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

  • Article A Trading Reality Check by Van K. Tharp, Ph.D.
  • Trading Education NEW E-Learning from Van Tharp
  • Trading Tip Stocks in Your Pocket or Purse: The Market Goes Mobile, Part 6 by D.R. Barton, Jr.
  • Workshops NEW! Forex Workshop Offered in June
  • Mailbag Van Tharp Client Wins NAAIM 2011 Wagner Award

A Trading Reality Check

Having modeled success in numerous areas of trading—the trading process, designing systems, and position sizing™ strategies—it still totally amazes me to see how we are almost "hard-wired" to do all the wrong things. It’s almost as if we were put on this planet to determine how many ways we can mess up our trading and even our lives.

How do you respond to a loss? Have you done any simulations of your trading? Have you really worked on yourself and determined that it’s all you? What decisions have you made about your trading and yourself?

If you’ve been working through the Peak Performance Home Study Course or reading my latest book, Super Trader, you probably have learned many ideas to improve your trading. Let’s look at one simple example: a business plan for your trading. There is probably no good reason not to spend one month (or six months) developing a good business plan and incorporating many of the ideas covered in the book or in the course. So what is stopping you?

If you don’t immediately feel the urge to carry out such a task, it’s time to do a little homework to recognize your self-defeating patterns and excuses.

We All Have a Story

I’d like you to sit down and write several paragraphs on, "The Story I’d Tell Myself If I Have Not Produced Meaningful Change in My Trading and Myself." Be honest with yourself. What are your typical excuses?

Your story might sound a little like this:

“I was desperate. I was running out of money, and I needed to do something. I really didn’t want to go back to work, so I had to make money. As a result, I really didn’t have time to do a proper business plan. Instead, I just made trades.”

Or…

“After going through the Peak Performance Home Study Course and Dr. Tharp’s books, I didn’t do any of the things recommended because…”

Or your story might be worse:

"After buying the Peak Performance Home Study Course and the Super Trader book over a year ago, I have not looked at either of them because…"

For the 30 minutes that it takes to do "The Story I’d Tell Myself...” exercise, give yourself a break and be brutally honest. You know that you’ll con yourself in order to not make any progress. Treat this exercise as a test to determine just how you con yourself. Can you be honest and tell it like it is, or is it more important to justify the excuses and be a failure?

So go ahead. Take 30-60 minutes right now and start writing down your excuses about your trading.

Do the exercise even before continuing reading this article! It's that important.

So What Did You Write?

If you were honest with yourself, you justified your limitations. You’ve probably created a record that includes many of the major thoughts and beliefs that you use to undermine virtually every endeavor that you create. Furthermore, the more honest you’ve been with yourself, the more valuable this exercise will be for you.

What might some of those excuses and justifications look like?

Here’s a list of possible excuses:

  • I just haven’t had the time that I need to trade better.
  • My spouse doesn’t understand my trading and how important it is.
  • I have had too many distractions, and I cannot focus.
  • The market has not been acting like I expected.

Here are some of the kinds of excuses people have stated who have my materials but haven’t made progress with them:

  • I had Dr. Tharp’s material but it wasn’t for me.  I thought it was something simple that I could use to transform myself. I didn’t think it would be so much work to complete it.
  • Dr. Tharp doesn’t know me. He doesn’t really understand the kind of person I am.  If he did, his material would be easier.
  • My life is going fine. I don’t have any problems, and I just don’t need to deal with all of this stuff.
  • I’m right and Dr. Tharp just doesn’t get it.
  • I know I need to study this stuff, but I just can’t seem to find the time.

You make excuses simply so that you can be right. You are basically saying that you like your excuse beliefs because they are right.  I have mentioned over and over again that wanting to be right is a pervasive problem for most people.  Excuses don’t make you happy.  Excuses don’t make you successful. Excuses, however, do allow you to be right and if that’s so important to you, so be it.

If you want to evaluate your excuses or any of your beliefs for that matter, there is a great strategy you can use.  It's called the Belief Examination Paradigm and you can learn more about it here.  

If your trading isn’t going the way you want it to, change what you are doing. One of the basic presuppositions of NLP (Neuro-Linguistic Programming) is that if something doesn’t work, do something else. Almost anything else will get you different results.

Maybe you need to change something about your trading system (your exits or your position sizing strategy). Or maybe you need to change how you approach your life in general.

Life is a process. There is no success or failure—only feedback. You’ve been getting feedback about what you’ve been doing for a long time. How have you been responding to it so far?  Have you been making up a lot of excuses?  Are you more interested in being right than making progress toward your goals?  Are you willing to change now? It’s never too late. You’re never too old.

Just imagine that you are responsible for everything that has happened to you up to now in your life. That’s part of "respondability" that I’ve talked and written about so many times. And when you finally decide that you are responsible for your own life—for what has happened in the past—you will find that you get an immense rush of freedom.

You can decide right now what you want, and you are in charge of making it happen.  Today is always the first day of the rest of your life, so begin now.

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.vantharp.com.  


Trading Education

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The information contained in this course will open your eyes to the importance of position sizing strategies and how they can reduce your losses and increase your profits. The profits gained by applying the information contained in this course could easily pay for the course over and over again. 

