Tharp's Thoughts Weekly Newsletter (View On-Line)

• Workshops Early Enrollment Discount Expires Today!
• Article Van Tharp's Journey Down the Rabbit Hole by Van K. Tharp Ph.D.
• Trading Education Van suggests this as your first step toward success
• Trading Tip One Not-So-Big Trade or a Data Delay? by D.R. Barton, Jr.
• Mail Bag Comments on Dr. Tharp's Article from Last Week

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Feature Article

Van Tharp's Journey Down the Rabbit Hole

by Van K. Tharp, Ph.D.

We only recently introduced the Happiness workshop (Peak 203) as a new psychological course in the spring of this year, but we are already holding another new psychological workshop next month.  Before I get into that, though, let’s talk about transformation.

At the Systems Development Workshop last weekend, about half of the attendees said that they had already received some major benefit from their association with the Van Tharp Institute (e.g., Tharp Think saved them from blowing up their account).  These basics are so important to trading survival that we are likely to schedule one-day workshops on Tharp Think regularly in the future.

I am so glad that the principles we promote have helped so many traders.  The comments that are particularly meaningful to me come from people who say that our workshops and home study courses (Peak Performance) have completely changed their lives.  Hearing that kind of feedback inspires me and my staff.  I don’t do this work for the money; I do it because of how I feel when you tell me how much of an impact we’ve had on your life.  My mission has always been to help people transform themselves through a financial metaphor

I’m almost at retirement age, but as far as I’m concerned I’m already retired.  I do what I love to do and my staff handles those aspects of the business that I don’t like to do.  Thus, I will continue to do what I do for many years.  

In addition to creating and teaching the workshops for my company, I’m forever looking for the next step that will help people more.  I believe that I can’t help others transform any further than I’ve managed to transform myself.  To that end, the last 30 years of my life has been a transformational journey.  Let me detail some steps of that journey for you.

I have a Ph.D. in psychology; however, I don’t consider much of that education to have been transformational but it at least it gave me a baseline.

I spent four years going through the book A Course in Miracles (I’m doing it again now but with a very different perspective).  This course had a major effect on me when I first completed it, although I really only understood the surface aspect of it.  When I had finished, I had gone from psychologically dead to having this business that was about helping others through a financial metaphor.  I didn’t know anything about running a business, but somehow I’ve managed to do this full time for about 35 years and overcame many bumps in the road.

While I was doing A Course in Miracles, I learned about NLP as the science of modeling.  I completed an NLP practitioner’s course, an NLP master practitioner’s course, an NLP associate trainer’s course, a modeling course (the most valuable), and many other NLP courses.  Through my NLP training, I learned many transformational techniques, and most importantly, the Science of Modeling.

In addition, I met a woman who used to be a Scientology Practitioner and had developed her own “improved” process for helping people through their issues.  I did days and days of clearing work with her and actually went as far as she could take me.  I’d reached the spiritual-oneness level, but I didn’t feel that much different.

I participated in the Lifespring Courses.  I thought the Basic and Advanced Courses were quite inspirational.  They also had a leadership course, but that seemed to be all about enrolling people in their seminars.  It was quite different from the original Lifespring leadership course, which was like an outward-bound course.  I didn’t finish that leadership course because I didn’t approve of what they were doing.  But I read some of their recommended books and attended one weekend of the leadership course with the understanding that the course’s subject matter would be based upon one of the books I read; it wasn’t.  It was still about enrolling people in their workshops.  As a result, I dropped out and created the course I wanted to attend, which grew into the first version of Peak 202.  Over the years, however, that course has evolved considerably from its start.

I learned numerous transformational techniques and to execute each of them correctly, I usually had to attend a workshop of some sort.  I even took a Deepak Chopra meditation course.

In addition, I attended the nine-day Avatar course twice, as well as the 11-day Avatar Master’s course. I would have considered teaching it, but I was told I could only teach it under the supervision of a certified Avatar Master, so I elected not to teach it. Even still, I went on to take the 13-day Avatar Wizards course on two separate occasions.

Many years ago, I met Libby Adams at an NLP master practitioner seminar.  Eight years later, I ran into her three times in one year.  Now do you think running into someone like that is pure coincidence?  I don’t.  I learned that she had developed a transformational meditation (tfm) technique.  I did several exercises with her and subsequently integrated her methods into the Peak 202 workshop.  I’ve taken her 28-day TFM Course twice now and we’ve incorporated it into the Super Trader program.

Of the additional transformational work I’ve completed, Byron Katie’s 13-day School for the Work has been especially significant to me.  That was an amazing course that parallels the teachings in A Course in Miracles: everything you see is a projection of what’s in your mind and thus is “not real.”

