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Tharp's Thoughts
Weekly Newsletter
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Feature: The One Trading Tool I Use on EVERY Chart,
By D.R. Barton, Jr.
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Workshops: Early Enrollment Discount Ends on Two March Workshops
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Mailbag: I Had No Idea How Much Stress I Was Carrying
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Tip: New Quiz Series, By Dr. Ken Long
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$700 Early Enrollment Discount ENDS TODAY!
Grab Your Spot for
How To Develop Winning Trading Systems
and Bear Necessities!
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How to Develop Winning Trading Systems That Fit You Workshop
March 3-5
Our job in this workshop is to teach you what you need to know to develop your own system. The material you will learn is not market or time-frame specific. So whether you trade stocks, futures, currencies, gold, etc., or whether you place 50 trades per day or 50 trades per year, you will learn all of the components that work in any system.
Also, even if you have attended a VTI system specific workshop (Forex, Swing) or taken a system specific home study workshop, you will still benefit greatly from studying nonspecific trading systems in-depth. How? For systems taught at Van Tharp Institute workshops, you will have already learned the supporting beliefs for the system, reasonable objectives it could achieve, and the various rules. Understanding trading systems in-depth, however, will allow you to more easily make improvements to the systems so they fit you better or they perform better for you — or both. The change might be as simple as modifying an exit rule or as complex as adjusting it to function in a different market type in a different time frame with a different instrument. Making
those kinds of alterations and being successful is much harder to do if you lack a strong understanding about each part of a system (a sub-system in itself), how those parts interact, and how the whole system of parts working together generates the particular kind of R multiple distribution.
Learn six reasons why you'll want to attend this workshop and more. Click here....
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Bear Necessities Workshop
March 7-9
Bear markets have wiped out many individual and even many professional traders. Rather than just hoping to survive a bear, however, plan properly to thrive during this market type. Though this workshop you will create a professional plan that will fit you and your objectives. In fact, after you invest your time and effort in the workshop in Cary, you can walk away with a fantastic start on a thorough bear market plan. Follow through with this work when you get back home and you will have money making systems ready to trade in bear markets — as well as in some other market types too. You will also have many ideas to spur further research and refinement. This type of
planning will allow you to meet the next bear with confidence rather than feeling like a deer caught in the headlights.
Major bear markets come only once in a while but “lesser” down moves can be found almost anytime — including during bull markets. Just by being prepared you can take advantage of the huge opportunities that falling markets present.
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March 18-19, with Dr. Van Tharp and Rebecca Price
Participating in the Oneness Awakening Course is an extraordinary opportunity to benefit from some of the important journeys Dr. Tharp has taken to transform his life.
The course has become a fundamental tool in Dr. Tharp's mission to help his clients succeed. Don't miss a chance to learn more about how you can become more aware, positive, calm, centered, and successful. More...
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The One Trading Tool I Use on EVERY Chart
by D. R. Barton, Jr.
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In the late 1980’s, I fell in love — with wine. Up until then, I was always a beer guy. And more than that, I was a beer fanatic. I even brewed my own batches at home, which should come as no surprise given my chemical engineering background.
The shift was not subtle. While working at DuPont, I got the chance to transfer to a new job and lead the start-up for a new carbon fiber composites manufacturing plant. There was one catch — I’d have to spend significant time overseas as part of a technology transfer team.
The assignment? Learn the manufacturing process and oversee construction of the new plant and then lead the start-up of the new facility. Where would I have to spend this significant amount of time? Bordeaux, France.
Sign me up.
The icing on the cake was that the head of our tech transfer team from the French side was on the board that classifies wines for the St. Emilion region of Bordeaux wines. So everywhere we went, the chateaus (vineyards) would roll out the proverbial red carpet.
Not a bad way to learn about the wonderful world of wine.
My love of wine persists to this day, and we open enough bottles at the Barton household that having the right tool to get those pesky corks out of the bottle is a major concern. The good news is that I’ve found the best corkscrew. It is blazingly fast, easy to use, and best of all — quite inexpensive. I’ll give you the details at the end of the article.
