Tharp's Thoughts Weekly Newsletter

• Article: Understanding The Phenomenon of Projection by Van K. Tharp, Ph.D.
• Workshops: $700 Early Enrollment Discounts End TODAY on May Workshops
• Tip: Moving Average Cross: A Social Media Meme That Meant Nothing (Gasp!) by D.R. Barton, Jr..
• FREE BOOK!: Trading Beyond the Matrix

Oneness Awakening Weekend

June 4-5, 2016

Reach A Higher Level of Consciousness: A special event with Van Tharp

How could a higher level of consciousness help a trader?

Participating in the Oneness Awakening Course is an extraordinary opportunity to benefit from some of the most important journeys Dr. Tharp has taken to transform his life.

The Oneness Awakening Weekend course has become a fundamental tool in helping Dr. Tharp accomplish his mission of transformation and ultimately help each of his clients succeed.

Students who attend this two-day intensive workshop will walk away with tools to help them cultivate awareness in their life, and they will also experience an immediate and tangible shift in perception. As a result of this experience, traders can expect to naturally become more aware, positive, calm, and centered. By extension, they will also experience a shift in how they perceive the market. When a trader sees the market as it really is, rather than what they want to see, the act of trading becomes more relaxed and they become more confident and successful. Does this sound like the type of experience you want trading to be?

While this two-day course is not a technical course about trading, we have seen amazing results in the traders who experience the benefits of being more 'awake' and aware, calmer and more centered. And, the great thing about the concepts and experiences in this course: they have benefits that apply throughout students' lives, not just in their trading endeavors. Time and time again, traders tell us that their trading improved after taking this course, but also their personal lives as well!

The Role of This Course and The Super Trader Program

If you are interested in applying for admittance to the Super Trader Program, this June workshop will qualify you to submit your Super Trader Application before the rates for the Super Trader Program increase this summer.

To learn about the new structure of the Super Trader Program and price increase rates, read this article by Dr. Tharp, published in this newsletter a few weeks ago.

If you'd like to get more advice on if this workshop is right for you, we invite you to call or email Rebecca Price. Rebecca is a certified Oneness Trainer and co-teaches this course with Dr. Tharp.

Call 919-466-0043 or email info @ Vantharp.com .

Feature Article

Understanding The Phenomenon of Projection

by Van K. Tharp, Ph.D.

Click here to resolve formatting problems

A presupposition of my book Trading Beyond the Matrix is that the world we live in is all made up. We create it through our language, through our beliefs, and through our evaluations about things. What’s out there in the real world is just energy, vibrations. Our sensory systems pick up a small portion of those vibrations. For example, the cones in your eye pick up the light spectrum between 620 and 750 nm. You get a certain experience that through language you have learned to call “red.” But it is just your brain’s way of representing that frequency of light — it’s not the energy or vibration itself. This is why Alfred Korzybski made his famous statement, “The map is not the territory.” And in this simple example, red is not the same as the energy wavelength from 620 to 750 nm. It is just your brain’s way of coding it. In fact, when the cones transmit the signals for red to the occipital lobe (part of your brain having to do with vision), all that your brain “sees” at this point is a form. The form doesn’t become red until the signal then moves to your association cortex where the brain remembers, “oh, that’s the kind of signal I call red.” So you are really creating the experience of red and you just assume that the color red is out there in the world.

Now, language does other things too. For example, every language separates the energy spectrum out there into a subject, a predicate (verb), and an object. So we take all the energy out there and assume that there is a ME, interacting with things in some way. Through language, we label all of this.

The simple phrase “I see Mary” uses language to make a number of presuppositions. First, that you exist (and that you are probably a body). Second, that you — through your eyes — are engaged in a process of seeing. Notice that I just turned a process into a noun (seeing) and by doing so created what NLP calls a nominalization — an activity turned into a noun or a thing. Last, the statement also assumes that another person exists as a body out there and is called “Mary.”

