Tharp's Thoughts Weekly Newsletter
ENROLL NOW IN OUR SPRING
PEAK PERFORMANCE COURSES!
What better time to begin a journey that will lead to
personal and professional growth?
Immense success is possible for most traders and investors, but the secret to that success has little to do with some magical trading system. Instead, it has everything to do with you. You are the secret ingredient to your success. And when you transform yourself, you transform everything.
Peak Performance 101 is Dr. Tharp's core psychological workshop, and his most transformative course for over 20 years. If you want to know how great traders think, behave, and act, so you can achieve consistent and profitable results, without stress, then this workshop is for you.
Peak Performance 202 is a major leap forward for those of you who are willing to step out of your comfort zone. In Peak Performance 202, you’ll learn how to make a declaration for a trading vision that might seem all but impossible now. You’ll also learn how it is possible, and how you can take the first steps toward a new you, and success that’s beyond your current scope of understanding. This workshop is that powerful.
Peak Performance 203 - The Happiness Workshop Those of you who have finished the new edition of the Peak Performance Home Study Course know that Dr. Tharp describes several different models for self-sabotage:
- The Matrix Model says we are programmed to self-sabotage.
- The Creative Model says that when we disown our creations, we are committing self-sabotage.
- And the most significant model, Oneness, shows us that most of what we do, which keeps us in an ‘ego’ state, is self-sabotage.
Dr. Tharp has now discovered how to help people through these self-sabotage issues at the deepest level. And the basic concept is simple: When you are not doing what brings you joy, you are committing self-sabotage. Imagine moving toward being happier and happier, and at the same time becoming more and more successful as a trader. Well, that’s the core concept behind Peak Performance 203 Workshop: Avoiding Self-Sabotage by Following Your Bliss.
New! Modeling Great Trading Through Mental Strategies (Peak 204) The material presented in this new, advanced workshop is poised to make a dramatic impact on your life. While in attendance, you will gain understanding about how you are the central character in your story, and how you really create this story, and see how you can ultimately play an active role in shaping your own life. By thoroughly exploring how each of us uses mental strategies and the sequencing of thoughts, you will have the groundwork to continue to hone your skills throughout the workshop, and beyond.
Click Here to Register NOW!
Super Trader Transformations
by Van K. Tharp, Ph.D.
Click here to resolve formatting problems
Most of you probably know that our mission at the Van Tharp Institute is transformation through a trading metaphor. I have talked about levels of transformation in the past and next week will expand the discussion to explore three models, or three levels, of transformation: Levels of Consciousness, The Matrix Model, and Moving Beyond the Matrix. But this week I’d like to talk about the kinds of transformations that I look for in evaluating whether or not our Super Traders have finished the first phase of the transformational program.
Before moving Super Traders on to the second phase of the program, I require evidence of five major personal transformations. One person, however, remarked to me, “I’m not interested in you passing judgment over me about the transformations I make and whether they are valid or not.” My response to that statement was, if a person had five massive transformations while going through Super Trader 1, they were probably equipped to handle whatever else came up while they were trading. To me, a valid transformation is big enough that the person’s life has changed in noticeable ways.
Over time, I have observed that most of the transformations in the Super Traders seem to fall into the following categories:
1) A massive increase in awareness. Awareness really means that you are aware of your thoughts, feelings, and emotions rather than being run by them unconsciously. When you become aware, a thought might arise (e.g., that person is rude), you notice it, and you let it pass rather than attaching to it and reacting to it. Another example — someone cuts you off in traffic, some swear words go through your mind with a little charge of anger. You notice it, perhaps you even welcome it, and then suddenly it fades from existence. The anger is not expressed because it is no longer there.
Depending upon your level of consciousness, you might have a high state of awareness for a few seconds here and there or you might have it all the time. You might only become aware when you feel a strong charge or you might notice nearly every thought that goes through your mind.
One of the transformations I often see in people who complete Super Trader 1 is a massive increase in awareness which they express in various ways. In addition, a new level of awareness translates into a decrease in the tendency to judge others or the world which naturally results also in seeing the perfection of “What IS”. Increased happiness scores are another result from this transformation.
2) The mind quiets down. Another frequent though less common transformation might be referred to as 1) a quieting of the mind; 2) a letting go of clutter; or 3) perhaps being at peace for no reason. If you become aware of your thoughts for long enough, then the mind cannot play its typical tricks on you because taking control of you is very difficult when you are aware. As a result, the mind gradually seems to calm down and it becomes peaceful or quiet.
