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Tharp's Thoughts
Weekly Newsletter
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Feature: Your Trading and Consciousness, by Van K. Tharp Ph.D.
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Workshops: Three Workshops in London, England This October!
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Tips: Is Your Analysis Boxed In? Good for You…, by D.R. Barton, Jr.
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New Innovations From Trading Psychology Expert, Van Tharp
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Since I taught the Systems Thinking Workshop at the Super Trader Summit last year, my understandings in this field have evolved greatly and deepened far beyond what I taught nearly a year ago. I will basically teach a new version of the workshop explaining my evolving thoughts, beliefs, and philosophies about my latest theory – the Matrix Thinking Meta-Model. Understanding it will help you begin to realize how YOU create everything around you.
You will learn how to see from multiple perspectives, why you should think in terms of probabilities all the time, and how to reach higher levels of consciousness. Using the Matrix Thinking frame will help you achieve an improved perspective of “you” and your world which will generate genuine new edges in your trading — and in every area of your life. —Van K. Tharp
Click the image above or scroll down for more information. Dates are September 19-21.
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Your Trading and Consciousness
by Van K. Tharp, Ph.D.
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Many of our products and workshops are about helping people increase their level of consciousness. Why? Many people trade unconsciously, without knowing at even a shallow level what they are doing in the markets and why. This applies to the psychological parts of trading like beliefs, emotions, discipline, etc. as well as the “technical” aspects of trading (which I view as all psychological).
To begin the transformational process, simply become more aware, more conscious of what’s going on inside you. How do you find out about what’s going on inside? There are lots of books and courses available, but for big shifts, it requires action, not just reading. I have been evaluating self-development programs for many years to help me find the ones that work best. I became involved with Oneness because it has helped me and my Super Traders “wake up” — it is all about increasing awareness. You don’t have to get a Oneness blessing to become more conscious (but it really helps). There are many, many ways and I’ll give you a few in this article.
Notice Your Thoughts and Feelings
What are you thinking and feeling when you trade? You probably aren’t aware of these processes at all because they are totally unconscious — even though they run your entire life. You are programmed by your beliefs about your trading, the markets, the universe – but you probably have no idea of any of this. In some of our workshops, we play a trading simulation game where everyone gets the same trade results. The game strategy is all about position sizing your risk rather than figuring out what to buy or sell. I designed the games to “press emotional buttons” in order help people become conscious of their thoughts and feelings while they trade. All sorts of thoughts and emotions come up but most importantly, I guarantee the game generates the same thoughts and emotions that
also come up during your trading. Typically, these thoughts and emotions are not useful. In fact, they almost always impair your trading.
During the workshop games, I provide players with scoresheets that have blank spaces so they can record their thoughts and feelings for each trade. Even with constant encouragement from me, though, most people only write down something for about one out of every ten trades. Instead, they primarily focus on the action “outside” and they are not conscious of what’s going on “inside”. When people have this level of unconsciousness, they actually project their thoughts and feelings onto the world and believe all of that happens “out there.”
If you’d like to test your level of consciousness while simulating trading, just go to our homepage and download the trading game. You can play the first three levels of the game for free. While you play, write down your thoughts and feelings for each trade. Just notice how conscious you are of what you are thinking and feeling while you play the game. Also notice how much those thoughts and feelings match your experience of real trading.
Your Submodalities
Let’s look at another way that you are probably unconscious in an area that NLP calls submodalities. The way you make choices or judgments is through your submodalities. You are wired in a particular way to prefer certain sensory details over others and that’s how you make judgements. How conscious are you of that?
Want an example? Close your eyes and just think of a friendly dog for a moment before you read on. Now notice how you represent that dog to yourself in your mind. Did you see it? If so, was it in color or black and white? Was it right in front of you or was it some distance away? Or instead of seeing it, did you smell the dog, hear it, or feel its fur beneath your hand? Specifically, what did you see, hear, smell, or feel? Now close your eyes again and this time, think of a different dog — a dog of whom you are afraid. How did you represent the frightening dog in your mind? What were the differences between the way you imagined the friendly vs the scary dog? How conscious are you of those differences? If you’d like to see a great demonstration of how submodalities work, watch this 10 minute video.
You use your submodalities when you trade — but you probably have no idea about that. Here’s an example you might understand even if it does not apply to you. A lot of floor traders used the level of noise in the pit to monitor market action and to know if they should enter or exit positions. The noise level was an auditory input critical to their trading process. Many of them didn’t understand that, however, until they tried to trade from a computer monitor. Without any sound, they felt a little lost just using their visual sense to look at the screens. Making a trade was difficult based only on what they saw because their mental strategy for making trades required some kind of noise or sound before they would act. I used to recommend that my floor trader clients add some sort
of sound signal to their trading platform to tell them when they were supposed to enter or exit a trade. That auditory input was very helpful for many of them.
Observe Your Thoughts For A Month
Here is another way you can determine your level of consciousness — observe your thoughts throughout the day. My Super Traders do this exercise all day, every day for 30 days. Here are the simple instructions.
