Tharp's Thoughts Weekly Newsletter
: Inside-Out Psychology, by Dr. L. Michael Hall
: Forex Coming to Berlin, Germany in September
: June’s Biggest Announcement - Not From the Fed? by D.R. Barton
News, Announcements and Updates
We are happy to announce that The Van Tharp Institute will host Forex Trading Systems Workshop with Gabriel Grammatidis in Berlin, Germany! Dates are set for September 2015, and registration is now open!
Dr. Tharp's update below includes upcoming changes within the Super Trader Program. While a price increase is coming soon, you still have time to apply and be accepted into the program at the current rates! There are two opportunities to attend qualifying workshops in order to be considered, before the price increase takes effect.
by Dr. L. Michael Hall
View on-line to resolve formatting problems
I requested Dr. Hall’s permission to reprint the following article because he says it so well: Everything starts on the inside. You absolutely have to work on the inside first and that’s why Super Trader 1 focuses on the journey within, before even getting started on the trading aspect of things. —Van Tharp
A central theme that you will find throughout Neuro-Semantics, a theme that is consistent with everything we do, is the idea that human experiences inevitably involve an inside-out psychology. This is most explicit in the modeling of wealth creation that I did in the early 1990s and the title of the book, Inside-Out Wealth. It actually took a good bit of time for me to truly understand that. That's because it is so easy to assume that wealth is an outside-in experience. This is what most people are taught, what is predominant in most trainings on wealth creation, and what seems most natural. After all, money is an external thing, isn't it?
Yet the answer is that it is not. What we call "money," what we typically count as money is not actually an external thing. This is what Dee Hock, former CEO and founder of Visa discovered. And if money is not, wealth is even more so not an external thing. If this isn't immediately obvious to you, you can read more about it in previous "Neuron" issues (see www.neurosemantics.com for the back issues) and/or see the book, Inside-Out Wealth.
This principle actually holds true for every human experience. It holds true for Games Slim and Fit People Play (2001). Health is an inside-out thing. You can't buy it, you can't insure it, you can't have it delivered to your home. If you want it, the experience comes from the inside-out. First, you set your own understandings, beliefs, values, intentions, decisions, etc. for health and then—over time—you actualize it in your lifestyle. So also loving relationships. To get love and to have lots of experiences of love, first become a loving person on the inside (Games Great Lovers Play, 2002).
Would the same thing be true of leadership? Is authentic leadership an inside-out phenomenon? Yes of course! That's because real leadership is not a position, a title, or a status that someone gives you. Typically position, title, and status are signs that recognize that a person is a leader. Yet do you need these to be a leader? Of course not. Many great leaders had none of these. Think Martin Luther King, Jr. And if effective leadership involves the skill of "bringing out the best in people" this speaks about a high level competency that is within a person (see Unleashing Leadership, 2007).
What about Coaching? Yes, the same thing. Great coaching is an inside-out process. That's why the person of the coach plays as important a role as the coach's skills. In fact the skills are really only truly effective when it comes from the being-ness of a caring person. That's why being the person who has developed his or her own unique synergy of compassion and challenge then enables a person to compassionately challenge by one's very presence. So no wonder there are times in a session when a coach doesn't have to do anything - just hold the space. That's because what happens in coaching is not that the coach adds "formula X" to the client. It is rather that the coach, like any leader who brings out the best in people, does so by enabling the person to unleash and unfold the gifts and resources that are clamoring inside to be released.
Inside-out psychology means that all of us create our own psychological experiences from the inside-out using the power of our internal resources. This goes to our four fundamental powers of thinking, feeling, speaking, and acting. Owning and developing these essential functions enables us to step up to taking control of our thoughts and mental states and to then use our powers of influence on the world and on others (speaking and acting) in ways that enhances the quality of life. This explains why we use the pattern called The Power Zone in Neuro-Semantics as the most essential pattern, a pattern which informs every other pattern. To do that we invite people to step up to owning their powers, to put them "at cause" for their own lives and responses, and to awaken them to all of the choice points of life where they can access being the navigator of their own life, rather than a victim.
This inside-out psychology explains why NLP and Neuro-Semantics focus on the inside world of meaning-making. As a cognitive psychology, these self-actualization models know that the secret key to everything lies in a person's meaning constructions. As you construct your inner world of understandings, believing, intending, deciding, identifying, permitting, etc.—so you experience your outer world of work, relationships, budgeting, money, career, hobby, fitness, etc. In this, the quality of your life is a function of the quality of your meanings.