3) Others report a massive release of charge. This transformation also makes people seem much more at peace. Say your mental state is one of perpetual fear or some other form of charged emotion. If you do massive feeling releases on that sort of charge, the end result is that you are no longer run by the charged state. People then have the experience of being much more peaceful even though they still have a very active mind. This would certainly be a huge transformation for the person who made the comment earlier about valid judgments.
4) Awareness of human games. We teach in the Advanced Peak Performance Workshop, Peak 202 that games are any activities which have winners and losers. Money is such a game. Trading is such a game. Power is such a game. NFL football is such a game.
Games have structures - some method of keeping score — how you define winning — and they have rules to keep the game in place. The rules seem mandatory because of the severity of the perceived punishment should you break the rules. But all rules are made up by someone or by some group. As you become aware of the games in the world, it’s possible for you to devise and play your own games or, at least, change the rules so that you have a much better chance of winning whatever games you are playing now.
For example, the game of money as played by society is typically thought to be won by having the most money. You get on the Forbes 400 list or better yet, you are #1 on the Forbes 400 list. In that game, however, only one person (or 400) of 7 billion people can win this game. As a result of so few winners, Madison Avenue has tried to transform the money game into those who have the most toys are the winners. Society makes this game is easier to play, even for everyone who isn’t wealthy. Thus, if the down payment on a nice toy is small enough, you can buy it now. Nearly all of the money games people play mean massive financial slavery.
There is another alternative to the traditional money game. It’s called the “Infinite Wealth” game. In this version of the money game, you win when your passive income is greater than your expenses. This is one of the primary topics of the New Infinite Wealth Workshop. The infinite wealth version of the money game is one that very many people, if not everyone can win.
I’d consider it a valid transformation if a Super Trader saw the wealth game for what it was and became infinitely wealthy instead. Another valid transformation in this area would be if someone saw the trading game for what it was and was able to trade consistently at 95% efficiency (one mistake in 20 trades) or better.
When you start becoming aware of all the games you play and then you make up your own rules in ways that don’t hurt other people, you’ve really achieved a massive transformation - you have realized that you make up your own reality.
5) Awareness of who you are is another major transformation. If you think you are the person whose name you go by, then you are probably very robotic in your life. You are full of conditioned reflexes that continually program you and give you little choice in how you lead your life.
However, as I have explained in other articles on transformation, you are actually a crowd of parts all of whom use the personal pronoun “I.” When you are unaware of your crowd inside, you never know which part is in charge at the moment (you always think it’s just “me”) and you are full of conflict. As you become more aware of who you are, then you can resolve your internal conflicts and eventually you can even eliminate all the parts. When all the parts are gone, all that remains is your Inner Guidance or what Libby Adams calls, your Big I. Awareness of your parts, and a massive reduction in their number is a major transformation. And the more parts you get rid of, the easier it is to communicate with your Inner Guidance
6) Getting in touch with one’s Inner Guidance and developing a strong bond with that guidance. Perhaps the biggest transformation you can make (most people who finish Super Trader 1 make this one), is getting in touch with your Inner Guidance. It’s a major step in seeing reality as opposed to seeing the illusion that your thoughts create. This step is necessary for what I’ve called Trading Beyond the Matrix.
7) Another major goal that usually happens once you have a strong bond with your inner guidance is finding your purpose in life. Your purpose is usually a very simple set of guidelines but it gives you a direction for the rest of your life. Suddenly, you spend your life going with the flow of life instead of swimming upstream. Here are some simple examples of the purpose that people have come up with.
- To create love and happiness,
- To be in a state that would be heaven…in the presence of God…heaven on earth,
- To create happiness, joy, love and bliss and share that with others,
- To do Good,
- To realize “I am.”
My purpose is to help others awaken through transformation. Over time, however, I also realized that I could only help others to the extent that I transformed myself. As a result, the last 40 years of my life have been a continual search of transformation techniques. If they work for me, then I help others adopt them as well. It’s an immensely rewarding journey. Everyone who finds their purpose through the Super Trader program says that it changes everything.
8) Control over my everyday life. Some might call this increased self-discipline. Others might call it increased congruency. As you learn how to develop well-formed goals and eliminate conflict, then there is a huge upgrade in your ability to meet those goals on a regular basis.