Having the best tool around for trading, much like my handy corkscrew is a good thing. The good news for traders and investors is that the best trading tool I have, the one I use on every single chart I look at, is also the simplest one out there. And you don’t have to buy a fancy charting package to use it.
The Best Trading Tool Out There
I don’t care what you trade. I don’t care how you trade it. But if you’re any good at it, then I can be 99.44% certain (does anyone remember Ivory soap commercials?) that you use the most common and most useful technical tools in the universe.
Before you read on, promise yourself that you’ll finish the article. Because we’re going to talk about the oldest technical tools on the planet — that also happen to be the most powerful. And familiarity, as they say, breeds contempt. But don’t underestimate these incredible tools.
Every great trader that I know uses some form of support and resistance. Let’s see how they do it and why you should be looking at these numbers for every trade.
Support and Resistance for Everyone
At its simplest, support is a price level where a stock has traded down to, but cannot go below, for a certain period of time. It serves as something of a “floor” for price.
Resistance is the opposite — a price level where a stock has traded up, but cannot exceed for a certain period of time. If support acts like a “floor”, then resistance is a price “ceiling”.
This chart of QCOM is one of my favorites — it shows these concepts in visual form.
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You can see some key characteristics on this chart. One key way to know that a support or resistance level is strong is that when broken, price really moves quickly from that level. I see this over and over again on charts.
Next, once a resistance level is broken decisively, it often becomes a support level for future price action. The opposite is also true; old support levels turn into resistance zones for subsequent price movement.
Here’s similar action seen repeated in a mid-term timeframe in the Silver ETF (Symbol: SLV) over and over:
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Why does previous price action matter?
All the top traders I’ve ever worked with see support and resistance levels as more than just levels or zones on a chart: these support and resistance levels are seen as decisions points. More than that, they are opportunities to profit.
Many trading patterns are based directly on support and resistance levels. Double tops and bottoms, Donchian channels (the Turtle traders’ entry tool of choice), 52 -week high breakouts and many others are trading concepts that rely on support and resistance levels as set-up criteria.
In the simplest terms, support and resistance levels are where traders and investors made prior decisions. Resistance zones are where buyers ran out of strength and profit-takers and other sellers won the day. Support levels are where short, mid or long-term value buyers stepped in when the price of an instrument gets stretched too low.
In addition to chart areas where multiple tests have occurred, traders and investors use different types of prices and price tools to determine support and resistance areas – especially to predict where these areas might show up in the future. Here are few examples:
- Significant highs and lows. All-time highs and lows are watched by both futures and stock traders. Stock traders pay special attention to 52-week highs and lows. Intraday traders watch yesterday’s high and low and weekly highs and lows for clues as to where support and resistance will show up in the future.
- Fibonacci, Gann and other retracement calculations. Support and resistance levels are so important that traders use many tools to calculate where these zones are likely to show up in the future. Tools like Fibonacci retracements, Gann lines, Gann fans, etc. are all used to project future levels.
- Moving averages. Moving averages are another common tool used by traders to find where support and resistance may exert themselves. 50-day and 200-day moving averages are watched by so many institutions that they have become levels of “self-fulfilling” prophecy, if nothing else. Keeping an eye on these lines is prudent, if only because so many others are watching them as well.
Just because a tool is old or well known doesn’t mean it’s not useful. And a tool that is based on the herd mentality that is simple to use is one that I’ll always carry with me.
Speaking of things I always carry with me, back to my favorite corkscrew. This design is so efficient and fast, I can’t imagine opening wine without it. You may have heard of a “Rabbit” opener. This is a simplified, improved version. It’s so good, the Rabbit brand now has created a similar style. The good news is that this model is half the price of either of the openers that Rabbit offers. Here’s the picture:
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Look on Amazon for Nautilus or Nautilus style opener — there are several manufacturers, but all of them are between $20 and $25 dollars.
Be sure to drop me a “thank you” email when you quickly open your first bottle of wine!
