The Van Tharp Institute

June 22, 2005 — Issue #225

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In this Issue:

Feature Article

Mission Impossible? By Van K. Tharp

Trading Tip

Print Articles:  Useful or Timely?  Rarely Both…by D.R. Barton, Jr.

Coming Workshops Learn Swing Trading from Two Pro's
GREAT NEWS!

Van's Book Hits Amazon's Best Books of 2004 list! 

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Market Mastery Insight 

View this newsletter on-line, or read back issues

 

 

Feature

Mission Impossible?

What the Van Tharp Institute is All About.

By Van K. Tharp

A small group of people recently commented in the Van Tharp Forum that my current work is not as significant as my earlier work.  They said that my earlier work  (when I helped traders psychologically) was better than the more recent stuff, which they feel is like the material that everyone else puts out there. 

My purpose in this article is to comment on that and let you know what we have been doing in the creation of our products and services– especially in the area of psychology.

First, our mission has not changed.  It's about helping people become the best trader or investor they can be and transforming their lives in the process – using a financial metaphor to do so.  If anything, we’ve simply been working to expand our base.

Second, I am a modeler.  And my research has focused on extending the model. 

Initially, I modeled the trading process (that is the Peak Performance Home Study Course). Then I modeled money management (now called position sizing).  The term “position sizing” was never mentioned by anyone prior to the publication of Trade Your Way To Financial Fre-edom.  Now, it's probably used as a term more than money management. I created a Special Report On Money Management and a set of position sizing videos to explain these concepts further. 

Incidentally, I have recently written the Definitive Guide to Position Sizing and Expectancy and we are intending to release it within the next three to six months. This is an update to the Special Report On  Money Management, but it is much bigger and more comprehensive (and we’ll have a special offer to those of you who’ve purchased the Money Management Report through us previously).  The Definitive Guide is an extension of my latest modeling with Know Your System software -- and includes thoughts on Fixed Ratio position sizing and how to do it properly.

Next, I modeled system development.  The How to Develop A Winning Trading System courses and Trade Your Way to Financial Fre-edom came out of that.  My next work in this area will be a consumer guide and you’ll be hearing about that soon too.

I then went on to create the book Financial Fre-edom through Electronic Day Trading with Brian June, at a time when Day Trading was at its peak. The Business Planning for Traders and Investors CD’s grew from there, when I realized that people needed specific guidelines on what to think about and consider as they created a “business” for their trading.

People learn in different ways, so I have also created a psychological profile - a set of 176 questions to determine your strengths and weaknesses as a trader, a position sizing game (Secrets of the Masters), and recorded various teleconferences with my updated thoughts.

That pretty much completed the trading arena. 

However, I often noticed that most people don’t have enough money to trade effectively and practice proper position sizing.  As a result, I decided to model wealth.  The Infinite Wealth Course was born out of that and I think the concept is rather unique. 

Most people really don't even know what their financial freedom number is, or what it really means.

My book Safe Strategies for Financial Fre-edom and our most recent home study course Make Money Work For You were borne out of a combination of all my concepts. 

Throughout all of this development, we've been on the forefront of the psychology of trading and investing.  However, most of it is written in my subscription based monthly newsletter Market Mastery (which is a larger version of my email newsletter Tharp’s Thoughts)

Here are some of the articles that you might have missed if you are among the thousands of subscribers to Tharp’s Thoughts who have never seen a copy of Market Mastery.

  • Understanding the Games We Play (Dec 2001 – Jan 2002)
  • Self-Sabotage Re-examined (June 2002)
  • Self-Sabotage Re-examined II (July 2002)
  • Personal Responsibility (August 2002)
  • How to Avoid Being Mislead by Advertising Hype (April 2003)
  • The Five Focus Levels of Investors (October 2003)

Also these two special reports have been developed out of the Market Mastery series. 

  • A Conversation with Van Tharp, a six part series dealing with my latest thinking, which was published from July 2004 through January 2005. This will be available in special report in the near future. And,
  • A three part series on Peak Performance Health, which I believe to be critical to your personal psychology. (This is now a special report developed out of the February  2002 through May 2002 Market Mastery Series.)

The first six back issues above are available to purchase individually as back issues or see this week's special, click here

We also developed a teleconference on personal psychology and trading last year.  In that teleconference I talked with one of my clients about a whole different way of thinking about discipline and how to develop the commitment needed for trading success.  I believe that it is some of the most important work I’ve done…and you'll find that information in my  Psychology of Trading CD series.

We used to teach a workshop called Mental Strategies, because I spend about 30 minutes on mental strategies in the Peak Performance Course and people wanted more of that.  As a result we developed an advanced workshop.  Although it was one of my favorites, it seemed to be too “out there” for most traders  so I stopped doing it.  Nevertheless, I still wanted an advanced psychology course that really was on the cutting edge.

I think we've pretty much found the secret with Advanced Peak Performance 202 Workshop which deals with games we play, three different models for self-sabotage, and then we focus on the most advanced model in the course.  We’ve done this workshop about eight times now and more and more I see that it's becoming very strong workshop.  If you haven’t done it, then consider taking Peak Performance and Advanced Peak Performance as a package next September.

I haven't put this material in book format, but why should I?  Many people are not ready for it. And I believe that when the students are ready, the teacher will appear. In fact, most people tend to find the Van Tharp Institute after they have spent a lot of money on the wrong things, have lost a lot of money trading and investing or are really ready to break through their barriers and move to the next level.

Often they “fall into” the knowledge that it is all in their heads and it is at this stage that they can really learn what it is that they need to know. 

