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January 15-22, 2004




(Quotes from Ed in Red)


Thu, 22 Jan 2004



Stumbled across the site from Turtle Trader

www.turtletrader.com  and was really relieved with what I found. The technique with the judges and trapped emotions was exactly what I have been looking for.


I have been studying my mind, its behaviors, conditioning, motivations, etc for eight years no one has explained it so clearly and simply as your site. Keep up the good work. I really appreciate it.


By the way, I am an American living in Holland how can I start a tribe? I am not close enough to any to go consistently. Also, can you send me info on one on one, maybe I make a trip out there.

Thanks again,

To start a Tribe, and / or apply for private consulting, see the Directory Page.

Thu, 22 Jan 2004


Life of Celebration

Dear Mr. Seykota,

Last night my hands feel numb for no reason. I had a physical check two weeks ago, and the results weren't too good, so I was worried if the numbness is health-related.


Suddenly I remembered what you always say about "Celebrate the Feelings." So instead of fear, I tried to see the numbness as just gauges, neutral on its own, but just Fred trying to communicate to me. The numbness was still there, but I was less paranoid.

Then it struck me: If I can celebrate my feelings, any feeling, every feeling, then my life is just a life of celebration!! I (and I guess most people too) have no problem celebrating happiness and joy, but if I can also celebrate fatigue, sadness, jealousy, anger, frustration, hatred, fear, if I can also celebrate the tightness on my shoulders, discomfort on my back, numbness in my hand - then my life will be just full of celebration. Wow!






Celebrate It


just the way it is.


Clip: http://www.loudwind.com/





Wed, 21 Jan 2004

Makes it Back Fast

Dear Ed,

I experienced over a 15% drawdown while the market has been going straight up! I tried something different because of what I have been learning from you.

When I was driving by myself I shut the radio off, and when I was home alone I shut the television off and just let my mind think about all things, including how I was trading wrong. I experienced being angry, upset, depressed etc. I did this for two days.

I tried this because I have been thinking about how you focus on the way people think rather than specific methods of trading. The quietness worked, it let me experience feelings without interruption and I could not believe how after many, many, many bad trades how fast I made most of my money back!

I have been working out the bugs for my computer program and am starting to get the rhythm of it. I still do manual charting browsing by eye and am noticing that through experience, I was doing so much work, that soon, the computer will be doing. I probably will still browse through paper charts once a week.

How is your book coming along?


Clip: http://www.sawadee.com/




I envision a first draft of the book around mid-year.

Wed, 21 Jan 2004


TTP 04?


Just wandering around the Interworld. Started out searching for information on Money management. Trolling around for input into an area of my own trading which is still in the process of resolution.


Incorporating volatility into a position sizing formula vs. a fixed percent, fraction, or ratio. Hoping to definitively decide on the best method for my current situation. Wandering about seeking random input.

But the reason I am writing is to inquire if you plan an 04 TTP Workshop? Iím thinking it would be a good thing, to attend.


I am planning to deliver a workshop later this year.


You might consider taking your feelings about making commitments into the process.

Tue, 20 Jan 2004


Big Thank You!

No Trend Trader Conspiracy

I finally discovered (after six years of trading and testing trading strategies) a system that makes me feel warm and fuzzy all over! The most difficult opponent to over come was my own impatience, lack of introspection, and a need to control results.


The TT FAQ and the Turtle site at

www.turtletrader.com is a good source of inspiration.


Due to lack of confidence and frustration, at one point, I imagined a Trend Trader Conspiracy. The primary assertion of Trend Trader Conspiracy is the assertion that trend trading works -- a ploy to suck fools (my self) into the market and part them of their cash.

Now I have something I am happy with and must thank you, Ed, for your observations and encouragement.

You are welcome. Con-spire is from the Latin: breathe-with.






The World is Conspiring


to do me good.


Clip: http://www.1stpaintballs.com/


Wed, 21 Jan 2004

Arizona Tribe?

Hi Ed,

I noticed there isn't a Trading Tribe in Arizona. I'd like to start one. Is there material in addition to what is on the site that could help a newcomer become more familiar with the method and learn the process?

CM looks behind the tree and the rabbit has gone down a hole. CM is curious and would like to follow him and see what's down there. Fred isn't sure that's such a great idea. CM is conflicted and asks himself  "Do I take the red pill or the blue pill?"

Thanks for the wonderful site.





Arizona !


See: Tribe Directory


If you don't see a Community close by, you can start one. Send your name, city, email and telephone number to this site.




Clip: http://www.seds.org/~spider/


Mon, 19 Jan 2004

Dilbert on the Markets

Ed, thank you for your wonderful website. Wishing you a happy holiday and joyful new year.




