Tharp's Thoughts Weekly Newsletter
: Why Science Evolves and Humanity Stagnates by Van K. Tharp, Ph.D.
: Join Van Tharp for his newly revised Infinite Wealth Workshop in July
: Apple – The 800 Pound Gorilla – Where Next? by D. R. Barton, Jr.
Adaptive Swing Trading Systems:
Advanced Trading Workshop
July 15-17, 2016
In this new three-day workshop, Dr. Ken Long will present a series of advanced, adaptive trading systems that work well in the swing period holding timeframe—from two days to two weeks.
Regression Lines – An Adaptive Framework
For years, Ken has been looking at regression lines to help him understand the broader trends in the market. Recently, he started applying linear regression methods to individual indexes and to individual stock prices to see what he could find. Ken is constantly finding what works and then extending it. He knew that a regression line gave the best linear description of a data set using its slope, and its R2 figure provided very helpful information. Don't worry if you don’t understand these terms or basic statistics—just know that regression lines can be very useful when applied in an appropriate trading system. In simpler language—they work!
As have most traders, Ken has heard plenty about moving averages crossover based systems over the years. The idea has plenty of merit for finding shorter term opportunities within longer term trends. That is, when there are trends. A major problem for moving average crossover systems lies in the flat periods. Traders can get “chopped up” when the price moves up and down causing the averages to cross and then cross back again. Ken wondered if regression lines would work better. They did – but not good enough to have a great trading system yet.
After more thinking, a good amount of research, and testing various strategies, Ken found two additional inputs that added a lot of confidence for his entry and exit signals. Ken first paper traded the concept for a while and then started a prototype trading test with small positions of real money and intraday holding periods. As he traded and evolved the concepts, they gained more clarity and evolved into a framework for a kind of trading with several possible entries and several possible exits. Today, he trades several variations of regression line crossovers (RLCO) on an intraday basis with a “production level” position sizing strategy.
Click here to learn Top Benefits of the Regression Line Framework
Why Science Evolves and Humanity Stagnates:
Or I Hate You For Your Discrimination
by Van K. Tharp, Ph.D.
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Have you ever wondered why science continues to evolve, developing more complex models, explaining more, and allowing us to create more while humanity stagnates and continues to be in conflict — often approaching war? All you have to do is look at American politics (or at politics of any other nation for that matter) to see the idea in action.
Alfred Korzybski left Europe during the First World War and came to America with the same thoughts in his head. He wondered, “Why do we continually create more functional and effective buildings, bridges, airplanes, etc? Why do the hard sciences continue to progress, generation after generation, while this is not true in areas like psychology, sociology, politics, etc.? What are the differences between the tremendous advances in one area while in the other there is still major confusion, misunderstanding, and disagreement?”
Korzybski was trained as an engineer and he wrote two very significant books. In the first book, entitled The Manhood of Humanity (1921), he created a scientific definition of man. In the second book, Science and Sanity: An Introduction to Non-Aristotelian Systems and General Semantics (1933) he developed a whole system of thinking for any form of human activity to start advancing — including the soft sciences. Unfortunately, both books are out of print although the second one can be found for free on the Internet.
Science and Sanity may be one of the most important books ever written. It forms the foundation of Neuro-Linguistic Programming (NLP) and Korzybski actually taught classes in what he called Neuro-Linguistics in the 1930s and 1940s.
One of Korzybski’s better known passages reads as follows:
“The map is not the territory it represents, but, if correct, it has a similar structure to the territory, which accounts for its usefulness. If we reflect upon our languages, we find that at best they must be considered only as maps. A word is not the object it represents; and languages exhibit also this peculiar self-reflectiveness that we can analyze languages by linguistic means. This self-reflectiveness of languages introduces serious complexities… The disregard to these complexities is tragically disastrous in daily life and sciences.”
Korzybski established many important principles which we promote in helping people deal with what might be called the “soft science” of trading. These include:
- We act, respond, and deal not with reality, but with and through our maps about the territory.
- Words are not the objects which they represent. Thus, structure — and structure alone — becomes the only link which connect our verbal processes with the empirical data. The word “market”, for example, is not the market. In fact, the market is just an ongoing process that we decide to call a thing. Many people like to represent the market with a price chart — but is that even close to accurate?