It is only when a person understands this inside-out principle in life that ongoing learning, personal development and training, and accessing one's highest and best states makes perfect sense. Until then, adult learning, reading, studying, and training seems like something to do in a remedial way, or something extra that you might want to add to your life. Understanding the inside-out principle brings the realization that these processes are the key to every important value in life. And when you realize this as an "Aha!" everything changes. Then being becomes your orientation, purpose, and direction. Then doing takes second place. After all, the best doing comes from the highest being. Then having comes third.
In modern life we have it all turned around. Most people put having first — having all of the things that our modern consumer society puts before us as what we need to have if we want to be happy and successful. Some people make this not only the first purpose of life, but their only purpose. They only have "life" if they have the latest toys. They have to be "in" with the latest brands, and the more expensive the better. Others put doing first and as the purpose of life. So they are always on the run-doing, achieving, experiencing. And for most, being comes in at a far distant third, if at all.
Being is less empirical and less objective so most people treat it as less important and some treat it as non-existent because it is so internal. Yet being living your highest meanings and expressing your best self is the greatest success and brings the greatest joy in life. And that's why we focus on the Inside-Out in Neuro-Semantics. Are you ready for that inner game? That inner journey?
Reprinted with permission
Meta Reflections Newsletter #19, April 27, 2015
Neurons Digest, Vol. 101, Issue 7
Dr. Hall is known as a prolific writer with 30 some books to his name, more than 100 published articles and is recognized as a leading NLP Trainer and developer of many models, most notably the revolutionary Meta-States model and more recently the Matrix model. Learn more...
Super Trader Program
New Rates Begin in August
One of the great things about students coming to workshops at The Van Tharp Institute is that we get to see so many traders return again and again to further their education. Many students have expressed an interest in the Super Trader Program throughout 2014, and I regularly hear people say they are thinking about joining the program “next year.” While "next year" could truly mean 2016, I want to be sure everyone is aware of a price increase that may affect the timing of your decision to join.
Currently, the tuition for the Super Trader Program averages out to $15,750 per year. Beginning August 31st, 2015, the new average yearly rate will be $16,750. While that’s a 6.3% increase in price, the new tuition rate is still substantially below the previous rate of $25,000 per year, (when you had only two years to complete the program) or the rate for just one day of my consulting (now $20,000).
Before the tuition increase on August 31st, we will allow as many as eight qualified applicants to enter the program at the current rate.
To qualify for the Super Trader program, you need to:
1) Attend a Peak Performance 101 Workshop or a Oneness Awakening Workshop, so that I can assess if you are able to work on yourself. (You have two opportunities to attend a qualifying workshop if you have not yet done so. There’s a Oneness Course on June 13-14 and there’s a Peak Performance 101 Workshop from August 7-9.)
2) Complete an application and a waiver form;
3) Submit a $5,000 deposit; and finally,
4) I need to officially accept you into the program.
We will accept up to eight students under the current tuition rate. Your application is not complete unless all the above steps are finished. If you are one of the first eight people approved before the end of August, you will be admitted into the program at the current tuition rate.
In addition to the requirements above, read Trading Beyond the Matrix. That book is really a self-study version of the entire Super Trader program and it will give you an idea of what you are getting into. If you don’t really like the book, then the program is probably not for you.
To learn details of the Super Trader program go to www.vantharp.com/products/super-trader-program.asp.
Our Super Trader clients come to program from all parts of the world, from many professions and varying trading experiences. But, they all have one thing in common: a desire to be the best they can be and an earnest desire to transform their lives and improve their trading.
A few of our current participants have shared feedback on their experience. Here's one below. Click through to read more.
"The Super Trader program has created massive transformation in my life. Before I started I felt I was on a treadmill, my emotions were dependent on what was happening, I was angry, defensive and unforgiving and I regularly broke my trading rules. My trading results reflected that.
I joined the program in June 2013 after attending Van Tharp’s Peak Performance, Blueprint and Systems workshops in Sydney in 2012 and 2013. Those workshops had shown me very clearly that my real problems were with my psychology rather than my trading systems. I needed to change how I looked at the markets and how I looked at myself. At first I thought I could make the transformations myself using the workshops and the Home study course. I did make some progress, but after talking to several Super traders I realised I was selling myself short by not availing myself of the mentoring and support from Van and from other Super traders. This is a key part of the Super Trader program and I found it invaluable for my success. There are also several lessons in the program that are available only to Super Traders and these proved critical to my transformations.