Clips: www.dilbert.com


Mon, 19 Jan 2004

Wants to Find the Fire

Dear Mr. Seykota,

Based on my year-end proclamations, I have been trying to set up plans for myself. Each week I write down the (smaller) goals to be accomplished.

These several weeks however, I have this shocking realization: I am actually NOT doing what I write down that I will do, at least not completely!!! I am breaking the promises that I have to myself!!! I am NOT yet committed!!!

I guess in the past, I would find many very valid and reasonable excuses to explain why I am not doing it. However, thanks to you sir, I now believe that it is a drama within my sub-conscious.


Blame all I can, but unless I face the issue, I will always have this recurring drama of setting a goal and not accomplishing it (or at best do it half-heartedly), and then feeling disappointed and frustrated about my lack of commitment.

Yes, I want to find the fire! I want to feel motivated. I even envision myself extremely concentrated on my work before the computer, so deeply into the process that I am not concerned about anything whatsoever around me. I enjoy that feeling - the feeling of hard work, the feeling of accomplishment. I am willing to pay the price. Dear Sir, can you please help me find it?

Many thanks.

Your Tribe can be a terrific support group, to help you dissolve your feelings of frustration and commit to right livelihood.







unites the fire

with the other elements

when she allows herself to feel




Clips: http://leek.geocaching.com.au/


Mon, 19 Jan 2004

Hi Ed ...

Hi Ed,


I am reading your interview in Market Wizards and much of what you say cracks me up (very well put!) I really enjoy what you teach.

I am a small cap beginner trader in Forex - started about 3 months ago - I entered into a currency trading competition and earned over 45,000% profit in two weeks.

I am in the process of [creating] and would like to know if there is anything you wrote that you would like [to recommend].

Hmmm ... You might consider reading through the FAQ site.


I am currently enjoying books on C++, trading systems, fluid dynamics and the banjo.


You might consider following your own interests into the library.



Not for Everyone


clip: www.amazon.com

Mon, 19 Jan 2004

Indiana Tribe

Hi Ed,

I would like to start a tribe in South-Central Indiana.





South Central Indiana !


See: Tribe Directory


If you don't see a Community close by, you can start one. Send your name, city, email and telephone number to this site.



Clip: http://www.nd.edu/~mlieberm/indiana.gif

Mon, 19 Jan 2004


Track Record Confusion

Dear Ed -

Your track record is the subject of much confusion. Is it really xx% annualized for the last yy years?

I want to model my trading style on yours. I was wondering if you could tell me:

1) the average % gain of a winning trade and holding period.

2) the average % loss of a losing trade and holding period

3) what your batting average is for winning trades

I don't believe these questions violate the FAQ ground rules as I am only asking about about your results and not "instrument specific trading advice" or "specific trading systems parameters."

You might try re-writing your first sentence in SVO-p, as it does not reveal the subject, who owns the confusion.


I have little confusion about it, and don't publish it (except to clients).


I'm not sure that your 3-part question identifies the most important properties of a trading system.  For example, what do you propose to measure to determine your own stick-to-it-iv-ness.


I feel that trying to walk in someone else's shoes gives you blisters.



Finding a Good Fit


can help you

stay on track.


Clip: http://www.lagondola.it/jpg/


Mon, 19 Jan 2004


Getting Started

Dear Ed,

Thank you for all your help over the last year. Reading the site and TTP have added a new dimension to my understanding of trading and myself.

The annual returns on back testing my system are good.

247% for Fed fund Rate
74% aus dollar
30% swiss franc
28% british pound
168% canadian dollar
268% brazilian real
100% euro
46% russian ruble

245% Fed Fund Rate
931% T Bills

I am trading a relatively small account of £100k, but wanting to attract more funding. How did you start off trading? Was it with private investor funds or institutional money?

yours sincerely

Your theoretical results indicate a bug in your program. 


You don't mention the magnitude of your drawdowns. You don't post  evidence you can follow such a system.


When you demonstrate consistently good performance with actual trading, money somehow seems to find you. 


If you can really make 931% annually, you might consider keeping it a secret, and just trading your own funds.




Program Bugs


enable phenomenal results


Clip: http://members.tripod.com/


Mon, 19 Jan 2004


























Mon, 19 Jan 2004


Happy Judges

Hi Ed,

Our tribe discusses the happy judge regularly. I have a question for you and I try to deliver it through this thought

I find that I experience my feelings more clearly without judgment, moreover, AHA's seem to appear with little to no resistance. I like the experience.

Ed wrote:
The judge is just another feeling, so if you experience the judge, he disappears, and then you can go back and experience your original feeling more easily, without judgment.