Similarly, the market is a process that we turn into a thing, a noun. The market is a process of organized buying and selling but we like to look at charts and call that “the market”. If you were to look at a tick chart for some period of time, where a tick is defined as the minimum change in price, the price might not change for a while. What you’d see on a chart is a dot or line representing the price. The average person never sees tick data but instead they see bar charts (or candlestick charts). Each bar represents the price movement over a particular period of time (let’s say 5 minutes, 1 hour, 1 day, or 1 week). If you look at the underlying tick data, however, you will see that often, a bar chart does not accurately represent the movement of price. In fact, you are doing an injustice to the tick data to represent it by a bar chart, but that’s what most of us use to represent the market. Some people don’t think that a series of bars has enough information so they use moving averages, stochastics, MACD or any number of other studies to re-represent the market. Then, they form beliefs about the market which they trade. So you can probably begin to see why I say, “You don’t trade the market, you trade your beliefs about the market.”

Byron Katie on Naming

Author and teacher, Byron Katie expresses some of these ideas quite well in her book “A Thousand Names for Joy” with the following quote:

When the mind believes what it thinks, it names what cannot be named and tries to make it real through a name. It believes that its names are real, that there's a world out there separate from itself. That's an illusion. The whole world is projected. When you're shut down and frightened, the world seems hostile; when you love what is, everything in the world becomes the beloved. Inside and outside always match — they're reflections of each other. The world is the mirror image of your mind. (reference… it’s in the first section).

Byron Katie on the Solution (The Work)

Thoughts flow through your mind and then you tend to believe them, and that’s what creates suffering. As a result, Katie created a process that she terms “The Work.” You take each belief that seems to cause suffering through four questions and some turnaround questions.

The four questions are:

1. Is it true?
2. Can you absolutely know this is true? (This means if you were God and knew everything about everything, would it still be true? If you answer this question with a “yes” then you probably are not taking on God’s viewpoint.)
3. What happens when I have that belief?
4. Who would I be without the belief?

And then you take the belief through three turnarounds, which are:

1. You apply the belief to yourself.
2. You apply the belief to the other person.
3. You apply the opposite of the belief.

Now let’s say that you are angry at your spouse because she did X. In this example I will use the terms she and “wife” but you could just as easily use he and husband. So a basic belief that you might want to examine might be “I’m angry at my wife because she lied to me.” So let’s take this situation through the process.

1. Is it true? You’d probably say, “Yes, I’m pretty sure she did lie to me.”

2. Can you absolutely know it’s true? Well I’m not sure of her intention, so perhaps it’s not completely true or at least “lying” would have a slightly different meaning.

3. What happens when I have that belief, “I’m angry at my spouse because she lied to me.”
1. I feel tense inside
2. I don’t trust her any more.
3. I think our relationship is weakening.

4. Who would you be without that belief?
1. I’d feel more at one with her.
2. I’d trust her more.
3. She’d be my best friend.

That’s an example of applying the four questions so now let’s do the turnarounds. I love The Work because the questions and especially the turnarounds give you a totally new perspective on a belief and allow you to see that it’s all you making it up. The turnarounds, however, seem to confuse a lot of people so I’m going to explore the turnarounds with a slightly different viewpoint.

Two Kinds of Turn Arounds, Type One: Emotions

First, if there is an emotion involved, look at the emotion as a separate sort of process. According to A Course In Miracles (ACIM) we are a creation of God (with all the creative powers of God), but at some point we had the thought, “What if I am separate from God?” And having the powers of God, we were able to create a separate illusory reality in which we are separate from God. Ask yourself, for example, “Do you believe you are separate from God?” Most people will answer yes to that. Some people might think it’s blasphemous to have even a thought that we are one with God. And thus, the illusion. I’ve already discussed how that might come about through our senses and through changing our brains to speak a language that sorts the world of energy into subjects, objects, or predicates and even turns predicates into nouns.

Anyway, getting back to the emotional topic. ACIM states that emotions like anger, depression, anxiety all stem from the primal fear of being separate from God. We tend to mask the fear by projecting in out into the world and thinking that the causation is something else, such as a person or an object we see. Thus, we get something like SHE MAKES ME ANGRY. Or MARKET MAKERS MAKE ME SO ANGRY WHEN THEY XXXX.

Now, if you do the turnaround on the emotional part of the beliefs the seems to be causing you stress, then you begin to see that it is all you.

