asked, "Are you willing to experience
answer is a resounding yes, off I go and never look back. One thing I do
learn about receiving is to share the sender's feelings: one way to
validate the sender, instead of roaringly cheer him, is simply to
Thanks for all the teachings.
might consider taking your desire to complete things into the process.
can be a form of understanding, agreement and, ultimately judgment.
simply acknowledges forms without trying to understand or judge them.
to develop understanding and empathy generally interferes with TTP.
multi-component, weighted “garment” enables female and male wearers to
simulate and “experience” more than 20 of the typical symptoms and
effects of pregnancy.
hands-on, experiential type of learning, wearers find out what it feels
like to be pregnant and gain a realistic understanding of the changes and
demands imposed by the pregnant condition.
Thu, 21 Oct 2004
Sectors -vs- Correlation
You've said that when selecting the markets to trade, one might want to
small non-correlating positions. You've also said that it's desirable to
select markets from trending sectors / groups.
By definition, if at a given point in time one selects markets from
trending sectors, are they not, at that moment, correlated and therefore
at odds with the above statements ?
At the moment two markets simultaneously hit buy stops, they correlate
tightly, particularly in the very short term.
diversify, include an instrument that breaks out while others sleep.
example, take stocks from different sectors - or commodities from
and soybeans might break out the same day and thus correlate well in the
very short term.
portfolio of silver and soybeans provides more diversification that a
portfolio of silver and, say, more silver.
opposite of diversification is plunging, betting it all on one horse.
Spot Silver /
Spot Silver /
July Silver /
Guide For Plungers
to Oklahoma Slim.
Thu, 21 Oct 2004
It is interesting to me that the work of Bohm is mentioned a couple of
time in recent FAQs. His work, along with Pribram's and a few others has
always resonated well with TTP for me. In fact, I gave you a book at the
last workshop that explores the holographic model of the universe. I did
not know I was going to give you that book when I brought it along with me
to Reno. I did not even know why I brought it, other than to occupy me on
The workings of the under Fred network are mysterious when viewed from the
perspective of the traditional model, but elementary under the holographic
TTP practitioners who have relationship AHA's routinely report Bohm
Phenomena: an associate inexplicably changing, simultaneously, at a
"Simultaneous" Go Master
actually just playing
Thu, 21 Oct 2004
I read FAQ this morning and notice a passage that implies you have an
intention "to develop a team of traders the likes of which the world
has never seen." I am writing to let you know that I am pleased to be
a part of the team.
(I assume it is yours, though it may just be all of us) seems to be
manifesting as results. I anticipate more dramatic results as we / you
continue to clarify the intention. I know I am part of the team, as I
speak to other traders from the May workshop that have similar intentions
Perhaps at some
point the team acts more as a cohesive unit (like a baseball team for
instance). Right now we seem to work as independent operatives (along with
our sub-teams of tribe members), checking in to headquarters every now and
report results and send and receive support with other team members.
I am totally committed to my intention of becoming the best trader and
person I can be and using my right livelihood to help others. The Trading
Tribe is consistent with my intentions, so I stick with it. I continue to
"wash potatoes" and experience the AHAs as they come. If you
want to speak to me about any specific actions to further your / our team
building intention, I am right here flowing toward right livelihood. It is
exciting to be a part of such happenings.
See you in November!
Team is a Group
helping the coach
stand up again.
Date: Thu, 21
I used to fear exploring, now I explore the fear!
Thu, 21 Oct 2004
I've been a full-time trader for the last 8 years, trading equities (for
myself and for clients) on the Indian stock exchanges.
I've had mixed results:
The first 3 years were stupendous - my accounts were up more than 50 times
(that's 5000%) during that period.
During the next year, I was down about 75%.
During the next 4 years, I've performed indifferently, and my trading
equity today is almost exactly where it was 4 years ago.
Ed, I've been reading your site for about 6 months now. I've been
fascinated with your work ever since I first read the Market Wizards
interview. I've read most of the FAQ on the site, too. I'm eager to join a
Tribe, and have been in touch with the leader of the Chennai Tribe in
India. However, Chennai is about a thousand miles from Mumbai, and so
geographical considerations make it difficult for me to join. I intend to
start a Mumbai tribe (or join one, if someone else starts one before I
do), but don't yet wish to commit to that.
For the first 3 years of my professional trading career, I used a predictive
approach, based on the Elliott Wave Theory. While my results were
spectacularly good when my predictions were right, they were also
spectacularly bad when the predictions were wrong. I have now abandoned
that approach. I have actually concluded that I was very lucky to have
done as well as I did during that initial period.
I've spent most of the last few years developing a Trend Following System
for myself, and now believe I have one that shows potential. However, I am
struggling with an issue that I am finding it difficult to resolve
I am aware that FAQ does not recommend system-specific parameters, so I
shall generalize my question to the following: "Do you believe
that it is desirable that a good trading system allow for NO discretion on
the part of the trader? Do you believe that a trader is making a
compromise by settling for a system that continues to give him SOME
discretion in the day-to-day decision-making process?"
I ask this question because I am finding it VERY difficult to completely
eliminate my role in the entry/exit decision-making process.
In conclusion, Ed, I wish to say to you that in all my years, I have never
come across another human being who is as generous and helpful as you are.
I thank you for the work you are doing, and look forward to meeting you
mechanical systems have some discretion and all discretionary accounts are
subject to the mechanical nature of the trader.
Wave does not appear to predict anything; it tends to serve as
justification for hunches.
man and machine