As I said before, I continue to work on my transformation because I think the more I transform myself, the more I can help you transform.  Over the years I have found that transformational techniques with a strong spiritual component are the ones that tend to be life changing.  Some of the other non-spiritual techniques might change your behavior but not your life.

My most significant transformational experience was a journey that started in January 2008 when I got a hands-on-my-head blessing at a local Unity church.  After that blessing I felt amazingly peaceful for a while. Then, I wanted more.  I got a second blessing a few months later at the blessing giver’s home and learned that she actually was channeling divine energy into me.  This energy is designed to slow down the activity of the temporal and parietal lobes of the brain (i.e., temporal and spatial activity) and speed up the activity of the frontal lobe.  It is this brain change that will help people “wake up.”

So what do I mean by wake up?  The best way to illustrate it is through the model David Hawkins, M.D., Ph.D. discusses in his book Power Versus Force.  Hawkins developed this model for his Ph.D. dissertation in psychology.  Hawkins postulates that human consciousness can be measured on a log scale from zero to 1,000.  Hawkins considered levels of consciousness below 200 to be self-destructive while 1,000 was the level attained by Jesus, Buddha and other great masters over the years.  The log nature of the scale offers exponentially more energy at the higher levels.  Hawkins said that Gandhi, a single man whose consciousness was at about 700, was able to defeat the British Army, whose consciousness was about 175, nonviolently.  While the British army relied on force, Gandhi possessed power.

Hawkins said that love comes into your life at a consciousness level of 500 and that enlightenment starts at around 600.  Obviously, there are many levels of enlightenment if consciousness can go to 1,000. 

For most of recorded history, the consciousness of mankind has been below 200 (self-destructive) and it only since the late 1980s that things have started to change.  Now I don’t know if Hawkins’s model is real, but it is useful to explain what happens to traders as they work on their own psychological transformation.  The more transformation they get, the more they move into power that will allow them to create and shape their own destiny and results.  They become more awake. 

Being “awake” also reminds me of the movie, The Matrix. When your consciousness rates 350 or below, you are locked into an illusion—the Matrix.  The illusion is shaped by your beliefs but you don’t realize it.  However, as you begin to realize it, you can adopt more and more useful beliefs that allow you to function in the matrix at a very high level.  And that’s probably what happens at the first stages of transformation to traders.  They become more and more able to control the outcome of their trading by doing such things as adopting “Tharp Think” beliefs.

Towards the end of the movie, Neo begins to realize that the Matrix itself is a total illusion.  He had been programming himself to work more effectively merely within the illusions.  That’s good for traders who understand the “Matrix” metaphor because they adopt useful beliefs and can function more effectively within the “Trading Matrix.”  Neo comes to realize, however, that he can step out of the Matrix and function at a totally different level.  Suddenly, he’s way beyond anything else in the Matrix.  For traders, I refer to this as Trading in the Now.  This probably begins to happen, speaking in terms of Hawkins’s model, when one begins to glimpse consciousness at the level of 600 or higher.

With that perspective in mind, I’ll tell you more about my experience with the blessings.  During my second blessing a couple of years back, I learned that people used to have to go to India for 42 days to become a blessing giver.  Later, the process was reduced to a21-day training.  I said “when can I go?”  Well, I wasn’t able to go until July and by that time, becoming a blessing giver had been reduced to a 7-day course (for English speaking people) in Fiji.  For more insight into the initial impact that this course had on me, see the two articles I wrote in August 2008: Understanding Your Core Issues Part 1 and Part 2.  That course has had more impact on my life than anything else I’ve ever done, and it is still growing in significance.  Those two articles only begin to scratch the surface of what has happened.

I now give blessings on the last day of most of my psychology workshops and the impact is quite profound.  One of my Super Traders, a Vietnamese woman who lives in Toronto, went into a very profound state after one blessing more than a year ago.  We talked about her experience and I said, “Why don’t you trade from that state?”  She did and became one of the first Super Traders to trade in the now—with some amazing results.  I’ve since heard many stories about the impact of the blessings on people lives after receiving blessings from me.

In late 2009, the seven-day blessing giver course evolved into a two-day course given by local Oneness Trainers.  And then in March 2010, the founders, Amma-Bhagavan, announced that it was now time to start “waking up” the blessing givers.  This meant that the blessing you received to become a blessing giver was a special Mukthi Deeksha blessing that started you on the awakening process. 