So let’s look at our example. I’m angry at my spouse… and we’ll just work on this part.

First, turn it to the opposite which is I’m happy with my spouse and we find three examples.

1. I’m happy with her because I know she loves me.
2. I’m happy with her because if she did lie to me it was probably to protect me from getting upset, so her intention was good.
3. I’m happy with her because she devotes herself to taking care of me.

(If you can find one, you can find many)

Second, let’s turn it around to the other. In other words, my spouse is angry at me and we find three examples again.

1. She’s angry at me because I’m upset at her for no good reason and she doesn’t feel it is justified.
2. She’s angry at me because I sometimes lie to her to protect her.
3. She’s angry at me because I’m judging her, which makes my love for her dependent upon her behavior.

Third, let’s turn it around to myself. In other words, “I’m angry at myself because….”

1. I’m angry at myself because my love is not unconditional. I don’t seem to be able to accept her just as she is and love her no matter what.
2. I’m angry at myself for believing my thoughts about her which may or may not even be true.
3. I’m angry at myself for forgetting to be happy for no reason.

So when you do that exercise, you begin to realize that the emotion is all you projecting your issues into another person. And if you do the exercise enough times, then you really begin to get that projection is the way you and most people operate in the world. It’s all projected. You invent the Matrix.

Two Kinds of Turn Arounds, Type Two: Beliefs Out of Context

Now let’s look at the other type of belief, the non-emotional part. In the case of our example, it’s “because she lied to me.” Or worse, yet, “because she’s a liar.”

The first version of the belief involves taking something that happened and giving it a lot of real significance. The second version is extreme and labels the person according to a way that they behaved in the past — as if that’s who they are. This is what Korzybski calls over-identification and we talked about this in a recent article, Why Science Evolves and Humanity Stagnates, in the context of recent events in North Carolina.

Any belief has some context (often a very narrow one) for which the belief is true or useful. But when applied to all contexts, no belief is ever completely true. For example, the belief “if I fall 100 feet I will probably die” is useful under conditions in which there is gravity but it’s not useful under conditions where gravity is practically absent. The problem is that people want to be right and they regularly apply beliefs universally. Beliefs are just made up and probably only work (are useful) in the same context. So if you can do the turnarounds on the non-emotional beliefs part of any statement, then you will see that it is probably taken out of context and made much more significant than it really is.

So let’s apply the three turnarounds to the belief: She lied to me.

The first turnaround is to turn it around to the opposite.

1. She was honest with me (and find three examples).
   1. She was honest with me with her intentions as she didn’t want to hurt me.
   2. She is honest with me in almost every situation I can remember.
   3. She is honest with me when she says, “I love you.” The second turnaround is to apply it to the other.

2. I lied to her (and we’ll find three examples).
1. I lied to her by not expressing how upset I was when I thought she lied to me.
2. I lied to her the other day when I told her X.
3. I lied to her when I kept it inside and didn’t express it for an entire day. And the third turnaround is to apply it to yourself.

3. I lied to myself:
1. I lied to myself when I believed my thoughts about her being a liar.
2. I lied to myself when I continually believed my thoughts were actually her and applied it to her for the rest of the day. I’m not seeing God inside him/her.
3. I lie to myself all the time when I cheat on my diet (or anything else).
4. I lie to myself much more than I lie to other people. (probably applies to most people)

If I suddenly equate the behavior I’m judging as bad as actually being inherent to her, then I’m really going overboard. She’s a liar. What I’m really saying then is that everything she does is a lie, that I cannot trust her at all. That she constantly lies. This is what starts wars. It all begins inside of you.

If you’d like an example of this on a large-scale, I invite you to read the feature article in our April 27th newsletter. There, we explored this topic in the context of the thought “North Carolina is discriminatory” inspired, in part, by the hot-button topic of HB2 (aka The Bathroom Bill). This thought sets an individual’s mind to believe that everything about North Carolina is discriminatory, and can even be taken as far as believing that the state must be somehow punished.

The Same Belief in a Different Context

Example 2: Let’s take another example. Let’s say you are wondering when you can escape from your marriage and you come up with a similar belief, “I’m angry with my spouse because she lied to me.” So let’s look at the turnarounds in this particular context:

First, turn it to the opposite, which is I’m happy with my spouse because … and we’ll find three examples.