You have helped me understand this statement and I thank you for your guidance.

Ed wrote:
"If you keep working your way up the stack of judges, eventually you find a judge who really likes being a judge, one who has no judges judging him. This is your happy judge. He sits at the top of the whole stack. You typically have very little trouble experiencing the happy judge."

So if you have a judge who has no judges judging him, the final judge has no one judging him but is he judging others? and if he is judging others (good or bad, right or wrong, etc ...) won't that block the flow of communication between Fred and CM?

Here is what you have helped me see (feel):
When I have a feeling of judging (on or off the hot seat), I recognize it, experience the feeling, then somewhere in there, my happy judge appears, he does not judge, he accepts people, ideas, situations, whatever, for what they are, nothing more, nothing less, and the feeling of judging vanishes, along with the happy judge.

So I have feelings of judges occasionally, not as many as before TTP, and since you've given me the tools, I recognize the feelings immediately. As new experiences arise, I may experience a very old judge, or maybe a new judge, I don't know. All I know is, when I have a judging feeling, my happy judge just appears, almost from nowhere and sets this new or old judge free. This new process almost happens immediately, and it's very cool for me, again, thank you for your guidance.

I ask for clarity on the subject because our tribe discusses this regularly. One opinion is that the happy judge loves to judge. Another is ... I just had an aha ... my happy judge just showed up ...

No need to respond.

Thanks for everything you give us, and ask of nothing for yourself.



Occasionally, FAQ just seems to write itself.

Mon, 19 Jan 2004

Report from Taipei Tribe

Dear Ed,

I complete the translation of the Risk Management page. Here's the link:


I also setup a simple website structure to contain the new Risk Management page, revised TTP page, a guestbook and a forum. It's strictly non-commercial.



Comments are mostly welcome.

The Taipei Tribe holds its meeting on Jan 14. In the meeting, I do my best to follow the TTP structure, encouraging the other member to fully experience his feelings. The item he bring up is, when facing particular market circumstances such as a likely breakout, the feelings that "I have to buy now". It is, in the extreme, the fear of "what if the market does not fill my orders." He usually ends up with positions that far exceed what he can afford.

I encourage him to fully experience the feelings, to imagine he is sitting right in front of his computer, watching the price moves. I want him to describe his feelings. You are right, we fall into a lot of story telling. I ask him to "tell me more" until he thinks it's enough. I then ask him if he can describe the feelings in terms of location, texture, color, smell, temperature. He says it's like his stomach is twisting. I continue to encourage him focus on the feelings. He tells me that he feels tense on the back as well as on the upper arms. He tells me that he feels pressure around his throat that he can hardly breathe.

After that, I encourage him to twist his stomach even harder, to increase the strength on his back, upper arms, and his throat. He closes his eyes. At this moment, I feel that I can somehow feel the feelings that he is feeling. I want him to stick with the feelings, follow them to wherever they might take us.

It takes us about an hour to do all this. When these feelings disappear, I ask him how he feel about similar market circumstances. He says "It is just another short term rally."

Unfortunately, due to the location and time constraints, we are not able to switch roles this time. We schedule it on the next meeting.

Although we do not proceed very smoothly at the beginning, I am pretty happy with the progress so far. I am also looking forward to our next meeting.

Thank you, Ed.

Sounds about right. One knack of the process, that seems to come with practice, is to see resistance as part of the process.


Say, the sender says "I don't want to do this."


A receiver might buy into the drama with the enabling, "OK, then let's try something else."


Or he might hold the line and try, "Great! So locate the feeling of not wanting to do things and experience it."


If the sender then says, "It's in my stomach, and I don't want to feel it," you can continue with, "Great, so where is the feeling of not wanting to feel what's in your stomach."



Story Telling has a Place


India has a strong tradition of story telling. Eager children surround the grand mothers or the village elders, to hear stories of ancient wisdom, without any text or pictures.


Westerners use TV, text and pictures, to convey stories about currently cultural fashions.


Clip: http://www.youhelpindia.org/






Sun, 18 Jan 2004



(Inter Tribe Communication)

... 10 days ago I attended my first London tribe meeting ... Last week I had my best trading P + L result since starting my new job ... coincidence I'm sure hahaha.

Hope you are well.

Hmmm ...

Sun, 18 Jan 2004


London Trading Tribe Meeting

Hi Ed !

It was a cold rainy English evening that the five us braved the London weather to meet in a north London church. Both [Name] and myself are from the Reno workshop and are new members here. We are graciously received by the other members. Without drumming, we make a start as we begin to accommodate each other. (This is where a suggestion of drumming or doing some other entrainment process is useful.)