In March of 2010, I sponsored a Oneness Course through the Van Tharp Institute right after our initial Peak 203 workshop that was open to the public.  That course included the Mukthi Deeksha.  Three staff members attended that course along with my two family members and about six of my Super Traders.  In all I think about 18 people attended.  And perhaps because it followed the Peak 101 and Peak 203 workshops, that two-day course was a mind blowing experience for everyone.

Because everything I’ve done in connection with Oneness has had a major and quick impact on my life, I went to India in September to attend the Oneness Trainer’s course (which, interestingly enough, one of my Super Traders has already attended). While it’s too recent to determine the full impact of that course on my life (I’m already seeing signs of it), I continue to believe that over the next year or so, it will be tremendous. 

What does “waking up” mean according to Oneness?  The first sign of permanent awakening is when things that used to give you charge (i.e., produce strong emotions or keep you thinking about it) only produce a charge that lasts 30 minutes or less.  This doesn’t mean that you forget about it after 15 minutes but then see the person that produced the charge several days later and still have it.  It means that all charge is permanently gone in 30 minutes or less.  That’s the starting point. 

As you continue to wake up, the charge period decreases until it is less than a minute.  And finally the charge is totally gone.  Nothing produces charge in you anymore.  Nothing!

It is then that you begin to feel a sense of Oneness with other people.  Perhaps it’s only fleeting, but it happens: first, oneness with one person, then another, and then with many people.

Next you start to feel one with the animals, the trees, and everything in nature.  And finally, you experience total oneness.  I’m not sure where Oneness with the Market comes in (i.e., trading in the now), but it’s probably around the same time that charge begins to disappear. 

If you’d like to understand what it is like to live in that state, read Byron Katie’s book A Thousand Names for Joy.  When I experienced Katie in person, it was very clear to me that she would rate very high on Hawkins’s consciousness scale.  You can start to understand that when you read her book.

When I returned from the Oneness Training in early October, I wasn’t sure whether I wanted to make Oneness part of the Van Tharp Institute curriculum. I had previously scheduled a two-day Oneness workshop for the Super Traders in December and I’d planned to present a Trading in the Now workshop after that.  Now, I have decided that I will incorporate those two courses into a single four-day workshop and offer it to anyone who wants to learn the method.  We’re going to call this workshop Peak 201: Trading in The Now, and we’ll offer it in the spring. 

I have also decided to put on a two-day Oneness Awakening Course on November 13th and 14th after the Peak 203 workshop.  There’s some question as to where that course will be held at the moment, but it will be either very affordable or free.  If we wind up hosting the workshop at our facilities, anyone attending Peak 203 can attend the course for free.  If we have to host the course somewhere else, you’ll pay an enrollment fee, but even that has been reduced from $225 down to $35.   We really want people to attend.

If you want to accelerate your transformation, consider this course.  I really encourage you to attend either in November or sometime in the future.  I wouldn’t offer it if I didn’t think it would have a major impact on your life.  I usually don’t offer courses for free because people seldom appreciate what they get for free, but I think most people should take this course.  So take it now while we are practically giving it away. Email [email protected] to let us know you are interested and we'll notify you when we know the location.

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 at www.iitm.com.  

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Trading Tip

by D.R. Barton, Jr.

Once again, the private sector trumps the public sector.

Nanex, a four person data shop in the Midwest part of the US has been getting lots of press lately—and for good reason.  Nanex conducted their own data crunching research of the May 6 flash crash and their insightful conclusions really make the SEC/CFTC 104-page report look. . . uh, well, we’ll just say “less than rigorous.”

Before we jump into the report, though, let’s be clear here that Nanex has a point of view to promote.  First, to help clear their name, Waddell & Reed hired Nanex and gave them all of the data for the algorithmic trade execution from that afternoon.  Second, the head of Nanex coined the phrase “quote-stuffing” according to Reuters, and certainly would like to justify that point of view. 

In short, quote-stuffing is the alleged practice used by high-frequency traders to flood the market with a large enough quantity of orders that slow down the central quote system.  These circumstances present an advantage for those parties who have access to subsets of the central quote system data.

Regardless, I believe that Nanex has the data to demonstrate and defend their theory as the cause of the flash crash.  Meanwhile, the SEC/CFTC official explanation pales in data rigor and detail.  Let’s see why.

Some Pricing Mechanics

As I read through Nanex’s report, one characteristic stood out as a major flash crash contributing factor—loss of liquidity.

At any given time, buyers present bids and sellers present offers for traded instruments.  Most times buyers and sellers dance together in relative balance.  When someone wants to sell, they can either offer at the current “best offer” and wait for a buyer willing to pay that price or they can “hit the bid,” meaning that they take the best available price that is bid.

In simple terms, a seller joining the best offer adds liquidity to the market, while a seller who “hits the bid” (or will sell at the best currently offered price) removes or uses up current liquidity. 