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Stocks in Your Pocket or Purse:
The Market Goes Mobile, Part 6

In this series, we’re looking at mobile phone apps that are available for the iPhone/iPad/iTouch. With an installed user base of over 100,000,000 iPhones, this is the logical platform on which to start our app reviews. We’ll move on to the Android platform in a subsequent series of reviews.

Today, we’ll give the offering from venerable Bloomberg the once over.

A Success Story Worthy of the Big Apple

Before we jump into the app itself, let’s look at a very brief history of the Bloomberg company.  Twenty years before his run for mayor of New York City, Michael Bloomberg was fired as a general partner at Salomon Brothers.  He used his severance money to set up the company that became Bloomberg, L.P.  They produced the state-of-the-art Bloomberg Terminal (originally called Market Master Terminals), which continues to be the linchpin of a multi-billion dollar company.  Michael Bloomberg left as CEO in 2001 on the way to his successful bid to become mayor of NYC.

Today, according to The New York Times, Bloomberg, L.P. controls one third of the $16 billion global financial data market.  In addition, they run a television network and a major financial radio station.

The Bloomberg App: International Markets, Real Time Indexes

When you open the Bloomberg app, the main page is the best international index in the business.  And for the indexes I checked, all seem real time.  There aren’t just a few indexes represented; there are 40 in total in the default listing!  Do you need to know what’s going on in the markets in Bangkok, Istanbul or Oslo?  This is your place!

In addition, you can get a small chart and description of the index by tapping on it.  Turn your iDevice to landscape orientation and you get a full screen chart.  However, other than volume, no analytics are offered.

The market overview doesn’t stop there: there are individual subpages with 25 commodities, 19 international bond quotes, 25 currency pairs, and even more equity index futures (if the cash indexes didn’t satisfy your particular craving).

Unfortunately, for all of the subpages, there are no charts and the data is delayed—good overview but no depth.

When it comes to individual stocks, the Bloomberg app has a sparse set of tools: the ability to set up a watch list, delayed data charts (with no analytics), and little else.

Some News, Little Else

On the news side, you would expect Bloomberg to shine.  It does in some areas and doesn’t in others.   You do get news headlines; however, they are delayed and very limited.

The audio features on the other hand are just plain disappointing.  In half of the subheadings, the most recent items were three and four months old.  And there weren’t enough items less than 24 hours old in the whole audio section to make me want to come back.  In addition, all of the audio programs were downloads—not streamed—so then you have to manage these files.

As with the other reviews, I'll comment on the app’s publisher’s business model.  This app has banner ads only in the disappointingly-populated audio tab.  Like on CNBC’s RT, the ads don’t disappear after a set time—they stay on the screen.  Fortunately, the most useful screens (the market overview screens) contain no ads, so that’s a plus.

I’d love to hear your thoughts and feedback on this article or about any other stock market apps that you’ve found useful.  Please email me 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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Workshop

Our June Workshops Offer You a Crash Course in Trading Systems!

Ken Long has a deep understanding of why his systems work on ETFs and large cap stocks, and he’s great at communicating his systems logic so everyone can understand it fully.
 
You will see Ken's process at work in the first June workshop and then again in a very different environment—the currency markets—when Gabriel discusses how he developed and trades his Forex trading system. 

During the final workshop, you have the option of exploring your own original ideas or bringing in others’ ideas that you like and applying this thinking.  You will team up with other attendees to create all ten parts of a trading system during this hands-on learning laboratory. 

Do you want to make trading system development and execution a stronger part of your trading business? Then, sign up for all three workshops!

June 3-5 $295

Oneness Awakening Workshop
Expanded three-day format!

Cary, NC
June 9-11 $3,995
$3,295
Systems That Outperform Global Markets Long Term 3-Day Cary, NC
June 12 $599 New! One-day Forex Trading Workshop Cary, NC
June 13-15 $2,995
$2,295
How to Develop a Winning Trading System Workshop Cary, NC

For the first time in two years Van is taking his two signature workshops to Europe.

June
28-30
$2,995
$2,295
Blueprint for Trading Success Berlin, Germany
July
2-4

$2,995
$2,295

Peak Performance 101

Berlin, Germany

Click here to see our full workshop schedule with details

Click here to see our workshop guide for information about attending, locations, hotels, etc.


Mailbag

Van Tharp Client Wins NAAIM 2011 Wagner Award

Congratulations to VTI friend and client Thomas Krawinkel on winning the NAAIM 2011 Wagner Award for Advances in Active Investment Management!  If you would like to learn more about the National Association of Active Investment Managers and the Wagner award, you can visit their web site: http://www.naaim.org/about.aspx.

Thomas’s winning paper, Buying Power—The Overlooked Success Factor, contained a number of Tharp Think concepts including expressing your trades as R-multiples, expectunity (expectancy multiplied by number of trades), and position sizing strategies.  In an email from Thomas, informing me of his winning this award, he said, “I want to thank Van and all at IITM for teaching so valuable and powerful concepts. I would not have been able to write this study without learning from you.”

Thomas, I am so thankful that these concepts have made such an impact in your trading. Congratulations, again! If you would like to read Thomas’s paper, you can download it here.


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May 11, 2011 - Issue 525

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ST expanded

The New Expanded Edition is Here!

Includes Four New Chapters and an Improved Layout!

Super Trader


 

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Tharp Concepts Explained...

  • Psychology of Trading

  • System Development

  • Risk and R-Multiples

  • Position Sizing

  • Expectancy

  • Business Planning

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