- Set a recurring alarm (through an app on your cellphone) to go off every 15 minutes.
- Every time you hear the alarm, write down in a journal (or a spreadsheet) what you were thinking.
That’s it. It’s not that hard at all. The real challenge is continuing the practice every 15 minutes for a whole month.
Once you have done this for a month, look back through all of your recorded entries. Do you see thoughts or patterns that dominate your thoughts? If so, how dominant were they? How conscious are you of those? Are you consciously choosing or directing your thinking or does your unconscious programming dominate your thinking?
If you find that automatic programming dominates your day, do you think you might also have programming that impacts your trading results? Probably. What would happen if you became more conscious and focused more of your attention on useful thoughts and beliefs? How would that affect your trading and your life? It could transform them completely.
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About the Author: Trading coach, and author, Dr. Van K. Tharp is widely recognized for his best-selling books and his 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 www.vantharp.com.
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Presented by Van Tharp
with co-presenter RJ Hixson
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September 15-17
Friday-Sunday
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Over the past 25 years, Van K. Tharp has modeled traders and the trading process, seeking answers to questions like, “Why do some traders make fortunes while others lose their nest egg?”
Van Tharp is a NLP modeler. To “model” effectively, you have to find out what behaviors and habits highly accomplished people have in common. Once you identify the common tasks that produce excellent results, you need to develop the beliefs, mental states and strategies that allow you to perform those tasks.
You do not trade the markets. You can only trade your beliefs about the markets.—Van K. Tharp
The Peak Performance workshop hones in on these common tasks and puts you in the driver's seat to take control of your trading success. During this three-day intensive course, you will come to understand how your mental states and beliefs play such a major role in your trading, and reality, your whole life.
Workshop Objectives:
- How great traders approach their craft and learn a daily procedure that resembles what they do.
- How you create your own experience in the market and how you are responsible for the results that you get.
- Become more aware of some of your own psychological issues that affect your performance as a trader/investor.
- Learn about expectancy, position sizing strategies and the power of big R-multiples through a simulation game. This game is also designed to help you observe your emotions in a setting in which only a small amount is at stake compared with what you will face in the market.
- Learn some of the variables that affect your emotions and how you can gain control over them.
- Learn to overcome self-sabotage through exercises done in the class.
- Students will get guidance on how to develop an ongoing program to work on themselves using the Super Trader Program as a model.
- Students will leave with a plan to make the maximum use of the workshop.
Note: This workshop is held in Cary, NC in September and again in October in London, England
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Exciting New Work from Van Tharp
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September 19-21
Tuesday-Thursday
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Systems thinking should not be considered one simple idea, but rather a combination of numerous subjects. For example, systems thinking is considered:
- An integrated body of knowledge or discipline—think the Scientific method and Sir Isaac Newton. Here, focus is on the objective, or that which can be observed.
- An idea involving your mindset, or way of looking beyond the basic trading aspects of tactics. Here, we are starting to look at beliefs.
- A recurring and iterative process, requiring various inputs. These might include changes in oneself, the markets, your results in comparison to your objectives, and more. The outputs include informed decision making about what systems to use, what position sizing strategies to employ, if and when discretion is utilized, and more.
Advanced systems thinking also involves mental maps, and how they are useful to guide you while in the trading process. Here, the subjective becomes as important as the objective.
However, even this has limits, as most standard systems thinking is mostly linear thinking,
I believe I have found a new, more robust way of thinking about systems…
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October 2017 LONDON, ENGLAND
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Presented by Van Tharp
with co-presenter RJ Hixson
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October 13-15
Friday-Sunday
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Peak Performance 101 is Dr. Tharp's core psychological workshop, and his most transformative course for over 25 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.
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Presented by RJ Hixson
and Van Tharp
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October 17-19
Tuesday-Thursday
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We'll teach you one of the real secrets of success — how to use all the system building blocks to design a trading system in such a way that it fits your personality and style of trading.. In the process of learning how to do this, you'll probably come up with dozens of winning systems that will work because they'll be based on criteria that fit your situation.
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October 21-23
Saturday-Monday
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Van shares years of knowledge about wealth concepts, wealth creation modeling, being wealthy inside, and the infinite wealth processes. Attend this workshop and completely reshape your attitudes toward money, work, paychecks, income, wealth, scarcity, and abundance. Your paradigm shifts in just three days will amaze you and release you from your current beliefs about wealth that have been running in your unconscious and holding you back.
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Presented by Gabriel Grammatidis
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November 10-12
Friday-Sunday
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Presented by Gabriel Grammatidis
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November 13-14
Monday-Tuesday
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Is Your Analysis Boxed In? Good for You…
by D.R. Barton Jr.
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Last Wednesday, I proclaimed for the entire world to see here on Tharp’s Thoughts weekly newsletter that the markets just didn’t want to go down yet. Then Thursday (8/10) gave us a down day of greater 1% for only the 13th time since February of 2016.