When sales orders hit the bids with such volume, rapidity, and force (as on May 6), they start overwhelming available liquidity. 

With this background, we can evaluate now what happened after Waddell & Reed started executing their notorious trade on the afternoon of May 6th.  Nanex analyzed the data that Waddell & Reed supplied, and they were able to match Waddell & Reed’s data exactly with CME market data. 

One Order or . . . ?

Nanex’s report goes into millisecond level detail for trades in the critical ten-minute period of the flash crash.  Their analysis provides a very clear picture of serious price quote delays between 2:42 and 2:52 PM EDT.  The data delays were the result of irresponsible selling by a firm (or firms) that had bought the Waddell & Reed e-Mini tranche.

The massive sales hitting the bids seriously delayed the price quoting systems (computers and networks) simultaneously for multiple markets.  Many willing buyers didn’t trust the rapidly moving and erratic price quote data, slowed or stopped their buying and fueled the liquidity contraction.  This sequence of rapid events dragged prices down in a hurry.

“Our analysis of the Waddell & Reed e-Mini trades led us to an unexpected break-through. By process of elimination, and with the SEC report for context, we finally have a crystal clear understanding what caused the May 6, 2010 flash crash.

"First of all, the Waddell & Reed trades were not the cause, nor the trigger. The algorithm was very well behaved; it was careful not to impact the market by selling at the bid, for example. And when prices moved down sharply, it would stop completely.

"The buyer of those contracts, however, was not so careful when it came to selling what they had accumulated. Rather than making sure the sale would not impact the market, they did quite the opposite: they slammed the market with 2,000 or more contracts as fast as they could. The sale was so furious, it would often clear out the entire 10 levels of depth before the offer price could adjust downward. As time passed, the aggressiveness only increased, with these violent selling events occurring more often, until finally the e-Mini circuit breaker kicked in and paused trading for 5 seconds, ending the market slide.”

Nanex lacks the needed data to identify the seller(s) mentioned—Nanex can only detail what happened by time and trade.  Perhaps for PR effect or perhaps for more valid reasons, Nanex went so far as to ask if the unusual selling on May 6 might have been coordinated.  They imply that quote-stuffing may already be an effective high-frequency trading strategy.  

Next week we’ll dig into some of the details of the consolidated quote system. The interlinking of the futures market with the stock and options world contributed to the systemic data delays on May 6. 

I’d love to hear your thoughts and feedback on this series or about trading and investing in general at drbarton “at” iitm.com.  Until next week…

Great Trading,
D. R.

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 guest on both Report on Business TV, and WTOP News Radio in Washington, D.C., and has been a guest on Bloomberg Radio. His articles have appeared on SmartMoney.com and Financial Advisor magazine. You may contact D.R. at "drbarton" at "iitm.com".

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Mailbag

Comments on Dr. Tharp's Article from Last Week

Yesterday I got a good laugh out of your India story. You painted a great picture. This morning I saw an interview with a female journalist on Bloomberg.com with Jim Rogers, and your story opened my eyes to what goes on with the questions and how they are asked. I was carefully watching the reaction on Jim Rogers and it made the interview quite interesting.

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I don't know when I laughed and cringed so hard and at the same time as I did reading your article on the Indian television interview. You summed her up wonderfully—a wind-up toy!

I agree totally 100% with your prognosis that predicting the market has nothing to do with making money and you don't trade the markets..you trade your beliefs. Unfortunately, I don't see the day when you will have anything more than a relative few followers like myself. It took me 20 years of trading to see the light so what hope has the general public got? Keep up the good work Van!

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I really enjoyed your article on the Indian reporter. It was funny, honest and enlightening and reminded me why being so independent of Main Street is one of my great trading edges.

Hats off to you for giving her the benefit of the doubt. I would have walked out after about 5 minutes of realizing her true agenda!!

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Jessie Livermore's statement that "Everyone wants to be told what to do exactly" is very true even after 100 years. That is what she was expecting from you. I hope she learns from your answers and becomes a better financial journalist.

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I knew you were going to be totally on point when you asked her about her education. If her persistent line of general questioning is any indication, particularly after all your explanation to her that her questions were basically meaningless, it was not a very valuable education and certainly she did not recognize the very valuable education she was getting on the spot that she could have turned into an opportunity for her with her audience and thus her career. Wind-up toy indeed.

Everything that we do here at the Van Tharp Institute is focused around helping you improve as a trader and investor. Therefore, we love to get your feedback, both positive and negative!

Feel free to click below to leave us any comments so that we can serve you better. Or, send Van a question that you would like for him to answer.

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