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More opportunities to achieve Peak Performance this January.
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Tharp's Thoughts
Inbox Mentoring
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Feature: The Boom & Bust Cycle is an Important Hurdle to Overcome in Trader Development, by Gabriel Grammatidis
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Tips:The Fed – Not on Too Many Minds…, by D.R. Barton, Jr.
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GDPR: Read Our GDPR Statement
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Big Discounts On Our October Workshops!
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DISCOUNTS ON OUR FOREX WORKSHOP
1- $700 Early Enrollment Discount: This discount is in effect right now on the October (London, UK) workshop.
2- $500 Discount: Attend the Live Trading event alongside the three-day Forex workshop and take an additional $500 off the live trading sessions. (You pay $2,500 vs $3,000.)
3- $600 Discount: Owners of the Forex Home Study qualify for an additional $600 discount off the three-day workshop. (See more below)
4- Variety of Discounts: Attend another VTI workshop scheduled back to back with Forex in London and get additional combo discounts for attending more than one three-day workshop.
5- $200 Discount: Bring a friend who is not already a VTI client and you each get an additional $200 off. (This discount can apply to any VTI workshop.)
If you have any questions about these discounts or any other questions, please email [email protected] or give us a call, 1+ 919-466-0043. We are always happy to speak with you to help make a decision about attending this or any other workshop
Scroll down to read more about the Forex workshop below.
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Order the Forex Home Study Course now and walk through the door with a thorough understanding of the Busted Breakout (System 1). This will give you an edge at the beginning of the class so you better understand the first system, which also helps you to understand the other two.
You can deduct $600 (which is most of the cost of the home study) off the price of the Forex workshop.
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The Boom & Bust Cycle is an Important Hurdle to Overcome in Trader Development
by Gabriel Grammatidis
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Every trader goes through certain stages of development. Part of the first stage is to find a good trading system that fits the trader who also commits to fully following its rules. Learning and internalizing the rules of the system, the trader will need to build extensive experience trading the system. In this phase, the trader will become able to discriminate between the components of a good setup and be able to spot a high quality pattern (this typically takes about 1-3 months). The trader then enters into the second stage in which he starts to make money in the markets. However, the trading profits in this phase are usually inconsistent! At this point, the trader has entered the Boom and Bust Cycle of trader
development.
This article will explain this phase and how to overcome this phase through three steps:
- establish a more adaptive approach to trading,
- develop a natural attitude of humility, and
- determine a good mental state for trading.
The Boom & Bust Cycle
This phase is characterized by wild swings (pronounced ups and downs) in the equity curve. Days of multiple R winners are followed by days during which the trader gives away the prior profits — and sometimes more than that. From a psychological perspective, this is the most challenging stage of all. Traders experience a mix of diverse emotions ranging from euphoria to frustration, anger and fear. As traders’ buttons get pushed, psychological issues surface: beliefs, conditioning, automatic reactions, strengths, weaknesses and many more.
The emotional swings and the equity curve volatility undermine confidence and can make for a rough time. It is very easy to get sucked into a period of multiple trade opportunities and become euphoric. It also occurs that traders try to squeeze trade opportunities out of the market when there are just none. Most traders go through this phase for some weeks or a few months while some get stuck here, even for several years.
In this stage, the trader tries to force limited views and specific trading strategies onto the market. As a newer trader’s thinking process tends to be rigid, trading performance is very volatile. The trader can make good money, but has not yet learned to keep the gains or add consistently to profits. The trader is not yet playing the Trading Game according to his personal rules. The markets push the trader around which creates confusion, stress and loss of confidence. The trader has not yet become the “Captain” of his or her own trading.
Imagine a cruise ship captain who receives differing weather forecasts on the command bridge. Without sufficient experience, he might become stressed and react in strange ways: losing confidence about what to do and in consequence, giving orders on one forecast, then new orders on another forecast. Reacting like a bio-robot, he acts out his inner conditioning and beliefs. Even worse, asking for the expert opinions of nearby ships will only add to his insecurity and confusion. Would you put your trust in such hands for your vacation? Would you be able to relax and sleep in the deep waters on this ship?