- All languages have some structure…we unconsciously read into the world the structure of the language we use.
- Languages tend to structure reality into three things — a subject, a predicate (verb), and an object. This subject, predicate, object structure leads to divisions and separation. In addition, languages have adjectives and adverbs which leads to judgment.
- Actually, reality is a lot of energy manifestations or vibrations. Your nervous system, however, turns those energy vibrations into something else. For example, there is no such thing as “green”. That is a label for what happens when a particular wavelength strikes the cones in your eyes and your brain interprets that particular sensory stimulus as green.
- Your neurology is abstracting a certain experience from the external world but that experience (as most awakened people attempt to explain) is not translatable into words.
Let me conclude this section with one of Korzybski’s most important principles that we will explore in this article:
- Identifying is the big problem in human thinking and human consciousness. To the extent that you identify, you are confusing the map with the territory. The symbol is not the thing itself.
The Van Tharp Institute is located in the state of North Carolina. Many of you have likely seen the headlines this last month following the passage of House Bill 2 (HB2) – colloquially known as The Bathroom Bill. The language contained within the bill tries to legislate many different areas, however for the purposes of this article, I won’t try to get into the myriad of ramifications of the new law. Rather, I would like to explore in the context of Korzybski’s principles, one section of the bill that has gotten so much attention and sparked so much outrage.
For those readers unfamiliar with the controversy, part of the law (loosely stated) requires each person to use the restroom which correlates to the gender listed on their birth certificate. For transgendered people, the law requires that those who were born male but identify as female use the men’s room and vice versa for females that identify as males.
Since HB2 was passed, the response from the public at large within NC and outside of the state has been massive. The state has seen ongoing and significant boycotts, from businesses rethinking plans to move their operations here, to big name musicians canceling shows that fans had been looking forward to for months. Some sources estimate that monetary losses to the state approach many millions of dollars. Tourism is a significant industry here and as summer approaches, we may continue to see ripple effects of this law. One aspiring trader emailed to ask if it was possible for us to hold our upcoming workshops outside of North Carolina. There is not enough time or space to argue the merits and faults of this law but we can certainly examine certain aspects of it that have struck a nerve on both sides in order to gain further perspective about ourselves. We are all in a spiritual process in human form and when adversity strikes, we each have the option to inquire within. In fact, our growth requires it.
Let’s look at society and our attachment to gender itself. First, there is the basic statement — I am male or I am female. Of course, current sociological convention recognizes that gender itself is not just biology but also self-identification, which exists on a continuum. Most times, a person’s gender “matches” the biology of the individual. Sometimes it doesn’t. More important than whether or not these two aspects match each other or not (because words and their connotations are maps of the territory, anyway) is Korzybski’s idea about identification and over-identification – in this case regarding gender.
Bruce Jenner’s name became synonymous with athletic achievement in 1976 when he won the gold medal for the men’s decathlon — considered the ultimate event in the Olympics. The previous gold medalist was Russian and because this was during the cold war, Jenner then became an American Hero and the epitome of the ultimate US male. We could say that society over-identified Bruce Jenner and his accolades with male-ness. The athlete (and man) Bruce Jenner was well-known and would without question, choose to enter the men’s restroom when necessary. This same person would continue on their journey through life and after many decades of soul-searching, reveal that for much of life, “he” really felt more like a “she” and recently transitioned into the person we now know as Caitlyn Jenner.
While it’s safe to say that most of us will never make Caitlyn’s acquaintance, we can assume that now she would head to the ladies’ room (and not the men’s) because of how she identifies herself — regardless of what her birth certificate says. Currently, North Carolina law would say that she must use the men’s bathroom because she was born as the male Bruce Jenner. She, like many other transgendered people, has elected not to have reconstructive surgery on her genitals – the original way that most babies are identified as male or female at birth. Caitlyn has identified strongly enough with being female that she did take certain steps to transition into what she considers her “true” form.