I didn’t actually receive any e-mails telling me that I was a bonehead. But I know some of you were thinking it…
But for most readers, one more big down day added to the few over the last 18 months wasn’t much of a surprise. You already knew that we’ve been in a grinding bull market since that Feb. 2016 double bottom. And with the minor exceptions modest pullback as a result of the Brexit vote and another one due to pre-presidential election jitters, the market has hardly pulled back at all. In fact, the market’s modus operandi for the last 18 months has been: push up, form a sideways box, push up, make another box. Lather, rinse, and repeat. Here’s what it looks like on a chart:
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I’ve written about these boxes frequently in this space, so we already know that the boxes containing sideways/directionless price movement give a touch of challenge to us traders.
Which brings us to why I mentioned the stinkin’ boxes in the first place.
Today we’ll use those boxes for something other than shouting about this “Do nothing market” (attach colorful language here if desired). Really, the big question is this: Does the big one-day drop and all the geopolitical rigmarole surrounding the bombastic leader of North Korea mean we should do anything different with our portfolio?
Strangely and wonderfully, the answers lie with our infamous boxes. Let me explain…
I’ve used our boxes to show price channels for congested trading but — they also show us important support and resistance areas. How those box support lines function will tell us whether we should react to North Korean news — or any other news, for that matter.
Small drops in the market (like last week) are to be expected — even in a grinding bull market. I’ll go so far as to say such drops are necessary — they are the market’s way of breathing out after a long breath in.
The key to distinguishing a small drop from something bigger is understanding how far down is too far. And that’s where our boxes can help. Let’s go to a shorter-term chart to see what I mean.
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In the chart, we can see that the down day from last Thursday took us back inside the May - July box. The bottom of that box will provide significant support, but is only 3.3% below the all-time high made on eight days ago (8/8).
What would it mean for your positions if the market traded down to the bottom of that box? Absolutely nothing. A 3.3% pullback is very routine.
How about a drop to test the support presented by the bottom of the bigger, February to May box? What would happen with a 6.9% pullback? There would be weeping and gnashing of teeth among those who have grown accustomed to the rhythms of the grinding bull market. But once again, a 6.9% drop would have almost no influence on our market outlook.
A close or two below the bottom of the February-to-May box, however . . .? Now that would get my attention. Why? Because that could set markets up to try for a full market correction. In technical analysis terms, a “correction” is defined as a 10% pullback. And below the bottom of the Dec-Jan box, things would get really interesting. I’ve marked that level on the chart above for reference. The only thing meaningful about a proper correction would be that it would clear the way to test the pre-election close.
Bottom Line
For me, there is absolutely no change in the tone of the market as long as the S&P cash index stays above the 2400-2410 range. Below that level, we’ll start looking at a more defensive posture if we challenge the bottom of the February to May Box.
Your thoughts and comments are always welcome - please send them to drbarton “at” vantharp.com
Great Trading,
D. R.
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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".
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NEW E-learning Course!
Forex Trading Systems: The Busted Breakout System
Click on the image below to watch a brief 1 minute video that hightlights this new course.
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Gabriel developed and refined his Busted Breakout system on the concept of trend-following while he was still enrolled in the Super Trader program.
The system has a high win rate (about 65%) and it takes advantage of a price pattern that happens again and again in the charts — breakout failures. The main advantage of this is that it benefits from running for other peoples’ stops. This is a unique edge of the system making the trade break-even early on. Watching 15-minute charts for 4-6 hours a day and trading only the biggest, most liquid currency pairs, the system finds easily more than 150 trades per year. The pattern works equally well on 5min, 60min and 240min charts so the trade opportunity per year can be much higher depending how you trade. Gabriel is confident that someone with the programming skills could turn the system into a well-performing automated trading system.
The three-day workshop cost is $3,995 but the cost of the home study program is $1,295. As a special introduction price for early responders you can get this new home study for just $995.
Plus, buy the home study now and if you decide to join us at the 3-day Forex Trading workshop in November (or for any Forex workshop in the future), you can deduct $600 off of your course payment for the workshop.
This is win-win for all! If you are among the group of clients who simply cannot come to one of our workshops this home study offers you the benefit of still gaining access to a robust and premium forex trading system. Gabriel has traded it himself in several timeframes for many years now offering a persistent edge in the market.
But, if you have already been considering attending the workshop this is a great way for you to get a full-steam head-start and walk through the workshop door already understanding the system well. You will then have the opportunity to ask Gabriel anything you need. And in addition, learn two new Forex trading systems. The three systems taught in the workshop all offer unique advantages. They complement each other giving you the opportunity to reap various stages in a trend.
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FREE Book!
We pay for the book, you just pay for shipping.
Read Van’s Latest Book —
TRADING BEYOND THE MATRIX
The Red Pill for Traders and Investors
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.
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Cary, NC Workshop Information
For a list of nearby hotels for our Cary, North Carolina locations,
click here.
Book your flight arriving to the Raleigh-Durham International Airport (RDU).
When traveling to a three-day course, it's best to arrive the evening before.
To help determine your arrival and departure times, see:
Questions? Click Here to Ask Van...
CONTACT US
This is a supplement to our subscription based newsletter, Tharp's Thoughts.
800-385-4486 * 919-466-0043 * Fax 919-466-0408
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