from Ed in Red)
Sat, 12 Jul 2003
From your FAQ writing, I gather one's system design needs to find a balance
between heat and whipsaws, depending on which eats up less stomach lining in
the trader's particular psychosomata.
Whipsaws at least
give one something to do, while a big heat wave leaves one waiting, hoping,
fanning, re-running back tests until it ends.
The test for a system, I suppose, is to see which generates a better Lake
Ratio, enduring heat, or going in and out of a market. If they are about
equal, then pick the one which is easier on the nerves.
In your experience, is this a workable approach?
works perfectly well to produce the result it produces. On some level,
everyone gets the results he wants.
and Whipsaws do not exactly "balance." Heat is, more
precisely, proportional to whipsaws, not balanced against it.
small heat (timid trading) your trading has little impact.
moderate heat, trading has moderate impact.
high heat (bold trading) your trading may succumb to wild volatility.
balance you seek may be between timidity and boldness; between heat and
may help you discover the items you wish to balance and the proper set
points for you.
a good balance
you want to balance,
using good measurement tools.
Sat, 12 Jul 2003
Stages of TTP
Now with about 20 cumulative hours of the TTP, and several months to digest
along the way, here is my concept of the stages one goes through. Is this
close, or how would you improve this with the benefit of your years of
experience? Or is it more helpful if each stage is a surprise as it unfolds?
Enumerating stages, one could enact the avoidance behavior of just thinking
about them rather than actually going through them, just as one thinks about
taking a trade instead of actually placing the order, as life and the market
stages of awareness in the TTP:
1. fear of attending, unfamiliarity with the process. avoidance.
2. attending TT, fear of hot seat, unfamiliar, quiet, observing, listening.
3. trust, I bring my problem to the hot seat, feeling of swirling into
unknown states of consciousness.
4. Survival. euphoria. release. Aha. glimpse possibilities of the Process.
5. receiving, clumsily working, not knowing exactly what to do.
6. more receiving, more hot seats, learning, understanding.
7. realization these are not "my problems" or "their
problems", they are "the problem" of the moment experienced
and resolved more or less by everyone in the tribe simultaneously.
8. major emotional repressions resolved. Fred relieved. mind clear.
9. hot seat to work in mental world, setting, achieving life goals.
10. expertise receiving. perceptive, cognitive state of mind.
11. hot seat to work issues aligning emotion, mind, soul, life purpose,
12. helping others through TTP in the present moment.
may have a tendency to conceptualize and theorize rather than to
can check this out by comparing your feelings of:
being there with your feelings
up good theories about your feelings.
not the same
Fri, 11 Jul 2003
In the interest of all of us thus far involved it has become apparent that
instead of a Northwest Tribe that every major area has its own tribe,
Seattle, Olympia, Bend, Portland, etc. With that said, please change my
contact information so that it reads Portland Area Tribe and delete my last
The Portland Area Tribe in this last week has grown 100% (we now have 2
people). We are to have our first meeting on Thursday, July 17th at 7pm in
Fri, 11 Jul 2003
The feeling of blockage has do with the feeling of guilt about fairness Ed
often talks about. Strangely enough, it is as if I feel guilty about
being happy and as if I don't deserve to be emotionally happy.
At this point I also acknowledge that the blockage is a label. I re-frame it
as neither positive or negative, so as to be OK about feeling blocked; so as
to feel blocked joyously. Trying to define what this blockage is increases
the drama and tension. I go the path of least resistance instead.
Working with a good receiver can facilitate the
process - particularly with drama-motor feelings you judge to be bad or even
TTP seems to help resolve various issues associating
with feelings Fred wants to communicate to CM.
TTP can help you reframe monsters into resources.
Fred's unexpressed feelings tend to nest in tangles and knots:
The Trading Tribe encourages fully experiencing the
entire system of feelings; this might involve returning to feelings
recursively, like pulling apart the strands of a knot.
The Essence of the Knot is knot feeling your feelings.