I gently offer some leadership which is accepted. I suggest beginning with a check in. [Name] ... shares that they don't know what this means. I go first and offer a check in. I talk about what is currently going on - a contract cancelled and several others uncertain - and my feelings about this. We go around and each of us checks in, mostly summarizing what has happened since the last meeting coming up to the present moment. As we go around the descriptions become more and more about present physical feelings.

[Name] suggests that a good way to get into TTP is for us to do the first exercise from the Reno Training - that of sending and receiving a feeling in a small group. The group readily agrees and [Name] quickly describes how one person sends their feeling - expressing it and describing it - and the others in turn acknowledge receiving it by saying "pass" or acknowledge not receiving it by saying "no pass." When asked what to do with a "no pass," [Name] and I, from our experience at the Reno training, suggest that the Sender can describe the feeling in more physical detail and that the Receiver can mirror the physical postures and gestures of the Sender to more easily receive. We do several rounds of this and it is evident that for a few of us turning our attention to sensing another's feelings is a new kind of awareness.

When we get to [Name], he describes how he is tense - in his chest, in his arms - which he shows us by clenching and unclenching his fists - and in his thighs. On completing the exercise, our Chief asks who wants to work, [Name] volunteers to follow up on the feelings he is having. (Another tribe member volunteers to receive. They are under the impression that there is only one receiver for one sender. I report that in my experience in the Tahoe Tribe, all of us can can be Receivers for the one Sender. That this is an advantage of having several members of a tribe present. They agree to this.)

I suggest that we take each of [Name's] feelings as separate ...  As [Name] starts with the feeling in his chest, we start there. [Name] is encouraged to express his feelings in his chest. He does with my verbal encouragement, and without words of his own, though he is clearly experiencing something intensely. After a few minutes, [Name] reports that the chest feeling is gone, and now he is tight in his arms and hands which he shows us by clenching his fists. He is encouraged to clench this hands tighter and tighter and feel those feelings fully. His feelings of tension progressively leave his arms and hands, and his thighs. He describes himself at peace. He feels this peacefulness will be a great resource to his trading. He is encouraged to imagine this peacefulness the next time he is trading.

[Name] volunteers to go next. He starts by telling us about how he gets into trades when he knows he shouldn't. He even gets to where he can get out even, but still stays in. We ask him to concentrate on the feeling. It is one of pain in his back. He is encouraged to experience this more intensely. He locates in his body more specifically and then with a sense of surprise says a very early memory with his father has come to mind - a memory of being punished. I offer that this is often happens in TTP and to continue to feel the feelings; that this is an un-experienced moment that is motivating the drama in his trading. Now that he knows what it, he can experience it fully. He doesn't know if it is real and that it is vivid. I suggest that as Fred has offered him this picture of that feeling moment, he go with it. He does so, and with slight twinges of his body shows us the feeling being released. After a time, we stop and he rests a moment. Then I ask what he thinks of getting into one of those "trades he shouldn't" now. With a very different demeanor, he says he wouldn't do it.

Meanwhile, [Name] is sitting, leaning back, very quite during all of this. [Name] looks expectantly at [Name]. I offer that no one has to work. That participation is voluntary. [Name] responds that he wants to be encouraged. (Here is another advantage of a tribe.)

[Name] says that he trades options and so he knows his risk well, and yet he feels compelled to look at the price during the day. He says he will wait as long as he can, then make some excuse to use the computer and check how his option(s) is doing. If his profit is up, he feels better, and if it is down, he knows that his risk is limited. I am more curious about the compelling need to look at the prices and ask about the emotion just before this looking up process. He tells us that is it an anxiousness - a kind of thrilling "current" that goes throughout his body. That he gets this whether the prices prove up or down. I am initially surprised to hear this. From my other tribe meetings and reading the FAQ's, I am used to hearing about negative feelings. When another tribe member asks about how this might be a problem, I point out that [Name] doesn't experience himself "at choice," He feels he has to check the price. He concurs. I add that this is how he gets to feel that feeling. I then repeat your dictum that the drama, in this case, looking up the option price, is a way to get the feeling. (There are quizzical looks on this, so I point out that this is opposite of how it is usually understood in psychology. That is, rather than the feeling leading to the desire to look up the price. It is the drama of looking/not looking at the price that brings up the feeling. Again, there are quizzical looks as they think through this point. This is one of your ideas that I think requires some acquaintance and a number of examples to full appreciate.)