In the context of identification and over-identification: Caitlyn’s internal state is personal to her —what does it matter what “everyone else” calls her? Try and look at it from both Caitlyn’s perspective, and from another person interacting with her — what is it about her external self and her internal state that is anyone’s business but her own? What is the belief at the intersection of what she would like to be called and what the “other person” wants? What does it matter how she adorns herself or presents herself? Coming back to HB2, why would the state want to exert power and control over an individual who simply wants to use the restroom? Can you see how answers to these questions showcase the problem with over-identification — both on Caitlyn Jenner’s part and on the part of the lawmakers of North Carolina? Truly, what difference does any of it make? Caitlyn Jenner’s story is fairly well-known, but it is not meant to say that her example is indicative of others’ experience. She is a spiritual process having a human experience, as are we all, and even that is an example of over-identification.
Legislating citizens to the point of telling them where they “should” use the bathroom places importance on — what? Without arguing the points of the law, what are the implications here for politicians and for citizens? What does it mean if an individual deviates from the (legislated) norm? At the intersection of the “facts” in this case, and the beliefs of the individual, rises a sense of identification. The fervor surrounding this law and the positions people are taking is a key example of over-identification. Korzybski’s said over-identification is the big problem with human thinking.
Let’s take this one step further and examine the stance of a person that might oppose HB2. This person might feel so strongly that the law is wrong that they believe they have a key assumption behind the state’s actions: North Carolina is discriminatory. This goes further than believing that the government support of the law is discriminatory, that assumption now equates North Carolina with discrimination. That’s a big assumption—a really big feature on the map to describe the territory. It’s like saying dogs are aggressive—that’s the same kind of over-identification problem. Certainly some dogs are aggressive, but not all of them. There are reasons (actually more assumptions) for why a particular dog is aggressive. It could have been mistreated, it could be trying to defend itself, or it could truly be an aggressive animal. To say all dogs are aggressive is an over-identification. Coming back to the topic at hand, the person that has over-identified the law to include the entire state, may also have an overly-identified reaction to the legislation that can be translated to: North Carolina is discriminatory, we are angry and we plan to be discriminatory as well. To put this more personally, how many of you have reacted in this way in your own life? If you hurt me, then I’m going to hurt you back, maybe even more.
I have a personal example with a different kind of discrimination. I’ve lived in North Carolina for 26 years, and my wife Kala, of Indian descent, has lived here for 24 of those years — we love it here. Prior to this, I’ve lived in many places where I have had an experience of discrimination. That was also many years ago when my level of consciousness was much lower but since moving to North Carolina, we have no problems in this area.
In our 24 years of marriage, we have never experienced the issue of anyone showing disapproval of a man with white skin being married to a woman with brown skin. If you had told me in the 1960s that I would be married to a beautiful Indian woman and living in the south, I would have wondered what you were smoking. I’ve actually had to explain to Kala what it used to be like in the South because we just haven’t experienced any problems in all our years here. We can’t speak for all couples, but we can speak from our own experience — if all of North Carolina were discriminatory, wouldn’t we have at least one example of it?
In 1990 when I moved here, Cary NC had more Ph.D.s per capita than any other city in the US. In 2006, Cary was voted as the top five cities to live in the United States by Money Magazine. I think that kind of ranking is true for most of the Research Triangle area of North Carolina which includes Raleigh, Durham, Chapel Hill, and now Cary (which wasn’t counted originally). It’s been one of the safest major cities in the US and its rapid growth has slowed some in recent years but it still ranks about 34th in the country — that’s exceptional. Isn’t Cary part of North Carolina?
Our workshop room is an area that has been photographed with golden orbs in it. It has very high energy and people claim that they love to come to our workshops because of the energy. Right now it’s a rather unique business at 102A Commonwealth Court — and our office park happens to be in North Carolina. It would take a lot of work to duplicate this kind of energy in another setting. Why would such high energy want to stay in a state “known” for discrimination?
There are other areas of North Carolina that are also very special. Take Asheville, NC for instance. Asheville is a town of about 250,000 people. That city has 10 Oneness Trainers and two Oneness Sacred Chambers. Some consider Asheville a very “out-there” type of town. It’s been called “a New Age Mecca” (CBS News’ Eye on America, 1996), the Happiest City for Women (Self, 2002), and one of the seven best places to live in the US (Frommers, 2007). Isn’t Asheville part of North Carolina?