Then, when asserting myself, my feelings and needs is warranted,
something invisible seems to block me and prevent me from doing it. That's
it. I feel blocked.
I'm asserting my needs ... and I don't feel any blockage. I feel something
else. Describe your feeling of blockage. Blocked where? How?
you experience one set of feelings, it may disappear and another set may
might pass through a half dozen interlocking feelings before you get to a
key experience that spills the knot.
way to loosen knots
to appreciate their positive intention.
Fri, 11 Jul 2003
Dear Mr. Seykota,
I have enjoyed your web sight a great deal since i discovered it several
months ago, thank you for sharing your wisdom. I thought that some of the
feelings I have about trading and myself might be relevant for the FAQ
When I was 23 i had an emotional wipeout. My mother slowly died of cancer,
and a longtime girlfriend who i thought I would marry dumped me.
I feel ashamed
to say it but It I cried every day for months, often at night when I tried
to sleep, other times in the morning when i woke up.
I felt devastated
by two losses at once, very lonely and isolated from other people.
Theoretically, I would like to think that I am and should be independent.
However Feeling like no one cared about me really hurt. Fortunately, I
maintained my health. I now feel somewhat ashamed of what happened to
me and how my life fell apart.
In the last 3 years (I'm 26 now) It feels like I have made a great deal of
improvement. Overall I am happy and enjoying life. Instead of fighting my
moods, or beating myself up over them, I try to experience them as a passing
How does this tie into trading? I have followed the markets every day
for the past 6 years, and traded for about half of them. I love the constant
change and the sense of opportunity. I have always been good at winning
contests and games, and I think this has something to do with my attraction
to the market.
I ended my " emotional wipe out" year down 9% on my account. That
does not sound too bad, but for some reason the feeling of loss I had at
that time magnified the way it felt to me. I managed the losses by trading
very small, so to lose this relatively small percent of money I experienced
many small losses.
Since that year I have continued to follow the markets and research ideas
(which I enjoy a great deal) but have not traded with any consistency. I
can't even decide on a style or approach that seems to fit me. I seem to
jump from idea to idea, not knowing what approach suits me best or would be
most effective given my account size. (I stopped trading when I realized
my erratic approach would not create positive results.)
I have been too
afraid of loss. I have become somewhat fearful in other areas of my life as
well. I have had a hard time making new friends and meeting new girls.
I am afraid of
the feelings I felt three years ago. I fear getting rejected after someone
gets to know me. Sometimes I can't even believe how I fell apart, and I am
afraid that other people will find out and think I am a loser.
This concerns me, because I feel that to achieve anything worthwhile in life
i will have to be willing to put myself out there and take smart risks. I
always admire people who are willing to step out and embrace life, and
that's how I want to be. I don't want to be an undisciplined dabbler, which
is how I have felt.
Just writing the above actually making me somewhat emotional, I am not
Thanks for any insights, and congratulations on your web page and the
success of TT!
might see if you can identify some of your feelings of shame, fear, loss,
rejection and isolation.
feelings are typically unpleasant. Tribe members help cheer you along
forget the importance
a great cheering squad.
Thu, 10 Jul 2003
I want to do the Trading Tribe Process and would like to start a tribe in my
area. Could you recommend ways to find members?
I have talked to
some people in my trading room, but was surprised by their responses. They
seemed scared of the idea.
your trading room buddies are all afraid, you might invite them to gather to
share their experiences about such fears.
Positive Intention of Fear
Thu, 10 Jul 2003
I hope you are well, apologies for absence due to active trading and also
trying to solve some dilemmas with my stock position sizing algorithms. I
not completely satisfied with my method, at present I am using volatility to
decide on how many percent of my trading capital to stake on each trade.
This is ok, but when I take a good long look at the actual volatility
indicators used to perform this function I see that they are not as good as
they could be, and also that none of the indicators I have seen really
reflect a true measure of volatility from a risk point of view.