In similar circumstances, novice traders can find they are playing other peoples’ games in the markets – price traps, ambushes and breakout failures. Clearly, this situation leads to poor results. Good trading requires more balance and stability which involves more than just preparation. Even after building some experience, traders need to develop a strong “Awareness of the Market.” Once you become aware of what is going on around you, then you can develop a better plan and improve confidence.
A More Adaptive Approach to Trading Through Awareness
Visual trading patterns have the tendency to come in swarms — like giant squids. Once they appear, you can find them in many symbols and even in different timeframes. These are the best times for high quality patterns to develop. As with many natural phenomenons, markets move in cycles. Market cycles typically last from a couple of days to a few weeks. Sometimes the market provides easy profits and at other times even good quality patterns result in disappointing trading results. It is important to know and be aware of the cycle the market currently is in — strong vs. weak market.
Listen to the market feedback you receive as a trader and act accordingly! There are times to be aggressive, i.e. to “put the pedal to the metal”. There are other times when you should take a much more careful approach to trading.
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As a general rule, when the market is weak and not “respecting” the patterns you trade, then take a step back. Slow down and do not force the next trade. As the market is not performing well, only trade the highest quality setups. These trades will provide excellent potential for a strong follow-through that is counter-balancing a weak market situation. Avoid trading low quality setups in a weak market. Once the market becomes “strong” again, meaning that it produces good results even for average quality patterns, then the time has come to “put the pedal to the metal” again. Reap profits by trading every pattern that comes up as long as they are
available.
Humility as a Natural Attitude to Trading
Another important ingredient to pass through the Boom & Bust phase is “Humility.” In the real world outside of trading, trying harder often leads to success. Trying harder in trading, however, has some very detrimental effects and leads to revenge trading — a recipe for failure.
The best traders have a natural attitude of humility towards the markets. They show an attitude of being students of the market. As such, you can see that the market is always right. The market provides trading patterns, trading profits, and normal trading losses (losing trades as part of any system). When the market does not provide positive results, then the natural behavior of a trader should actually be to calm down & relax (practice of humility)! This approach allows traders to keep control of their ability to spot high quality setups and maintain the awareness of the strength towards these patterns in the market.
Once a trader completely lets go of the “wanting to control,” then trading will become much easier. Going with the flow while following the path of least resistance, as well as, perceiving the market as your friend (and no longer your enemy) are clear signs of a good, natural attitude to trading.
A Good Mental State for Trading
A trader who has moved beyond the Boom and Bust Cycle has established a mental state that is independent of trading results. This trader focuses on the flawless execution of good trading setups in favorable market situations.
If you can enter the trade without a single doubt while not caring about a 1R loss outcome at the same time, then you are in a proper mental trading state. Even if the trade had an immediate stop-out, would you still feel good about the trade? A very good mental trading state is calmness and confident in-difference (like a cat sitting in front of a mouse-hole). Wanting to try out a new trading idea out of curiosity and see if it develops into a winner is usually not a good plan.
The best trades are those that the trader “feels passionate about.” While analyzing a trade, think about its main edge(s). Is there something that really stands out about the trade which you feel passionate about? What is the strength, soundness and beauty of the trade? Here, I am not referring to any thoughts about how rich the trade might make you. Passion comes from a relaxed state of consciousness — from a stillness within.
Where Are You?
If you are a brand new trader, be ready for your own Boom and Bust Cycle which will come after you gain some experience. If you are in this phase right now, then be patient and follow the advice above. If you have moved past this phase, then congratulations for sticking through it.
I'm looking forward to meeting you soon in person!
Gabriel Grammatidis
PS — I am teaching the next Forex Trading Systems Workshop in October, London/UK. Part of my personal mission is to help others, provide information, and transfer knowledge so that your path of trader development becomes as smooth as possible. As more experienced traders will tell you, everybody needs to transition through certain learning stages and I enjoy helping new and experienced traders make those transitions. With every workshop, I too am learning from you in how to better coach you. I like to stay in touch with attendees once the workshop is over and I offer various degrees of support after each event.