I ask [Name] if he can bring up this feeling on his own, either by imagining he's about to look up a price or by some other means. He says he can. There is little external evidence of this. He is very contained. I suggest he feel this feeling deliberately because if he feels it fully now, he won't have to use looking up prices to bring it on. He agrees and is guided to repeat the feeling again and again in overlapping waves until he's experiencing it fully and completely. (This is the form of a Brief Therapy 'Symptom Prescription'.)

He does this for several minutes with little external change - except around his eyes. Asked if he feels the need to look up prices, he says no. He is reminded that he can experience this feeling any time he wants. He concurs.

Our chief looks at the time, an hour and half have passed. He looks at [Name] and says let's take the time.

[Name] describes a pain in his left shoulder - a kind of golf ball size knot in his shoulder blade. There's one pass and other tribe members don't get it. The pass describes how he put himself into [Name's] posture. [Name] begins massaging the area and talking in greater detail about it. We find ourselves beginning to use the opening exercise of sending and receiving a feeling. [Name] describes his feeling further and is encouraged to experience fully. One by one, the other members of the tribe 'pass' [Name's] feeling and it dissipates.

As we are passed the time scheduled for the room, a quick check out is conducted and with fond farewells, we return to the wet
London night - changed.

Very nice narrative - good reporting of the workings of a Tribe meeting.

Sat, 17 Jan 2004


Proposal for Money Management

Dear Ed,

Thank you for your detailed and thoughtful reply. Before I refer to the points raised by you I would like to mention the following -

The majority of stocks ( approx 98.5 % ) traded in India suffer from a particularly hazardous feature - of price limits which don't change for the day; often resulting in several consecutive days being limit down / up ... As you can see, this severely limits the universe of instruments that I can trade at this point.

As a money manager I have always stressed on the above aspect, before entering into any consulting or fund management relationship with my clients; and consequently they are equally eager to find a solution.

I shall be showing your comments to the prospective client group, and working on the modalities before I come back to you with this proposal.

I might add that having been guided by your thoughts, most of the methodology / risks you have mentioned, have already been well explained to my client group over the years, and this is the reason that I could get immediate commitments from them to invest with you, now totaling USD 500,000 - even before details of the overseas remittance scheme are known.

Thanks again for everything -



Sat, 17 Jan 2004


Family Tribe

Ed Says:
Perhaps, you might like to describe your Tribe experience, including a specific feeling you initially don't like, and how your receivers help you experience it and discover its positive intention.

As a matter of fact, we're crawling toward the Process. I have been trying to send to somebody who has been successfully enrolling me in her 'protect you' drama over the past 21 years.


She says she wants to protect me and I know that, but the feeling/impression I get is that she is always trying to prove to me, in very subtle and indirect ways, that I am 100% wrong and bound to failure in whatever way I am, do or think.


This scares and demoralizes me. So, I am receiving her for the most part, and when I send I do it for the sake of sharing my feelings as I still have to Do It by Myself (track the feeling, re-frame it and still watch her so that she doesn't succeed enrolling me in her drama).


My mother, on the other hand, has proved to be a good receiver. Nonetheless she is very religious and seems to be quite scared about the whole thing.

When you release having to control others, you set yourself free.





Letting Go


leads to freedom.


Clip: http://www.tribuneindia.com/2001/



Fri, 16 Jan 2004


TTP and AHA's


Ed says:

"Yes, your feelings of worry, and your nervous feelings about going on to the hot seat might be good entry points.

The hot seat process is like trend following. Keep going with the flow, and keep noticing and experiencing your feelings.

Concentrating on the AHA, as a goal, from the start, is like concentrating on physical release, as a goal, during lovemaking.

The real joy is in the process, as you, Fred, CM and your receivers all share an intimate journey. The AHA is a bit anticlimactic, something to enjoy in the afterglow."

Thank you for the reply, for your time and caring, and for sharing this with all of us. I understand better now how to handle my first hot seat.


Fri, 16 Jan 2004


It's About Time

Hi Ed.

What kind of music do you like? Classical, Jazz, Rock, Country? I bet you're an everything guy. That's me. I like everything. I play bass guitar now.

Some good rock music. I love music. Everything about it sets me free. The flow of emotions, the cycles and repetition, the associations we make to our lives.

I am thinking much about time lately. How does it exist? I conclude thus far that it exists all in the present moment. Past and Future included. The past as memories and ideas that shape our thoughts and actions; the future as goals and ideas about what's to come. The past can not exist outside of our minds nor can the future. The present moment is composed of change. I conclude that Change is Constant. (I would like to keep that for myself, you can reuse it if you like)

I can always count on price change. Do you think the markets are always in equilibrium, disequilibrium or a hybrid of the two? I am trained in economics. I do not agree with the random walk theory or the efficient market theory. I think markets are in equilibrium between buyers and sellers at the point of execution. Long-term price change is the result of true fundamental shifts (or disequilibrium) in supply and demand. The best trends are the most liquid. It is not only wild speculation it must be driven by fundamentals. I think (like Soros (well not entirely ...) the market is like a laboratory where we as participants test out hypotheses (trends), some survive and others do not.