I am in the process of constructing a volatility indicator that takes into
account multiple time frames so as to get a more accurate reflection. Also I
am hoping to incorporate somewhere into the position sizing model, some
aspect of the "Kelly formula" which I like (up to a point) as it
is indicating to me that I should risk a huge part of my capital on each
trade. (which I disagree with ) Aside from that it makes sense to me to
increase size as your performance improves and vice versa, as long as there
is a cut off point of percent of trading capital risked.
The third component I intend to incorporate is the strength and direction of
the trend in differing time frames, e.g if the long term, medium term and
short term trends are all up then this would carry the maximum rating to
apply to the formula with long trades, but if one of the above was not up,
then a smaller trade would be implemented. Also another aspect to consider
is the strength of trend ( in all timeframes) of the index that the
particular stock is a constituent of. So you can see, I have lots to think
I will get there, eventually ... I hope.
I am erring towards starting up my own trading tribe, rather than joining
an existing one. As I said to you before, I have some questions.
1. You have stated that FAQ does not provide instrument advice or trading
system parameters. If I were to start a tribe, would it be permissible
for members to help each with such things as converting their ideas into
computer code, and deciding on position sizing algorithms?
From my point of
view, I don't feel I am lacking in any major psychological areas of
trading, as I have evolved quite well from a very shaky start. (But I am
happy to listen to other peoples problems, and try to help them solve them) My
main need at this time is finding people who are expert at computer
programming, as I am not as good at this as I would like to be, and could
use some help. Is this sort of thing a suitable for a tribe that is under
the TT umbrella? Would you still be happy for me to form a tribe that
was involved in developing trading strategies, risk control, position sizing
ideas, as well as TTP?
2. Also I would like your advice on how to evaluate whether or not
applicants are suitable. I ask this because I wouldn't like to decline
anyone's acceptance to the group after meeting them, but would prefer to
have them read a set of criteria and if they have the right qualities then
it will be less likely that they are denied joining.
3. Approximately how often would a tribe be expected to conduct meetings?
That's all I can think of at the moment.
I am glad you found some use in my radial momentum postings regarding two
stroke engines, but I am afraid I don't know where to locate drawings of the
apparatus (with pressure profiles). I will contact the person I told you
about and refer him to your radial momentum site.
I was reading the below posting from the Sat 24th may and I noticed
"tends" which perhaps should have said "trends" You
know my grammar is not very good, so I am aware I could be mistaken.
you for reporting the typo; it now stands correctly.
letter is consistent with a tendency for much planning and little executing.
reminds me of the sergeant who tells his men, "OK men, ready, aim, aim,
aim, aim aim ..."
might consider continuing to wonder about thinking about ways to plan maybe
becoming somehow aware of a tribe.
may help you avoid experiencing feelings about making commitments.
the point of release
Wed, 9 Jul 2003
What is meant by right livelihood?
student approaches a man lost in his work, at one with his job.
student asks, "Say, maybe you can tell me something about right
livelihood, and how to find it, and maybe a little about the purpose of
work, while you're at it."
man thinks for a moment and says, "Now those are really interesting
questions. I don't really know if I have an answer for you. I'm
kind of busy with my work, you know."
Wed, 9 Jul 2003
Wants to Assist
Good Afternoon Ed,
Thanks for another great meeting on Thursday – very insightful as usual…
Also, I just wanted to let you know that I’d like to lend a hand in any
seminar activity – should you need help. I realize I’m a few hundred
miles away, but I could nonetheless help with event day preparation,
organization, marketing materials etc.
Please let me know.
am planning a TTP workshop at Lake Tahoe for October 24, 25 and 26.
Watch FAQ for details.
Tue, 8 Jul 2003
Two years ago I liquidated my 401k, deciding to use the $$ to learn to
trade. A few months ago,
having spent $24K and 24 months in pursuit of the Holy Grail of trading -
buying software, attending seminars, studying technical indicators, chart
patterns, etc.- and feeling totally frustrated and none the wiser (and none
the richer) with regard to trading, I happened upon www.turletrader.com
while, ironically enough, searching on Google for some combination of
"predicting" and "commodity trading"!