I am extremely proud of my core work – the Peak Performance Home Study Course – as well as everything else that we deliver at the Van Tharp Institute. I have an amazing group of staff who are all dedicated to the same mission and I do not feel that I need to create another home study course of the magnitude of Peak –which took me 5 years to develop. In fact, I believe that some of my best work has been created since then, because of the foundation that the course created and I will continue to grow and add to this foundation with anything that I feel will benefit my clients.

Market Mastery (or even earlier the Course Update newsletter) has always been our format for putting these new things out there. 

And with the exponential growth of the Internet, and the subsequent increase in the amount of information that bombards us everyday, it seems even more important than ever to guide people in the right direction with their investing and trading before they are seduced by “get-rich-quick” programs.

The bottom line is that I've discovered that no matter what I've modeled -- the trading process, systems development, position sizing, or accumulating wealth -- people seem to be wired to do everything they can to sabotage themselves.  And helping people (as many as possible) get beyond this will always be our mission.

And, I believe it IS possible. 

 

Editors Note: Throughout the issues you will see certain words with odd spellings, such as Fre-edom and mort-gage. This is because spam filters are likely to block message that contain certain words and this is one solution.

 

Tradng Tip: 

Print Articles:  Useful or Timely?  Rarely Both…

by  D. R. Barton, Jr

"Ah, ‘All things come to those who wait,’
(I say these words to make me glad), 
But something answers, soft and sad,
‘They come, but often come too late’.

--Author unknown

Some forms of the media are easy to pick apart.  Television reporting is a frequent target of nay Sayers and critics because TV is a sound-bite world.  And there are certainly plenty of print media and Internet sites that routinely fall far short of being helpful.

But you can usually count on The Wall Street Journal for factual and well-written journalism.  Whether the articles are useful or timely for traders and investors varies on a case-by-case basis.  And it is rare that any article is BOTH useful and timely.

I happened across an article in today’s Journal that was certainly useful.  On the front page of the “Money and Investing” section there was an article on the cruise line operators and how they have been hit hard by the run-up in oil prices.    The cruise lines have been painted with the same broad brush that has smacked down the airlines.  The reason being that higher oil prices mean lower profit margins if the carriers can’t pass the costs onto consumers.  It seems that the depression in cruise line share price is overdone. Consider the excellent points made in the article:

  • Oil prices have a much smaller effect on cruise lines than airlines.  Cruise line companies spend 6% of their operating revenues on fuel, compared to 20% for airlines.
  • Profit margins are still strong even in the face of increasing oil prices.
  • The rate of capacity additions is dropping, meaning that supply will tighten.
  • Unlike airlines, cruise companies have successfully increased prices.

So what’s not to like about the article?  It’s a month and a half late!  Both Carnival Corp. (CCL) and Royal Caribbean Cruises (RCL) are up 15 – 20% off their lows from early May.  And both have made strong moves up in the last week.

So what’s a trader or investor to do?  Stop reading altogether?  (Of course not!  Then you’d miss this article…) Let’s not throw out the baby with the bathwater. We can find lots of useful information and well-written articles.

But use caution and good common sense!  Don’t just jump on board because you think an article will drive prices up. (Carnival and Royal Caribbean’s prices are essentially flat on the day of the article.)  Find good ideas (and this one on the cruise lines seems pretty useful) and apply your own due diligence.  Then perhaps you can find a point in time where the concepts make sense technically as well.  Perhaps a pullback will allow a more advantageous entry.

Keep scouring for useful ideas, but make sure that the concept passes your own fundamental due diligence and your tests for technical timing.

 

D. R. Barton, Jr. will be teaching the upcoming Proven Tactics of Swing Trading Course, August 2005 and is a featured speaker in the Van Tharp Institute Course, Make Money Work for You

He is the Chief Operating Officer and Risk Manager for the Directional Research and Trading hedge fund group. D. R. has been actively involved in trading, researching and teaching in the markets since 1986.  D. R. has taught extensively in many investment areas including intra-day trading, swing trading, and cutting edge risk management techniques. 

His writing credits include co-authoring Safe Strategies for Fin-ancial Fre-edom and co-creator and contributing author on Fin-ancial Fre-edom Through  Electronic Day Trading.

Coming Workshop...

Proven Tactics for Swing Trading

Profitable Trading that Fits YOUR Schedule

Presented by Brad Martin and D.R. Barton

  • Learn the Pro Traders' Secrets for Capturing Huge Profits in Bear or Bull Markets
  • Become Skilled at Swing Trading - the Trading Style That Fits Into YOUR Schedule
  • Don't Lose a Bundle by Holding Stocks During The Last Market Decline! Find Out the Master Traders' Alternative to "Buy & Hold"
  • Discover the Detailed Trading Strategies that Win in Today's Markets

Learn more...

Register Now

 

Great News: Amazon's Best Books of 2004

 
Safe Strategies for Financial Freedom Made
Amazon.com's Best Books of 2004 Top 10 Editor's Picks: 
Investing and Personal Finance!

 

Want to see?...click this: Top 10 Editors Picks Investing 

Feedback: 

Van-
I too subscribe to Market Mastery and I look forward to the insight you provide as a reminder to continue working on myself. It is a great service and I buy it specifically for its content on trader psychology rather than a gurus pitch of the latest hot stock.

Thanks-
MS

Read More...

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Ask questions, share ideas, information and feedback with Dr. Tharp and other like-minded traders and investors. 

 

 

 

 

 

 

 

 

 

 

 

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