I plan on attending your workshop. It is one of three courses I will attend in the next two years. If you do not have another that is fine too. I would like to hire you as consultation for my CTA or myself. I think it is interesting the way you presented the last workshop. It was just like a bull trend. Low price in the beginning without much information then getting more "expensive" as more information is revealed. awesome. True to myself and my system, I delayed entry, then felt anxiety, then skipped it due to a lack of significant risk capital.

Thanks Ed.

I am planning to deliver another Workshop, later this year.


Equilibrium indicates objects at rest, absence of trend.



NASA Equilibrium Project


This woman attempts to regain

her equilibrium

after a sudden push.


NASA does not comment

as to what the woman then does

to the experimenter's equilibrium.


Clip: www.uest.nasa.gov/smore/photos/




Fri, 16 Jan 2004


Canine Hardball

Hi Ed !

Following up January 12 post, your insight that I crave the drama associated with knots, helps me review life experiences where exactly that happened.


I'm feeling one of those recollections strongly this week, and see how it is a direct dramatization of the spanking episode.

This morning someone intimately involved in that one event 30 years ago telephoned me. I felt the lump in my throat, so I apologized for my part in the experience many years ago. At this exact moment, while I was talking, my dog sitting next to me threw up.

Even my dog is doing TTP !

I recall a tribe meeting in which, during a blindfold exercise, one member groans in pain, another belches, and a third sighs in relief as the issue disappears, simultaneously, for all.


All chuckle, acknowledging the AHA and then, still in blindfold, right back to chop wood and carry water.



A Good Receiver


facilitates the process.


Clip: http://www.bigfoto.com/Sites/


Fri, 16 Jan 2004


Time Has Come

Hi Chief !

Just finished meditating and a thought came to my mind ( Ed said; I've seen traders improve their performance 40%+ with TTP )
That means for me 100%+ for now, 2004. Wow, I feel it's possible. I have goose bumps all over my body just thinking about it. I'm enjoying the worm feeling. For first 15 days of 2004 I'm up 7.89%.

From my calendar; There is one thing stronger than all the armies in the world, and that is an idea whose time has come.

Your idea's time has come. You passed it onto me and I'm thinking about it quite a bit. Have a great weekend.

Your friend,

PS The trip back was smooth so I didn't have a need to use your present. Even that gesture made me think about my response to rejection.

Thank You.

Yes. Re your: "Time Has Come."  Placing time, itself, in the non-existing past might be a way to metaform the notion.

Fri, 16 Jan 2004

Kelly Value: Another Interpretation, II

See: Kelly, Jan 13, 2004

Ed: Note that, per your approximation, if R = 2:1, R can just as well be 4:2, or 100:50. So your notion, that R = P/L, allows P & L to be any values with quotient = 2, so P is indefinite. So your K = E/P, then, is indefinite. Your math seems to indicate: heavy betting for small P systems,
infinite betting as P approaches zero.

I disagree with your statement about betting. Expected value is still a function of P. It's also a function of W and L. E = E(W,P,L) = W*P - (1-W) *L. The Kelly value is a function of W and R, but R is a function of P and L. So, the Kelly value is implicitly a function of P and L, too - K = K(W,R (P,L)) = K(W,P,L). I rewrite the Kelly value to use expected value and average profit. I did not change it's variable dependencies: K(W,R(P,L)) = K (W,P,L) = E(W,P,L)/P. P can be indefinite because it affects both the E and P. The ratio of the two determines the Kelly value.

For small P systems, E becomes negative as the "-(1-W)*L" term dominates. In that case, the Kelly value is negative. For large P systems, E is closer to W*P since the "-(1-W)*L" term is less significant, and K approaches W.

K = W - (1-W)/R can be positive or negative depending on the values of W and R, with the condition of "bet only when K is positive". K = E/P = (W*P - (1- W)*L)/P has the same condition. So, I don't bet when K is negative or zero.

This isn't a new theory of lift; it's another mathematical way to express the Kelly value. It makes more intuitive sense to me than the original equation - my own personal discovery. I email it to the FAQ classroom forum as a contribution to others that use the Kelly value in trading. They can discard
it if it does not help.