Can you begin to see how ridiculous all of this is — both on the part of those who make the laws and on the part of those who, out of anger, rebel against the laws?
The reaction that people have to laws such as HB2 shows a shadow part. A shadow part is a part of yourself that you don’t like and don’t want to own so you project it into the world where you want to fight it. Think about the statement “I hate bigots.” Isn’t that person being a bigot when they make that statement? Well, it’s the same with the people who are so angry with North Carolina. They are displaying their shadow parts. They are being discriminatory about North Carolina as they “over-identify” North Carolina as discriminatory.
One of the core principles of transformation (our core mission) is that transformation begins within — it begins with you. Perhaps it’s hard for some people to understand but there would be no wars if people didn’t have wars going on inside of them. Just because someone else seems hostile doesn’t mean that you should or would become hostile also. Just because you sense discrimination in others doesn’t mean you should be discriminatory.
Here are some quotes from A Course in Miracles on Forgiveness.
“Children perceive frightening ghosts and monsters and dragons and they are terrified. Yet if they ask someone they trust for the meaning of what they perceive, and are willing to let their own interpretations go in favor of reality, their fear goes with them. When a child is helped to translate his 'ghosts' into a curtain, his 'monster' into a shadow and his 'dragon' into a dream he is no longer afraid, and laughs happily at his own fear.
“You, my child, are afraid of your brothers and of your Father and of yourself. But you are merely deceived in them. Ask what they are of the Teacher of reality, and hearing His answer, you too will laugh at your fears and replace them with peace. For fear lies not in reality, but in the minds of children who do not understand reality. It is only their lack of understanding that frightens them, and when they learn to perceive truly they are not afraid.”
“What you think you are is a belief to be undone.”
“If you point out the errors of your brother’s ego you must be seeing through yours”
But there is one more point to make: discrimination doesn’t exist except as a word. Discrimination is a process, not a noun. You cannot put discrimination in a wheelbarrow. It is a part of an internal map you developed. You might have observed something in the past that you labeled discrimination but it only becomes solid when you turn it into a noun and decide it is bad and give it reality in the present. This is what NLP calls normalization. ACIM has this to say:
Nothing real can be threatened. Nothing unreal exists. Herein lies the peace of God.
War and conflict start within you. If you want peace in the world, create peace inside yourself. Begin to understand that what you see outside of yourself is a function of what’s going on inside of you. While the specific topic of this article probably only applies to a small number of people, most people have a war going on inside of themselves. When you see something you react to emotionally, begin to realize that that emotion comes from inside of you — not from what’s happening in the world – that’s just a pointer.
Donald Trump has made many grandiose statements including that he will build a wall across the Mexican border to keep out illegal immigrants and that he will prevent all Muslims from entering the country. In this case, Trump is equating our economic problems with illegal immigrants and terrorism with Muslims. Some people have responded quite favorably to these ideas while others have vehemently opposed them. Both reactions, however, are just more examples of the problems of over-identification and of people projecting their own shadow parts onto a candidate or onto a group of people. And, it's not just Trump. Hilary Clinton practices over-generalization in her campaign too.
Start seeing who you really are: a spiritual being having a human experience — then extend that into the world. When everyone is able to do that, we will have peace, love, and universal transformation. You may be tempted to say, “…But the North Carolina politicians don’t get that.” Perhaps — but if you have that reaction, then you don’t get it either. Start with you!
When I first started reading A Course In Miracles back in 1982, I heard the story of a psychiatric nurse who had a horrible relationship with the patients on her ward. Whenever she walked into a room, all the patients seemed to starting acting as “insane” as they could. About six months after she started doing the daily lessons in A Course in Miracles, those same patients who were previously in an uproar were now quiet. The difference was in her.
How you create your internal reality and then project that are covered extensively in Peak 203 — The Happiness Workshop — which will be given next month in North Carolina. You can also learn about these concepts from Byron Katie’s The Work.
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 matrix.vantharp.com.
Here's Just A Bit About Each New Workshops Coming In July
INFINITE WEALTH — July 8-10
The key to being infinitely rich— not having to work ever again— is to have assets and passive income (income you get without working) that are equal to or greater than your expenses.