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About the Author: Gabriel Grammatidis is a successful full-time trader and graduate of the Super Trader program. He has extensive experience trading Forex and shares his knowledge at his Forex and Live Forex Trading workshops, held regularly at VTI.
For more information on the Busted Breakout psychological dynamics see his article in the Traders' magazine. Gabriel can be reached at gabriel "at" vantharp.com.
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The Fed – Not on Too Many Minds…
by D.R. Barton, Jr.
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Two quick but important thoughts about today’s Fed meeting as I write this morning:
- They will raise rates.
- The markets don’t seem to care. I will tell you why below.
First, here are a couple of handy charts from the Chicago Mercantile Exchange’s (CME) Fed Watch Tool where Fed Funds Rate futures are traded so institutions can hedge their interest rate risk:
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The chart is pretty self-explanatory. Traders give a zero chance for interest rates to stay the same and a 5% chance for a raise of 50 basis points (bps) or interest-rate-speak for half a percent raise.
There’s no Fed meeting in October. In November, traders are showing a 93.8% chance of no action by the Fed. Interestingly, there’s a 6.2% chance for a 25 basis point raise and even a miniscule chance for a 50 bps raise:
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But look what’s brewing for December:
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Again, this is a fairly self-explanatory graphic. It’s interesting to note that the renewed tariff worries have knocked the probability for a December hike down. I’ve seen it as high as 83%...
With multiple rate increases looming, why has the Dow been making all-time highs last week with the S&P and NASDAQ not far behind? Traders are seeing corporate earnings grow at a very robust rate, unemployment is at multi-decade lows and most analysts believe interest rates have been held artificially low by the Fed for too long.
So, while it’s taken a long time, the market welcomes this reversion to interest rate sanity and the interest rate hikes (and the economic slowing effects they have) are already priced in.
What would upset the apple cart?
Anything that deviates from the September + December 25 bps hike plan. Skipping one of the hikes would signal economic concerns by the Fed. Making either of those hikes a 50 bps hike would seem over-zealous.
As long as the Fed stays the current course, the markets will remain happy (and bullish).
Speaking of which, we have a very bullish signal leading into today’s hike (by the time you read this, it has probably already happened…). One of my quant colleagues has noticed that when the S&P 500 is down three days in a row before a Fed announcement, that there is a strong tendency for a short-term up move.
This three day down pattern before Fed Day has happened 105 times since the SPY ETF was introduced. A robust 74.3% of the time, the market was higher five days later — a compelling advantage over random chances.
If you found this trade set-up compelling and play along, let me know. I always enjoy hearing your thoughts and comments! Please send those to me using drbarton “at” vantharp.com
Great trading and God bless you,
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 Networks’ Varney & Co. TV show (catch him Tuesdays at 9:30 a.m. EST), on Bloomberg Radio Taking Stock and MarketWatch's Money Life Show. He is also a regular guest analyst on CNBC World, CNBC's Closing Bell, Fox Business Network’s Cavuto Coast to Coast and Making Money with Charles Payne and the China Global Television 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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October 2018 - LONDON, ENGLAND
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Presented by Van Tharp,
with RJ Hixson
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October 12-14
Friday-Sunday
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Do any of the following sound like you?
- Are you always looking for a new trading system? Or, are you always trying to improve the one you have?
- Do you find your trade setups never quite fit all of your criteria so you have trouble entering trades?
- Do you get anxious about the market or get anxious about risking your money so that you have trouble pulling the trigger?
- Do you get excited and ignore your rules or do you get distracted and fail to follow your system's rules?
- Does a losing trade take your energy away from the next trade or conversely, does a winning trade make you confident about the next trade?
- Is your trading (or your life?) ruled by fear, anger, greed, or shame?
- Are you constantly losing money?
- Do you lack a strong plan to guide your trading or do you fail to follow the plan you created?
- Do you have a performance ceiling where you fall apart or stop doing well consistently? Does your account reach a certain size and then it plateaus or you start losing money at that point?
If you answered yes to any of these questions, then you are experiencing some form of self-sabotage. But don’t worry, these are some very common patterns for traders and you can overcome them in order to reach your potential. This workshop will help you identify and resolve the underlying conflicts causing these patterns — as well as leave you with the tools to address conflicts that come up in the future for you.