Ed: your defining wording about R, "R is approximated by" is not in SVO-p. You give no S-ubject, no mention of exactly who is approximating. You might try re-writing your derivation in SVO-p, so as to identify who takes responsibility for inventing the approximation, what credentials he has as a

I approximate R using empirical results from my back-tested and in-production trading systems. I define R as (average profit of the system)/(absolute value of average loss of the system) = P/L. I repeat your note on the Risk Management web page as the basis of my approximation: "Note that the values of W and R are long-term average values, so as time goes by, K might change a

I'm not a mathematician, though sometimes I use math. I'm not a trader, though  sometimes I trade. Most of the time, I think and I feel.

You might consider showing your email to some of your friends and associates, to see if any of them can understand your intention.


You might consider taking whatever feeling is propelling you to do all this math into the process, as a starting point.




Bug Catching


is a useful skill

for mathematicians.


Clip: http://www.xyzzynews.com/



Fri, 16 Jan 2004


Application for IV-TT

My name is [Name]. I live in San Francisco. My phone number is 415-XXX-XXXX. The best time to contact me is during the day Monday through Friday (I work
from home.)

Thank you for your consideration,



Some People Are In This Business Because They Like To Be In This Business, Others Are Here Because They Love To Trade

Dear Mr. Seykota,

Before I go into my understanding of the Trading Tribe Process, Iíll take a second, tell you about myself, and how I got to this point in my life.

I graduated from [Name] College Prep ... in 1988, graduated from [Name], majored in Japanese, traveled throughout Asia (living for two and one half years in Japan and Taipei teaching English).


In a small, island bungalow in Palawan, Philippines I first read the Market Wizardís interview with Ed Seykota. I was speechless. Immediately my life had direction. Within six months I returned to my family in San Francisco and landed a job as an assistant trader at [Firm].


I worked my way up the ladder and developed contacts. Four years later I jumped to [Firm's] trading desk, and was promoted to Vice President OTC Trader. I lived large, loving the fact that five years earlier I was on a remote island in the Philippines reading an interview with Ed Seykota. Then, the stock market bubble burst, [Firm] fired everybody, and I was without a job.

I had one ace in the hole: a seasoned Market Wizard who told me in 2002 that he had been short the NASDAQ for two years. After many a Ram Dass conversation, my Market Wizard executive hired me. Now, we work together ... I chart by hand 35 charts a day, and make my own decisions about all aspects of trading. I have learned more in the past year about myself, trading, and making money than I had previously learned in seven years trading at investment banks.

The TTP is a brotherhood of traders with one goal: to increase understanding of trading and decrease personal drama - to achieve AHA. Specifically, to promote the flow of experience from Fred to CM, and to rejuvenate CMís ability to receive protective warnings from Fred. Iím not proud of my intimate friendship with Fred. The TTP is an emotionally challenging, yet supportive forum dedicated to awakening the trading experience, and to improving life here on earth.

Mr. Seykota, I have spent many a sacred day in Incline, and would honored to attend (regularly) the Incline tribe. I quickly admit that my trading mind capacity at this point of my career is nothing short of a goldfish swimming from one side of the tank to the other. Drama here. Excitement there. Anger. Elation. This idea works. I think Iíll take profits here. Oops, shoulda let my profits run. I coulda made so much more on that trade - I was up so much money just yesterday! Goldfish!

My goal is to become a better trader; I feel I am emotionally ready to accomplish this goal through guidance and participation in the TTP.




∑ 7 1/2 years OTC trading experience
∑ 2 years PROGRAM and DERIVATIVE trading experience
∑ Thorough knowledge of Autex, Bridge, Brass, Bloomberg, Fix and Super indications, various ECNs: ARCA, Bloomberg Tradebook, BRUT, Instinet, ISLD, LAVA, and Posit
∑ Demonstrated record of exceptional reliability and excellent reputation with customers as a knowledgeable and helpful professional


[Firm] 1999-2002

∑ Focused exclusively on market penetration in important banking and research stocks, while working closely with my superiors in order to monitor firm capital
∑ Developed relationships with analysts, bankers and customers to help generate trading volume
∑ Best Execution Committee member 1999-2002
∑ Price blocks of merchandise from 25,000 to 250,000
∑ Promoted to Vice President, January 2001
∑ Series 7, 63, 66, 55
∑ Thorough knowledge of Bridge, Brass, Bloomberg, Autex, Instinet, Lava, various ECNs: ARCA, BRUT, ISLD

[Firm 2] Assistant Trader 1995-1999

∑ Responsible for trading large institutional block orders, as well as hundreds of small retail and non-market maker orders daily
∑ Spoke with research analysts on weekly basis to prepare earnings expectations on Excel spreadsheet
∑ Summarized daily and hourly AUTEX, FIX, and SUPER indications
∑ Traded large program and derivative orders guaranteeing closing price
∑ Completed Technical Analysis of Securities course at Golden Gate University
∑ Assisted in the trading of numerous IPOs with [Name], head trader [Firm].