9) Forgiveness. This form of transformation might be hard for anyone to understand who has not had the experience of forgiveness. You cannot possibly understand forgiveness because these words to not convey the experience of its transformative power. In fact, these words are part of the illusion. That being said, as you begin to understand how you make up the world through the meanings you give to words and that the words you use do not equate to what they are symbols for, then judgment begins to stop. You realize that you made it all up. Thus, there is no such thing as sin that needs to be forgiven. In fact, the form of forgiveness advocated by A Course In Miracles is to 1) understand that you are having a dream; 2) to forgive yourself for having the dream; and 3) to forgive your “brother or sister” for being part of that dream. This sort of transformation can dramatically improve your self-image, your relationship with your family, your relationship with your work, and bring about numerous other transformations.
10) Being in a state of continual gratitude. When you understand meta-states, you begin to realize that the highest level metastates will rule your experience. So let’s say your primary state is fear. You could metastate that fear, by fearing the state of fear. This is different from the primary state of fear as the metastate brings about a pathological state that could border on psychosis, an extreme form of fear. Instead of fearing fear, you could welcome the fear. In this case, you are metastating welcoming — a form of gratitude. Doing so is one of the forms of mild feeling release given in the Sedona Method. There are many, many useful metastates that you could adopt but one of the most advanced metastates is that of gratitude.
Metastating gratitude comes about when you begin to see the perfection of the “what is.” Many people can start to get this when they realize that what may have been perceived as one of the worst times in one’s life actually turned out later to be one of the best. For example, when I separated from my ex-wife almost 26 years ago, I went through two different lawsuits and two different appeal processes. At that time, the process felt like going through hell, however, the net result is that I’m now married to my soulmate, my perfect partner. We’ve been married for 23 years and it keeps getting better.
As you begin to realize the perfection of the “what is,” then you can begin to feel grateful and the feeling of gratefulness is very transformative. In fact, you might interpret it as “Great Fullness.” For example, you make a judgment and suddenly you notice a charged feeling coming up but no matter how negative it is, you feel gratitude for it. You understand that you have just discovered another charge that you can now process and thus free yourself from it forever. Until you discover it, however, the charge is hidden and locked inside of you creating automatic negative responses. Once you become aware of it, you can feel grateful knowing that it will soon be gone forever. Thus, I consider a continual state of gratitude to be a huge transformation.
Now imagine having experienced five or more of the transformations described above. How much do you think your level of consciousness would change? What impact do you think that level of change would have on your performance as a trader? The answer is probably a huge one.
Anonymous. A Course In Miracles: The Workbook, 2nd Edition. Mill Valley, CA: A Foundation for Inner Peace, 1992.
Dwoskin, Hale The Sedona Method Course. Sedona, AZ: Sedona Press, 2003.
Tharp, Van K. Trading Beyond the Matrix. New York: Wiley, 2013
About the Author: Trading coach and author Van K. Tharp, Ph.D. is widely recognized for his best-selling books and outstanding Peak Performance Home Study Program—a highly regarded classic that is suitable for all levels of traders and investors. You can learn more about Van Tharp at www.vantharp.com. His new book, Trading Beyond The Matrix, is available now at to our subscribers at no charge. Request your copy by clicking here.
Combo Discounts available for all back-to-back workshops!
See our workshop page for details.
NEW! The Latest Swing Trading Videos From Ken Long
In preparation for the Advanced Swing Trading Workshop in July, Dr. Ken Long has been actively tracking swing trading opportunities and making short videos about them. In these two pieces, about 15 minute each, Ken provides updates on the series of trades that he began stalking about two weeks ago. In the first video made on Sunday, March 6, Ken discusses the importance of continued trade management for the dozen or so positions for which he had about +20R in hand.
After the market close on Tuesday, March 8, Ken created another video reviewing the status of the positions – some of which had been closed and some of which were still open.
Yes, the Markets Have Been VERY Volatile
by D. R. Barton, Jr.
Click here to resolve formatting problems
Back during my 15 years with DuPont, I had one stint for two years running the small industrial composites group. Composites take advantage of the best properties of two materials such as combining the great flexibility a polymer (fancy plastic) with the extreme strength of carbon fiber.
One of the most intriguing composite projects we worked on was developing ultra-strong material to make flywheels for energy storage. The theory for flywheel batteries is pretty simple — store electrical energy by converting it into kinetic energy (energy that results from motion). In simple terms, use electricity to spin a wheel (very fast) so that it then becomes a high-tech, high capacity battery (a store of energy).
The main problem for kinetic energy engineers is that a spinning wheel wants to slow down. And the main thing that slows the wheel down is the bearing — the mechanical part that supports the wheel while allowing it to spin.