I completed the psychological part of the program in November 2014 and now I am a very different person. I am happy and satisfied all the time without needing any particular reason, my self-esteem is high, very little ever upsets me and if something does the feelings pass immediately. I have a new sense of purpose, I have been able to forgive everyone I used to be angry with and I have the emotional control and self-discipline I need to trade successfully. The transformations will not only benefit my trading, but have made a huge difference to my relationships with my family and friends and how I go about my day to day activities.
I am now in Super Trader 2 and am in the process of developing my trading business plan and my trading systems. I now look at the markets very differently to before. I am now seeing what the charts are telling me about what is happening in the market. I am thinking about expectancy, reward to risk, SQN and how I can position size to get the best results out of a system and meet my objectives instead of simply looking for entries and exits. At the “technical” workshops the amount of sharing and cooperation between participants is much greater than I have experienced elsewhere and is very useful. The Super Trader program has and will make a massive difference to my life and to my trading. I could not have done it by myself. I am very grateful to Van and all the staff at VTI and the other Super Traders."
Click here to read more about what Super Traders say about the program.
To read more about the entire Super Trader Program, click here.
Remember these dates:
Oneness Awakening workshop, June 13-14
Peak Performance 101 workshop, August 7-9
The price increase goes into effect August 31st or after the first 8 open slots are taken.
Combo Discounts available for all back-to-back workshops!
See our workshop page for details.
June’s Biggest Announcement - Not From the Fed?
by D. R. Barton, Jr.
View on-line to resolve formatting problems
Quick quiz: What U.S. equity index family has the most money benchmarked to its indexes?
Standard and Poor’s would be a good guess with their popular S&P 500 index —but that’s not the one.
How about Dow Jones? Their venerable industrial average is still the most quoted index out there. But that’s not it either (and besides, S&P and Dow Jones indexes are both owned by McGraw Hill Financial now…).
And no, it’s not NASDAQ.
That leaves us with —drumroll please – the Russell family of indexes.
Russell indexes are benchmarked by $5.2 trillion (yes, trillion with a “t”). According to the folks at Russell, more U.S. institutional equity products are benchmarked against Russell indexes than against all other U.S. equity indexes combined. In market share terms, Russell benchmarks a 73% share of all U.S. institutional equity products.
WOW! There’s a fun fact (or three) that I didn’t know.
So why the fascination with Russell indexes? Among other reasons, the Russell reconstitutes their indexes each year –unlike the S&P 500 and the DJIA which adjust their indexes on an irregular basis. Russell adds and drops individual companies from their famed Russell 2000 index each year. The same goes for the influential but less widely followed Russell 1000, 3000 and Global indexes.
An Annual Rebalance – So What?
Since Russell has the most widely followed indexes (meaning lots of $$$ involved) and since they have a regular schedule, traders try to game the rebalancing announcement. (I know that Russell uses the term “reconstitute” – but that makes me think I’m messing around with dried mushrooms in an obscure recipe somewhere…)
Here’s the essence of the play. The most widely used index for this “reconstitution arbitrage” is the Russell 2000 microcap index. Why? Because usually stocks that are added to this index come from obscurity and go to the big leagues thus requiring index-following funds to buy them also. Stocks that graduate from the Russell 2000 microcap index to the large cap Russell 1000 index don’t get the same bump in interest since they are relatively well-known already.
So every year, lots of people try to game Russell’s system by guessing which small cap stocks it will add to the Russell 2000 index. The theory is that if you can identify these Russell 2000 stock candidates and buy them ahead of the institutions, you can generate profits after the announcement as the institutions have to buy them.
If you’d like to play the game, consider an important point—one institutional broker forecasts this year’s market cap hurdle for any new Russell 2000 member at between $170 million and $175 million. So identifying companies that have grown in market cap since this time last year, have jumped over the hurdle level, have sufficient liquidity and float should give you a decent chance of finding a small cap stock that the Russell folks might be identifying as well.
Such worthy stocks could enjoy the fruits of being added to the Russell 2000 in the coming month. According to the Russell index site, this year’s announcement of stocks to be added and dropped will happen on June 12th at 6 p.m. EDT. That list will be updated on June 19th and June 26th. Russell will post the final membership list on June 29th which will give institutions two trading days to make adjustments before the end of Q2.
The Russell Rebalance Arbitrage Play – Some Caveats
Charles Schwab analysts looked at all the stocks added to the Russell 2000 over the last 10 years. They found that those stocks, on average, gained 19.48% for the three month period from March 31 to June 30. Compare that gain to the average Russell 2000 Index gain of 3.03% over the same time period.