I was impressed with the site's No BS approach. I purchased Market Wizards
at their suggestion and upon reading the interview with you in Market
Wizards, felt "arrested" – stopped in my tracks - like an
aircraft landing on an aircraft carrier, snagged and brought to a stop by
the carrier’s arresting cable.
I kept going back to your interview, especially your statement
"everyone gets what they want from the markets". I felt compelled
to reread your interview while, at the same time, CM repeatedly admonished
me for my puzzling, compulsive, irrational behavior.
Then I found your site and commenced reading the FAQs at your site, then
joined a Tribe (haven’t been to a meeting yet).
All the while CM keeps wanting me to resume my former pursuit of the Holy
Grail - behavior that even CM acknowledges is frustrating, unprofitable and,
in all probability, fruitless. And, of course, CM thinks that participating
with a Tribe is a silly waste of time.
Simply reading the FAQs led me this evening to my first Aha! FRED is at
work here! I've also noticed during this time that I'm more aware of
emotions, enjoying life more than I have recently, and more spontaneous.
CM is anxious and thinks of that scary time on the roller coaster ride at
the amusement park when the cars first start to move forward, pick up
momentum, then suddenly turn and plunge down into that dark tunnel. Everyone
CM hesitates, but FRED seems to want to go on this ride!
CM is cool towards you Ed, but FRED wants to say Thanks!
like the difference between
about it is different from
Tue, 8 Jul 2003
This morning I was Instant Messaging with a young man I know in Malaysia
who is about to get married. He was asking my advice on various issues
he is having with his prospective in-laws. As the IM conversation
intensified, it seemed natural to go into the Process with his feelings. It
was 3 am in Malaysia, so his CM was less dominant, perhaps.
After going through two different layers, then afterwards asking how he felt
about those same issues, he said he felt much better about them. It felt
to me like the Process happened. I will wait a few weeks and see if his
behaviour improves, as a sign of some real work done.
Strange coincidence occurred just an hour afterwards though, as life
sometimes sends in confirmation. A biologist in Chico called about a
report, and out of the blue, apropos of nothing, he said, "when
I was in Malaysia many years ago, a man asked me to marry his
daughter." The biologist has never mentioned Malaysia before, and our
business together has absolutely nothing to do with marriage or Malaysia.
Interesting? Perhaps under certain circumstances, the Process might work
The day after this, the in-law this man was having trouble with wrote him
a long email apologizing, reconciling, and promising not to create new
problems, all this after not communicating for 6 months. Magic !
Fred operates in strange and amazing ways.
Actors on Demand
Trading Tribe Process, above
Tue, 8 Jul 2003
Getting to the Roots
The first time on the hot seat, my first issue completely evaporated and
was gone. I haven't repeated that equity-reducing behaviour since, not even
After the second time on the hot seat, three weeks later i find my behaviour
on that issue is still the same. An indication that the clearing was not
complete, or is more deep rooted, or something.
one feeling covers up another. Sometimes feelings cross cover each
people connect on the Under Fred network and develop interlocking,
purpose of drama is to raise an experience to CM's awareness.
helps CM to recognize key experiences, so Fred does not have to engineer
dramas about them.
CM doesn't listen
sometimes enrolls Under Fred
setting up big dramas.
Tue, 8 Jul 2003
Do you know the identity of the anonymous trader interviewed in New Market
Wizards under the title "Zen and the Art of Trading."
does not reveal identities of contributors ... see ground rules.
is that masked banker ...
son, is the Loan Arranger.
Tue, 8 Jul 2003
I like the adage: "When you trade your monitor will do a funny thing;
it will become a mirror." The inner and outer worlds seem to be
I do feel being close together might facilitate the Process.
don't have other choices, for the time being. Managing words, indeed, is
CM's primary function and we end up, in a sense, having the fox to take care
of the sheep. Nevertheless, SVO-p language may help us to filter out
unwanted story telling. That's the way we are doing it (or That's the way we
About having non-traders I feel it is possible. Nevertheless people in
general might find this very touchy-feely.