[School], Osaka, Japan English Teacher 1993 - 1994
[School 2], Taipei, Taiwan English Teacher 1994 - 1995

[College] 1988-1993
[College Prep] 1984-1988

You are welcome.


The next Meeting of the IV-TT is February 5, 2004.

Fri, 16 Jan 2004




Hello Mr. Seykota,

I would like to ask you a few questions:

1. In Market Wizards, you said "Great traders are ones who are absorbed by the talent. They do not have the talent -- the talent has them." What it feels like to be absorbed by trading? In which way trading has you?

2. How and what effect experiences and consequences has if any in the "now"
of trading? Is the end result will be the final answer for "the talent has them or not"?

3. In Reminiscences of a Stock Operator the turning point of Mr. Livingstone is when he learn how to read "The Conditions" of the market.

What is your view on this matter and how important is it in your trading experience?

4. Do you have a trader training class?

5. Do you accept new money to manage and if you do what is the requirements.

Thank you and best regards.

1. Being in the now, with right livelihood, seems to include allowing all  feelings to flow through, so the meta-feeling is everything / nothing.


2. Experiences flow through, without hooking into distracting dramas.  You stay on task.


3. The market conditions are: up; down; sideways.  The appropriate corresponding trading postures are: long; short; out.


4. Yes, you are currently attending one part of it.


5. I don't accept money.  Occasionally I accept a client.  Money may or may not come along with him.



Fri, 16 Jan 2004


Dear Ed Seykota,

I am committed to live a right livelihood and, therefore, I am committed not to allow myself to enroll in other people dramas.

But then, there is this special case...

My mother creates lots of dramas about many little issues and, very often, gets other people into her own dramas (or maybe these other people enroll by themselves in her dramas).

I say my truth and take responsibility for my own situation ... this is the easy part for me. The delicate issue is to allow her to take responsibility for her own situation.

For example, when she calls and speaks out a brand new drama (which may or may not have its origins in a real life problem), I don't know exactly what to do.


One option is to stay quiet and only listen to her without saying anything (but isn't this enabling and enrolling in her drama in a way?).


Another option is to say that I don't want to listen (but isn't it too rude? specially because I do care about her).

Any insights about how to act in similar situations without enrolling in her dramas and without being a "distant" son?

One may question why this has to do with trading, but the answer is simple: when she calls before the market opens (or worse, during the RTH), I just loose my focus and you all know the probable outcome trading wise.

Many thanks for taking your time with this issue!

When you can allow your mother to do and say whatever she wants, and to feel whatever she feels, you are free.


Family manipulators may resort to holding their own feelings hostage, in order to control each other.


As long as you buy into the idea that you have to act a certain way in order to avoid  "hurting her feelings," then she has you under control.


Next time mom tells you that you are a so-and-so and are causing her grief, you can listen carefully, thank her for sharing her feelings and encourage her to fully experience them.


Perhaps she can disappear some of her own feelings and gain a measure of her own freedom.





Give It to Get It


Clip: http://caribbeanartist.com/


Thu, 15 Jan 2004


In the Ocean with No Life Preservers

Dear Ed,

Hardball is quite an eye opening experience. I feel lighter. It is hard to believe there were so many things, that I said, that are standing in between me and this goal.


More were there but we ended the hardball session a little before they all got to see the light of day.


I brought up a situation I had as a child, on a boat in the ocean, as one of the reasons blocking me from my goal. The boat I was on sank while we were out in the ocean with the life preservers stowed safely under the seats inside the cabin, this is a real eye opener.


Now I see why I have this fear of losing control even with stops in place. I had a blow out trade in the S&P's. The S&P's hit an air pocket and took WAY more of my capital than my risk tolerance based on my "stops" had me prepared for.


The S&P trade brought out a lot of the emotions I was feeling in the water the day the boat I was on sank and "my Fred" linked many of those helpless emotions to trading somehow.


What a treat it is to bring all of these feelings that are standing between me and my "goal" out in to the light of day.

Best regards,






Stops and Life Preservers


work best

when they are on the floor.



Clip: http://www.toymuseum.com/



16 Jan 2004

Friday, January 16, 2004


Stick With It

Hi Ed,

I remember well, the words you said to me just before I left your home in December, [Stick with it - Don't quit it.]


I just wanted to let you know that I have ... / will not ... and that my method development is now going well, thanks to your help.

Once my simulation tests are finished across all markets, I may want to bring the various test results over to discuss them, if you agree.

Best wishes,