As you might imagine, that kind of outperformance has attracted the attention of all manner of institutional traders and investors. So the arbitrage play for these stocks has become crowded. In practical terms, this means that prospective Russell 2000 stock prices move up sooner while the action after the announce date can be precipitous. For example, here’s a price chart for OLBK. Amid broad speculation that it would make the cut in 2014, it was indeed added to the Russell 2000.
Look what happened in the months prior to the announcement and then what happened to the price after the announcement:
See Larger Image...
So if you’re tempted to play the Russell 2000 “reconstitution”, be aware that the trade has probably gotten very crowded by this point in the process on these thinly traded stocks. Adjust your timeframe for entry and exit and manage your risk accordingly.
I hope this look at the Russell rebalancing phenomenon was thought provoking. Your views and comments are always welcome! Please send them to drbarton “at” vantharp.com – I always enjoy hearing from you!
About the Author: A passion for the systematic approach to the markets and lifelong love of teaching and learning have propelled D.R. Barton, Jr. to the top of the investment and trading arena. He is a regularly featured analyst on Fox Business’ Varney & Co. TV show (catch him most Thursdays between 12:30 and 12:45), on Bloomberg Radio Taking Stock and MarketWatch’s Money Life Show. He is also a frequent guest analyst on CNBC’s Closing Bell, WTOP News Radio in Washington, D.C., and has been a guest on China Central Television — America and Canada’s Business News Network. His articles have appeared on SmartMoney.com MarketWatch.com and Financial Advisor magazine. You may contact D.R. at "drbarton" at "vantharp.com".
Enter the Matrix Contest
for a chance to win a free workshop!
We want to hear about the one most profound insight that you got from reading Van's new book, Trading Beyond the Matrix, and how it has impacted your life. If you would like to enter, send an email to email@example.com.
If you haven't purchased Trading Beyond the Matrix yet, click here.
For more information about the contest, click here.
Everything we do here at the Van Tharp Institute is focused on helping you improve as a trader and investor. Consequently, we love to get your feedback, both positive and negative!
Send comments or ask Van a question by clicking here.
Also, Click here to take our quick, 6-question survey.
Back to Top
Email us at firstname.lastname@example.org
The Van Tharp Institute does not support spamming in any way, shape or form. This is a subscription based newsletter.
To change your e-mail Address, e-mail us at email@example.com.
To stop your subscription, click on the "unsubscribe" link at the bottom left—hand corner of this email.
How are we doing? Give us your feedback! Click here to take our quick survey.
Call us at: 800-385-4486 * 919-466-0043 * Fax 919-466-0408
SQN® and the System Quality Number® are registered trademarks of the Van Tharp Institute and the International Institute of Trading Mastery, Inc.
Be sure to check us out on Facebook and Twitter!
Back to Top
May 21, 2015 #734
Pardon our delay in sending this week's issue a day later than normal. We had internet connection problems Wednesday which prevented production and distribution.
Van's Top-Twelve Favorite Trading Books
Van's Favorite Non-Trading Books
Viewing on-line eliminates spacing, and formatting problems that may be unique to your email program.
Ongoing Contest: Learn how you could win a $50 coupon and a grand prize of a free workshop!
"I base my long-term, monthly rebalancing [core] strategies on research into relative strength and momentum as it relates to broad asset classes."-K Long
A Must Read for All Traders
How are we doing?
Give us your feedback!
Click here to take our quick survey.
From our reader survey...
"I think the newsletter is extremely generous and it is a resource I utilize constantly. I have saved every single one since I first subscribed."
Trouble viewing this issue?
View Online. »
Van Tharp You Tube Channel
Tharp Concepts Explained...
Risk and R—Multiples
Learn the concepts...
Read what Van says about the mission of his training institute.
The Position Sizing Game Version 4.0
Have you figured out yet how to pick the right stocks? Are you still looking for a high win-rate trading system? When you’re ready to get serious about your trader education, download the Position Sizing Game to learn some true fundamentals of trading success. Learn more.
To Download for Free or Upgrade Click Here
Download the first three levels of Version 4.0 for free:
Register now. »
Trouble viewing this issue?
View Online. »
Dr. Tharp is on Facebook
Follow Van through
Check out our home study materials, e-learning courses, and best-selling books.
Click here for products and pricing
What Kind of Trader Are You? Click below to take the test.
Tharp Trader Test
Back to Top
Introduction to Position Sizing™ Strategies
Perfect for auditory/visual learners who learn more effectively from an instructional format that is full of interactive features!
SQN® and the System Quality Number® are registered trademarks of the Van Tharp Institute