On the other hand
a trader who has experienced one or two margin calls, or a losing streak,
has a better sense of what a touchy-feely issue is like. :-) Anyway, good
luck with your efforts!
might have a look at your feelings about touching and feeling
for some and
Tue, 8 Jul 2003
The process works best in a group setting as I find looking at words alone
through email or chat limits the ability to send and reflect feelings. That
being said, you can certainly give it a try as it might work for you.
As our meetings have evolved, we speak less and less about trading even
in our pre-meeting chatter.
In fact, we have
set up a separate meeting at the end of the month to talk about trading
issues as we would prefer to focus on the TTP during our regular meetings.
The issues we
are working on in the Tribe setting are helping to make us better people
which in turn make us better traders.
This leads me to
believe that you would not need to have participants who are traders to be
part of the group. A common interest would help build camaraderie and bring
people together, so perhaps you look to establish a small group of parents
to work on the process together? It would be interesting to observe how
closely working on “parenting” issues would look to working on “trading”
That’s my idea; let us know how you progress.
Mon, 7 Jul 2003
I have been studying C++. I am comfortable with C++ programming. I am not
interested in reinventing the trend-following wheel. I understand that you
are a very intelligent man and I am interested in paying for your expert
What is the asking price for private tutoring with Ed Seykota? I would like
to cover system development, trading psychology, accounting and fund
management (taxes, client issues, etc.).
I would like to
leave with a robust trend-following system earning 80% pa with under 20%
historical drawdown. At most I would like to expand my personal hedge fund
into a low-taxed investment vehicle for a few wealthy clients.
I feel I am having difficulty locating my "right livelihood." I am
not happy with my current employment. Do you have any suggestions for
discovering or locating what is my "right livelihood"?
trading system with an 80% long term return per annum and a 20% historical
drawdown (System Frequency = 4/year) seems a bit out of scope for passive
black-box system designers.
own psychology is likely to contribute more to your success than your
might like to attend the upcoming TTP workshop, October 24, 25, and 26 at
Mon, 7 Jul 2003
Rule of thumb:
10% or less
Stock 1 140
Stock 2 40
Rule of thumb: speculate with 10% or less of your net worth, and stop
trading if you lose 1/2 of that, or 5% of your net worth.
In your case, your trading account would be about about 60k, with a risk of
If your account grows, it might become your main asset. If not, you can
likely handle a 5% drawdown in net worth.
Dear Mr. Seykota,
Don't you deceive yourself here? In fact stocks 1, 2 is already trading
position (30% of assets). So what is the point to distinguish
"core" assets and speculation, as if "core" is safe,
while speculation requires
speculation, one rule of thumb is to risk about 5% of your capital.
order to risk 5% of your capital, you might have to invest 50% of your
capital and risk 10% of that investment.
30% of assets in stocks might not all be at risk, assuming trend following
and risk control.
might examine your feelings about deception, treachery and infidelity.
of self and others
Mon, 7 Jul 2003
San Jose Experiences you detailed are very similar to what we have
experienced here in Manhattan. The third meeting seems to be the magical
number when things seem to come together and the Process flows with ease.
This is when we experienced our first Aha.
I am intrigued by your use of the phrase 'Tribe has taken a life of its
own' and 'I don't know how to explain it, it just happens'. Same here
with us, we did struggle during the first few meetings, but by the third
meeting everyone seems to know what to do and things run on auto pilot.
Maybe it is Fred who is running things -:)
When I sent out that email couple of weeks ago about starting a Intentional
Communities Newsletter, this is exactly the type of information I was
looking for which you detailed in your email. Thanks for sharing your
experience with us.
I believe there is some merit in all of us sharing our unique styles that we
have developed. For example, the Toronto tribe came up with the great
idea of a 'talking stick', so that the person on the hot seat is not
unnecessarily interrupted. You in the San Jose group are using the
chalkboard to isolate and clarify the issues. In our Manhattan tribe,
before doing the Process we use a guided breathing / hypnosis routine that I
find very useful to unwind from the day, in a light trance I give a
suggestion to quieten our CM and that we are all One.