1. I’m happy with her because she’s given me an opportunity see to my part in the mess our marriage has turned in to.
2. I’m happy with her because she’s actually being honest with me in showing what she really felt at that time through her behavior. Perhaps this is a sign that I should move on, but only once I’ve cleared up my part in our relationship.
3. I’m happy with her because she gives me a chance to see God in someone that I have huge filters against and thus find it difficult.

Again, if you can find one, you can find many, even in this totally different context.

Second, let’s turn it around to the other. In other words, “My spouse is angry at me because …”

1. She’s angry at me because I’ve been cruel to her in many ways and not treated her like a treasure in my life.
2. She’s angry at me because I sometimes lie to her to protect myself.
3. She’s angry at me because I’m judging her, which makes my love for her conditional upon her behavior. (This one fit both contexts).

Third, let’s turn it around to myself. In other words, “I’m angry at myself because….”

1. I’m angry at myself because my love for her was not unconditional. I don’t seem to be able to accept her just as she is and love her no matter what. I can’t see God in her even though God is in everyone.
2. I’m angry at myself for believing my thoughts about her which may or may not even be true.
3. I’m angry at myself for forgetting to be happy for no reason.

All of these were the same as the other context, so I’ve added a fourth.

4. I’m angry at me because I can now see my own part in destroying this marriage.

So when you do an exercise like that you begin to realize that the emotion is all you projecting your issues onto another person. And if you do the exercise enough times, then you really begin to get that projection is the way you and most people operate in the world. It’s all projected.

The Second Part, New Context:

Let’s apply the three turnarounds to the second part of the belief in a new context — of a marriage about to fall apart: She lied to me.

The first turnaround is to turn it around to the opposite.

1. She was honest with me (and find three examples).
1. She was honest with me in that she really is expressing how she is.
2. She was honest with me in saying that she was going out (just not with whom).
3. She is honest with me in probably 80% of the situations that I can think of.

The second turnaround is to apply the belief to the other.

2. I lied to her (and we’ll find three examples).
1. I lied to her by not expressing how upset I was when I thought she lied to me.
2. I lied to her when I don’t tell her I want out of the marriage.
3. I lied to her when I don’t express my part in destroying this marriage and assume it is all her.

And the third turnaround is to apply it to yourself.

3. I lied to myself:
1. I lied to myself when I believed my thoughts about her being a liar: that that’s her essence. She’s really not a liar. Probably more than 80% of what she says is true.
2. I lied to myself all the time when I cheated on my diet (or anything else).
3. I (like most people) lie to myself much more than I do to other people

Conclusion:

If you really want to go within, notice your thoughts and become aware of contexts, then do an exercise like The Work to explore a belief, it is not so difficult. Notice how I’ve been able to show projection in two different contexts: being upset at a spouse for a white lie in a functioning marriage and being upset at a spouse for a blatant lie in a dysfunctional marriage. Hopefully, these two examples begin to open you up to how you produce suffering in yourself. We have a number of exercises in the Super Trader Program to help candidates really get such concepts into their neurology. And we’ll be discussing these concepts extensively in our Happiness Workshop, (Peak Performance 203), next week. My goal for that workshop is that everyone leaves much happier and for that new state of happiness to be relatively permanent. If you have questions about this workshop, or others, please feel free to contact us at: [email protected].

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.

Workshops

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. In the example given above, if you had assets that gave you $3,000 per month in passive income, you could last forever. You would, therefore, be infinitely rich. For example, if you had $300,000 and you got a 1% return on your money each month from say dividends, then you’d be infinitely wealthy.

There are four basic ways to achieve infinite wealth by this definition:

• First, reduce your expenses. And even if you are poor, taxes are probably your biggest expense, so you must reduce your taxes. Most traders don't know how to deduct all of their expenses, yet you can. And we’ll show you how in this course.

• Second, increase your assets. This means pay yourself first. Allow your assets to grow so that your money is working for you instead of you working for money.