It's been Van Tharp's cornerstone workshop for over three decades. Read more to learn the benefits you will walk away with.
Peak 101 will also be taught in Cary, NC this January. See details under January's workshop schedule.
Peak Performance is also a very important workshop to put on your calendar if you want to qualify for and apply to the Super Trader Program.
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October 16-18
Tuesday-Thursday
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The How to Develop Winning Systems Workshop teaches 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. With this knowledge you can both modify existing systems to fit you or the market type better, or master your own system development.
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Presented by Gabriel Grammatidis
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October 20-22
Saturday-Monday
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Presented by Gabriel Grammatidis
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October 23-24
Tuesday-Wednesday
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The Theory: All You Need to Know About Forex
Gabriel will spend most of the workshop teaching his trend-following systems. The first half day is spent to go over the specifics of trading the Forex market and cover such topics as:
- Why trade Forex?
- What are the advantages and drawbacks of trading Forex versus other instruments?
- What are the main market characteristics, and who are the Forex market participants?
- What methods work best in the Forex market?
- All you need to know about Forex trading sessions and the currency pairs.
- How are Forex chart characteristics different than stocks or futures?
- What do you look for in a Forex broker? What do you avoid?
- Why Forex may actually be the best market for new traders to learn trading.
- What are the trading edges that work in Forex?
- The Method
Gabriel teaches three specific trading systems. All three are trend-based; you can see the price action patterns in the price charts. His systems can be traded in various timeframes and can be traded across a wide range of currency pairs. Attendees of Gabriel’s workshops enjoy swing trading the systems using primarily 5-min ,15-min, 60-min and daily candle charts. The trades tend to evolve over a timeframe of anywhere from several hours to a couple of days (or even weeks, in the case of strong trends).
Two additional days of live forex trading side-by-side with Gabriel is available as well for hands on trading experience.
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October 26-28
Friday-Sunday
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In this workshop, you begin to build your plan that includes specific, actionable steps you can begin as soon as you get back home. Here are some of the benefits of attending the workshop:
- Assess your beliefs about trading and about yourself so you can leverage your useful beliefs and eliminate the ones that are holding you back.
- Learn how to steer your entire system development process through your objectives.
- Find the key ingredient that most traders and investors are missing in their objectives that will make you thrive financially.
- Create a business plan with 3 trading strategies compatible with the big picture so your trading results are consistently profitable.
- Learn the 8 critical areas of contingency planning that most traders find out about the hard way (i.e., the expensive way). Developing plans for contingencies minimizes the risks to your trading business that could otherwise wipe you out.
- Discover how to leverage the strengths of your personality type and minimize your personal challenges to improve your trading.
- Learn how to cultivate the most important attitude required for successful trading.
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Presented by Ken Long
Monday includes instruction plus live trades
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November 10-11-12
Saturday-Monday
Note schedule change.
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Exciting New Work from Van Tharp
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November
15-17
Thursday-Saturday
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Super Trader Summit
For Super Traders Only
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Presented by Van Tharp,
with RJ Hixson
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January 18-20
Friday-Sunday
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Presented by Libby Adams
and RJ Hixson
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January 22-25
Tuesday-Friday
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Presented by Van Tharp
and RJ Hixson
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January 27-29
Sunday-Tuesday
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FREE Book!
We pay for the book, you just pay for shipping.
When you add the free book to an item already being shipped there is generally no extra shipping charge (of course, depending on your location).
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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GDPR COMPLIANCE:
The European Union General Data Protection Regulation (GDPR) went into effect on May 25, 2018 and is designed to allow individuals to more effectively control their personal data. At The Van Tharp Institute (IITM, INC) , client information is private and confidential; we do not share, trade, or sell to anyone. We never have. You may ask us at any time to unsubscribe. We keep your information safe. If you’d like access to your information just ask. You receive this information from us because you opted into the Van Tharp newsletter either through direct registration or registration through our Tharp Trader Test.
102A Commonwealth Court | Cary | NC | 27511
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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