Then we directly
launch into the process. Hopefully Ed will shed some light on these
practices during his certification later this year.
I am pleased that we the various tribe leads are developing friendship and
camaraderie. Hope to meet everyone one day.
Good luck with your tribe and as Ed says kick butt in the market !
talking stick can help organize conversations.
much conversation and talking can inhibit TTP.
practice, receivers can learn to offer subtle sub-verbal encouragement in
response to somatic cues from the sender.
a trance state at the start of the meeting can facilitate the work.
good as an early training device.
so hot as a crutch
Mon, 7 Jul 2003
San Jose Tribe
Everything is going great here at the Tribal meetings. We have a very
diverse mix of people, and the Tribe has really taken a life of it's own.
There are several things that we have come across that were really important
to growth of our tribe.
In the very beginning, we had a really hard time sticking to the
feelings, rather than analyzing the feelings of the person in the Hot Seat. It
definitely was tough following TTP to the book, and it was about the third
meeting where we were approaching the Process with ease. Now, all of us can
feel the Aha slowly coming during TTP, and it seems to guide the group on
its own. I don't know how to explain it very well - it just happens.
Another thing is that we meet every week. While that's not a necessity, all
of us seem pretty excited about it and look forward to meeting every time. There
is also that sense of camaraderie, fellowship, closeness, oneness that comes
with meeting frequently. It works for us, and we are fortunate that all
of us are making the commitment.
What has been the biggest help was our use of the chalkboard and paper to
take notes. We spend a good amount of time isolating and phrasing the
issue properly before we dive in to the Process, because it gets the
individual on the Hot Seat to focus on the precise issue. The great part
about this is that because we are writing things down to clarify the primary
issue, a lot of other issues crop up that the individual can use for another
time on the Hot Seat. We just had one person go on the Seat, and the
original single issue culminated into three or four different issues on the
chalkboard. He was really excited, because he saw how a cobweb of issues
can form from just one central issue. That was a great day for all of us!
We have received a lot of applications, and we do turn away a lot of
people. The biggest reasons are a lack of commitment, not doing what needs
to be done, or the applicants have selfish reasons for wanting to join.
amazing is that it's the people that weed themselves out of the application
process, not us. The Tribe is not about I - it's about us. There is no
greater joy in the world than to have a group of people who want nothing
else than to promote the personal growth of everyone else.
We here in Silicon
Valley live in an area where people are externally driven, and who often
ask, "What's in it for me?" We are very happy with the group of
five that we have, so we are definitely very selective about who we accept
into the Tribe. We would like to get more people, but we know it will take
Are we doing TTP "correctly"? I hope so, because we've been
accomplishing a lot of things and getting quite a few Ahas!
who are passionate about facilitating TTP and disinterested in the outcome,
tend to be the best facilitators.
who have friendships and business relationships with senders may wind up
with conflicts between:
their investments in each other's dramas
about dramas, pointing out specific trades, telling jokes and having a
generally good time are all valuable - and all generally inhibit TTP.
might take your feelings of wanting closeness into TTP as an item.
are a nice way
Sun, 6 Jul 2003
I'm looking for
a Superior Trader
I'm trying to follow your advice from the book, "Market Wizards".
I want to find a Superior Trader to do my trading for me.
My wife and I,
along with our 2 children have about $50,000 invested in various retirement
and non retirement mutual funds. None of them have performed very well.
I would gladly pay
commission to a superior trader to manage our money. Please advise me on
where I can go. Of all the "Market Wizards" interviewed, I found
you to be the most interesting and enlightening. I greatly appreciate any
help you can give me.
to pay for investment services before you determine philosophical
compatibility seems like a road to drama.
results indicate drama.
might take your feelings of wanting help into TTP.
takes a winning team
win the race.
takes clarity to gather a winning team.