• Third, increase the passive income you receive from your assets. The last concept is so simple and so few people think about it. Yet it is incredibly powerful. By the way, I don’t define passive income the way most people do because all passive income requires some work to protect yourself and make sure your income is safe. As a result, I define passive income as any income you can make by working 2 hours or less each day. So, if you could get up and make 2R each day as a day trader by trading for the first 90 minutes of that day, that would qualify and you can learn about how that's done in our technical workshops.

• Fourth, once you’ve achieved infinite wealth, it is then very easy to raise your lifestyle and bring luxury into your life. Why? Because, you are now on the fast track instead of being in the middle of the rat race. Learn more about this pivotal workshop...

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.

Watch this 9 minute video for a quick overview of this facinating new course.

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.

They both mechanical systems and adaptive systems work well, they just work differently. Mechanical rules are more easily understood, are easier to program, and they are easier to execute. Mechanical rule-based systems typically do not adjust to changing market conditions and therefore are out of the market at times when the condition criteria are unmet. These are the kind of systems detailed in the Swing Trading Elearning Course.

Adaptive rules require a better understanding by the trader of price action, of self and of the market. These systems can also take more time to monitor and to execute. Learn More...

Click Here To Learn More

Combo Discounts available for all back-to-back workshops!

See our workshop page for details.

Trading Tip

Moving Average Cross:
A Social Media Meme That Meant Nothing (Gasp!)

by D. R. Barton, Jr.

Click here to resolve formatting problems

On Monday of this week, a chart touting a bearish formation hit critical social media mass and started to get picked up by bloggers and media outlets. People were calling it “ominous”, a “plunge predictor”, etc. MarketWatch started tweeting about it with the headline “Get your affairs in order because this rare technical signal is flashing red”. Friends and colleagues started sending it to me asking for my opinion. So I started digging a little deeper to see what I could find.

The chart showed weekly bars on the S&P 500 and just two indicators — a 50-week moving average and a 100-week moving average. The news was about the 50 dropping below the 100 moving average for the first time since... you probably guessed it... 2008. Here’s the chart:

The chart originated on the Northman Trader blog and it quickly gained popularity on many sites.

Here are some reasons this crossover chart got such a huge following so quickly:

• People love simplicity – the chart has very few moving parts.
• The 50 week / 100 week moving average cross did, in fact, happen before the last two big moves down.
• This feeds the needs of the “perma-bear” community — those who expect the market to collapse and see every possible scenario through that filter.
• This simple pair of moving averages over the past 15 years seems to explain everything!

There are problems though with these reasons. They suffer from many psychological and statistical biases that Van and I often talk about in these pages. Astute readers of this newsletter have probably already seen the problems with this “analysis” and the conclusions drawn:

• There are only two prior data points.
• We don’t know what happened when these moving averages crossed in previous cases.
• In any big market drop, faster moving averages mathematically HAVE TO drop below slower moving averages (unless the longer-term/slower averages are insanely long-term)

So I set out to research what happened with this particular set of moving average cross-overs in the past (the period before the chart) and found that one of the technical analysts that I follow and respect posted his findings on Twitter. Ryan Detrick of LPL Financial provides us with some numbers that I have parsed below.

• First of all, the previous three crosses of the 50 week going below the 100 week all occurred in the 1980s and were followed by monstrous moves — to the upside.
• Going all the back to World War II, we find that there were 15 times that the 50 week moving average crossed below the 100 week moving average (not including the current one). The average move one year after that crossover? Positive (up) 23.2%.

As usual, analysis techniques that look too simple to be believed — probably are!

The Bottom Line?

When you see the latest hot idea (which is usually simplistic) passing your Twitter feed or your other social media outlet, don’t get drawn in.

The recent 50-week moving average crossing below the 100-week moving average is something to be IGNORED.

Please send your thoughts and comments to drbarton “at” vantharp.com — I always enjoy hearing from you.

Great Trading,
D. R.

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".

Free Book

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!

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...

Matrix Contest

Enter the Matrix Contest
for a chance to win a free workshop!

We want to hear about the one most profound insight that you got from reading Van's new book, Trading Beyond the Matrix, and how it has impacted your life. If you would like to enter, send an email to [email protected].

If you haven't purchased Trading Beyond the Matrix yet, click here.

For more information about the contest, click here.

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