I always love to hear your thoughts and feedback — just send an email to drbarton “at” vantharp.com. Until next week…
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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February 24-26
Friday-Sunday
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March 2017
Early Enrollment Discounts End TODAY!
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Presented by R. J. Hixson
and Kirk Cooper
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March 7-9
Tuesday-Thursday
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Presented by Van Tharp
and Rebecca Price
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March 18-19
Saturday-Sunday
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April 2017
Early Enrollment Discounts End Soon!
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See what Van has to say about the benefits of taking his Peak 101 Workshop in this brief 4 min. video.
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Presented by Van Tharp
with co-presenter RJ Hixson
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March 31-April 2
Friday-Sunday
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Presented by RJ Hixson
and Kirk Cooper
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April 4-6
Tuesday-Thursday
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April 8-10
Saturday-Monday
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Swing Home Study Systems Update
Presented by Ken Long
(Details coming soon on this new offering)
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Presented by Van Tharp
with co-presenter RJ Hixson
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Presented by Libby Adams and RJ HIxson
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June 10-12
Saturday-Monday
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Still to come...
Trading in Sideways Markets NEW! (Possibily July)
Day Trading Systems and Live Day Trading (Possibily August)
Systems Thinking with Van Tharp (Possibly Fall 2017)
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Mail Bag: Letters From Readers
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MAILBAG
I Had No Idea How Much Stress I Was Carrying
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It has been almost a year since the Oneness course. I must say that going to that class was a turning point for me. Learning the meditations (Ananda Mandala and Chakra Dhyana) have allowed me to experience a sense of peace and acceptance that I have never felt before. These skills come at a great time. I am still working as an employee, however not for long. The meditations (Ananda Mandala in the AM and Chakra Dhyana in the evening) have also expanded my awareness of myself. I have become more detached, more in control, more joyful, more optimism and more relaxed, less stressful.
I must also say Dr. Van Tharp, that your tools and products are excellent. I first bought your Peak Performance course in 1999 (I got through the Risk and Stress books, only could not finish the series!?), and I did the Investment Psychology Inventory. When I got the results back from the inventory, I devoured the information. The one section, WR, said I was under "more stress in your personal life than the average investor who completes this inventory. Part of you is trying to tell you something, but the rest of you is not listening." This section plus the rest of the paragraph , I remember opening laughing at this statement and doubting the credibility of the contents I received. I asked my wife if she thought I was stressed in any way. She said no. My interest was fading. I lived
in Las Vegas Nevada, worked as a working foreman for a paving and grading company.
The Financial crash of 2008 stopped credit lines for numerous construction projects all over the Las Vegas valley, and I went to Canada looking for work. I was apprehensive of the move north. I did not like the fact that my skills forced me to move. I initially thought I moved to Canada looking for work. Well, that was partially true. I moved to Canada to discover I was in pain, that I now realize was connected to a childhood injury, from falling off a hay bale. Serious pain.
Because of the nature of my work, there were periods of intense work, and periods without work. After every work season, I recovered. It would take me 2 months of resting to get close to normal pain levels. I started doing the Tibetan yoga sequence called "the five rites of rejuvenation" or “The Five Tibetans”.
The year of 2014 both my kids got married. I went through the whole Peak Performance course. I discovered Structural Integration and had the "Ten-series" applied to my body. I also started to participate in Bikram Yoga. The structural work removed a large amount of my pain that was in my mid-back, neck, spine and complete circle of my torso just below my rib cage. The yoga allowed me have a oneness with my body to show me through an internal representation of my injured area of my body. Plus, restoring great health and wellness.
The clarity of my mind is my greatest gift. I now consider my injury a gift because of how great I feel and I am so appreciative of my gift of life. I am still in pain, greatly diminished and very aware of it. I have realized my purpose is to be free of pain, be happy and peaceful. Trading will help with this. I found a system that has a .39 expectancy that I will work with to start. I will complete a couple of business or game plans. Reread the Peak Performance course. I paper traded the system last year for 3 wks. Made very good money.
I plan to include the paradigm I acquired from my Hot yoga work to trading. I call it a peaceful acceptance of your situation, with love.