Early innovators in modern flywheel technology found that this was such a big problem that it dwarfed all others. The problem was so central that flywheel pioneer Richard Post famously hung a sign in his office at the Lawrence Livermore lab that read, ''It's the bearings, stupid.''
I could use a sign like that in my office too — though not about bearings. Looking at my recent trades and the market action for the last two months, a sign could remind me “It’s the volatility, stupid”. So many of my swing trades have been stopped out but fortunately, there have been some big gains too. The volatility really has been a double edged sword!
That’s a Lot of Volatility
In the past, I’ve written articles on volatility during the week between Christmas and New Year –traditionally the lowest volatility week of the year. Many times, the quiet seems to bleed over into January and February — which are also typically pretty quiet months.
Let me stop to remind folks that volatility is almost always associated with down markets. A volatile up market is one of the rarest of beasts — so much so that I don’t even consider volatile up markets in trading system design. Why plan for something that basically never happens?
That brings us to the next point: the beginning of the year is traditionally a strong market period. From 1928 — 2016, Januarys have averaged a 1.1% gain according to Yardeni Research. February has been basically flat across those same years, down just -0.1 on average. So that data confirm the perception that January and February are usually a low volatility period.
Not so this year.
In fact, the numbers show that this is one of the most volatile beginnings to a year in history. Let’s look at the numbers…
Volatility by the Numbers
If you have been getting whipped out of positions during 2016, there’s a good reason for that — and we can see it in this chart generated by Bespoke Investment Group:
Going all the back to 1928, this chart shows how many days have had a 1% move (up or down) in the S&P 500 during the two-month period of January and February.
The data are actually quite striking; no year between 1938 and 2002 had at least 20 days with 1% moves in January and February. We had the first one at the end of Internet Bubble bear market and then both 2008 and 2009 had hugely volatile beginnings to the year. No surprise there. Then there’s this year, where we had 23 out of 39 trading days that moved at least 1%.
This graphic got me thinking about my favorite measure of volatility — 14-day Average True Range (ATR) divided by price. In January of this year, with the S&P’s ATR at 45.77 points, ATR divided by price (1906.90) showed us that the relative volatility was 2.4% — meaning the average daily move in the S&P in January and February was 2.4% of the price.
How does this compare to past years? Given the chart from Bespoke above, the results were not too surprising but were still impressive. Going back to 1986, only three years have had a January or February ATR/Price volatility spike that went as high as 2.4%: 2001, 2008 and 2009.
So while our markets have been quantitatively crazy, volatility has dropped in recent weeks. The ATR/Price number is now 50% of the peak it hit in January though it’s still very high relative to levels we have seen over the past 7 years.
While the markets remain volatile, make sure to adjust your stops, targets and position size accordingly so that they take the added movement potential into account.
Please let me know your thoughts and opinions on the article. Send your comments 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".
We're Giving You a FREE Book!
TRADING BEYOND THE MATRIX
The Red Pill for Traders and Investors
We pay for the book, you pay for shipping.
ALL YOU HAVE TO DO IS CLICK HERE!
Below is a brief video on how powerful this book is to traders.
Swing Trading Systems E-Learning Course
The new Swing Trading Systems home study course is now available! Learn with Dr. Ken Long as he teaches his Swing Trading Systems Workshop via streaming video!
This new e-learning course includes Ken Long's Swing Trading Workshop, 5 swing trading systems and a bonus workshop featuring Van Tharp on Tharp Think principles. The course also includes extensive downloadable files to support your learning.
You can complete this course at your own pace, from the comfort of your own home or office, and access the materials as many times as you wish during your 1-year subscription period.
Take a look at this video from Ken to learn more about this course.
We have extensive information about the Swing Trading System e-learning course, including how to purchase...click the link below!
Learn More About The Swing E-Learning Course...
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 firstname.lastname@example.org.
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 email@example.com
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 firstname.lastname@example.org.
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
March 9, 2016 #775
Van's Top-Twelve Favorite Trading Books
Van's Favorite Non-Trading Books
Viewing on-line eliminates spacing, and formatting problems that you may experience in your email program.
Ongoing Contest: Learn how you could win a $50 coupon and a grand prize of a free workshop!
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...
Trouble viewing this issue?
View Online. »
Check out our home study materials, e-learning courses, and best-selling books.
Click here for products and pricing
What Kind of Trader
Tharp Trader Test
Are You? Click below
to take the 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