Systems Thinking: How to Use Systems Thinking to Improve Your Trade Craft — July 12-14
Most traders think tactically – chart patterns, orders, right now or today. Systems thinking typically doesn’t enter their world.
Actually, that’s quite normal – and not just for traders. Very few people even know what the term “systems thinking” means and fewer still can actually think systematically. In fact, research in the area has shown that less than 10% of the population is able to think systematically.
Being able to think systematically, however, is a great edge for traders. Why? Capital markets are complex, dynamic, and adaptive systems. Individual traders are also complex, dynamic and adaptive systems themselves. Do you think systematically about those? If not, the markets are quite efficient at draining the accounts of unprepared participants.
There’s good news, though — you can learn how to start thinking systematically and you can develop your systems thinking mindset to gain an important edge in the markets.
ADVANCED ADAPTIVE SWING TRADING — July 15-17
In this new three-day workshop, Dr. Ken Long will present a series of advanced, adaptive trading systems that work well in the swing period holding time-frame – from two days to two weeks.
Adaptive trading systems have rules and rule parameters that adjust to market conditions and price conditions rather than remaining constant.
Click Here To Learn More
Combo Discounts available for all back-to-back workshops!
See our workshop page for details.
Apple – The 800 Pound Gorilla – Where Next?
by D. R. Barton, Jr.
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Unless you’ve been under a rock (or disconnected from all forms of media for the for the last 24 hours . . . not a horrible idea), you probably know that Apple’s stock took a big hit after it missed earnings estimates (estimates that analysts had already ratcheted down) and announced their first Year-over-Year (YoY) quarterly decline since 2003. As a side note – that has been a truly impressive run coming out of Cupertino.
I told CNBC last night that we should make a special note that this quarter’s numbers are being compared YoY to one of the truly great earnings quarters of all time. That happened when Apple announced results that included the first iPhone 6 sales. When Apple finally offered last year a screen size that competed with the big-screened Android offerings, the numbers were through the roof – higher than even the most sanguine analyst expected. That quarter set the bar so high that it has become a tough act to follow.
Fast forward to today and all of Apple’s main hardware offerings are down YoY:
- iPhone sales are down 16%
- iPad sales are down 19%
- Mac sales are down 11%.
Only services (app sales and iTunes) were up YoY. So where does that leave Apple?
Quite simply, they’re still the best darn cash cow on the planet and their profit margins are still the envy of the entire tech world. Even if iPhone sales have peaked (which is a high probability), they are running the table when it comes to profits. Here’s one of the most compelling charts I’ve seen in ages showing Apple share of smartphone profits according to Canaccord Genuity:
That’s a truly astonishing graphic. That sucking sound you hear is Apple vacuuming up all the profits in this space despite selling fewer phones that their Android competitors.
What should you do if you own Apple stock? I think that for now, traders have over-reacted to the numbers and we have a high probability of short-term rebound. Then longer term, with the company committed to pouring an eye-popping $175 billion in cash into stock buybacks and another $75 billion into dividend growth, Apple is turning into a value play every time it dips too low like we saw this week.
Please send your thoughts and 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 a 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".
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!
Eleven traders tell their stories about transforming their trading results and lives, in this 400 plus page book.
Below is a brief video on how powerful this book is to traders.
Swing Trading Systems E-Learning Course
Ken Long's systematic approach to swing trading with 5 distinct trading systems. This course has over 10 hours of instruction with significant follow-along documents included for students to download.
Review the videos as many times, and as often as you like, for one full year. Plus, you receive a bonus workshop at no extra charge—Dr. Van Tharp's Tharp Think Essentials!
If you are interested in both this video home study program (featuring mechanical, rule-based systems) and our new Advanced Adaptive Swing workshop (adaptive trading systems have rules and rule parameters that adjust to market conditions and price conditions rather than remaining constant) you benefit by buying both at the same time.
When you register for the workshop you can get a 22% discount on this home study.
The home study is not required to attend the workshop, however, an understanding of the systems in the the video home study may help a less experienced trader better understand the more advanced trading style which will be presented in the workshop. The systems, however, are totally different and the Advanced Adaptive Systems Workshop does not build upon the systems in the home study.
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...
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