I am impressed that your Investment Psychology Inventory detected I was in serious stress. I had no idea how much stress I was in. It harmed my marriage to divorce, alienated my kids, and almost ruined my ability to keep a job.
The meditations (taught at the Oneness Awakening Course) have given me a peace, clarity, and acceptance that have realigned my life. I look forward to start trading live, which I want to start in February. To me, trading means a way of living without pain and stress. After reading "Trading Beyond the Matrix" I realized these meditations helped change other lives, they can help change mine. I am glad I did. Thanks for the awesome courses and products.
—Howard
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New Quiz Series
by Dr. Ken Long
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The Tortoise Trading Room has become an effective collaborative community of practice. It supports mutual learning as we discover ways in which to apply the general principles and specific systems of Tortoise-style swing and day trading to best fit our own individual circumstances. We emphasis documented “learning-by-doing” by recording and analyzing our results as part of the Ten Tasks of Trading.
As part of that collaboration, we have been making daily quizzes and case studies as checks on learning to see how well we have all internalized our group lessons learned. A number of our members suggested we share this technique with Van's newsletter readers as a way to share what we are learning.
To do that, we are offering a number of our typical “daily quizzes” that invite you to analyze common situations during the intraday trade case studies of the past couple weeks. We invite you to analyze the risks and opportunities in whatever style you are comfortable or familiar with. Then, compare them to our analysis and if you like, share your insights with us as a guest at the chatroom. Please feel free to enjoy some of our concepts and resources at tortoisecapital.net
Today, we will start with four videos. Over the next few weeks we’ll give you more.
By comparing your methods of analysis to the Tortoise style you may discover some fresh critical insights that may help us all improve!
Quiz 1:
Quiz 2:
Quiz 3:
Quiz 4:
To send us your comments or questions, use this link:
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This home study course is Dr. Tharp’s masterpiece.
Dr. Tharp carefully crafted the information from his studies into a model that people like you can use to improve your skills and increase profits. It's designed for all levels of investors and traders—beginners, advanced, unsuccessful traders seeking to better their performance and successful traders who want to be continue to improve. The course contains 5 workbooks and 4 CDs.
Think of the enriched trading experince, the savings of costly mental mistakes, the propects of more winning trades, and the cost $795 is a true value. BUY PEAK PERFORMANCE HOME STUDY NOW
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This course is most appropriate for success-driven men and women who really want to excel in the market and who are willing to devote the time and energy that it takes to master the key principles. It’s also for brokers and institutional investors and traders who want to improve their company profits.
We expect you to be logical, ethical, practical, open-minded and willing to tenaciously persevere. You must also be willing to invest the effort to better yourself and your trading business. You must be willing to really work to change yourself and your approach to the markets. If that description fits you, then the course will help you immensely. And, we stand behind the results. If you are not happy with the course after one year, return it, along with your completed exercises, for a full refund. Want one month to review the material to see if it is right for you? Do that and return it if you don't like what you see.
The course is for those of you who have considered casting off the handcuffs that tie you down to consistent tax write-offs every year for investment losses. Deep down you know there is a better way for you to direct your energy that will make you consistent profits. LEARN MORE ABOUT PEAK PERFORMANCE HOME STUDY
- "The Peak Performance Home Study Course is the most comprehensive guide ever written about achieving peak performance trading and a peak performance life! It is one of the most challenging things I have ever done, but also one of the most rewarding. The comprehensive planning and discipline acquired through the course has improved my life on a physical, mental, and spiritual level. The improvement in my trading by reducing mistakes and maintaining the discipline to follow my trading rules has been invaluable. I have learned so much about myself and look forward to continuing to apply what I have learned to my trading and continuing to review the course at least once a year. No matter how new or experienced you are, if you commit
to doing the work in this course, you will be amazed by the results in many areas of your life, not just your trading."—Ashay B., Bolder, Colarodo
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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
If you no longer wish to receive our email updates, click the unsubscribe link in the bottom-left corner of this email.
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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