#844 June 28, 2017
  • Feature: Reducing Uncertainty — A Valuable Practice by RJ Hixson
  • Workshops: Workshop Dates Set for the rest of 2017, including London, England this October!
  • Tips: A View from the Bear Side — The First Chink in the Armor? by D.R. Barton, Jr.
  • FREE BOOK!: Trading Beyond the Matrix
Learn More About Ken Long's August Day Trading Workshop
Hear What Past Students Say In the Video Below.
Attend Both August Workshops and Take an Extra $1,000 Off the Combo!
TIME SENSITIVE: Due to the extensive pre-work that will be distributed by Dr. Long to prepare for this class, it is highly recommended that students sign up as soon as possible after making the decision to attend. We want each student to have ample time to complete their work and be fully prepared before attending, so time in class will be the most beneficial for all.

Feature Article

Reducing Uncertainty — A Valuable Practice
by RJ Hixson
Whenever I used to hear or read an outstanding book recommendation, I would typically buy the book and put it on my “to-read shelf” — which always offered a choice of great material. Maybe five or six years back I purchased one book for that shelf but was unable to read much more than a chapter or two on two different occasions. While highly recommended, the book read as dry and textbookish so I just put it back on my shelf. Last year, I had a couple of audible.com credits to use quickly before my subscription expired so I decided to give the audio version of the book a shot. Wow! What a difference listening made. For whatever reasons, the narration enthralled me in a way that reading had not.

Douglas Hubbard became interested in the idea of measurement and its challenges as a young consultant and some years later wrote How to Measure Anything. He had regularly heard the protest, “We can’t measure that” during project meetings. Rather than buy into that mindset, he challenged the whole idea that intangibles could not be measured and in the process, developed a whole new field of knowledge about the value of information. Throughout the book, he gives numerous examples of measuring tangible items and intangibles — nearly all that were previously believed to be unmeasurable.

Hubbard has seen the most egregious “We can’t measure it” protests coming from IT departments. Regardless of the size of your company or organization, you are probably aware of any number of large-scale IT projects that were blessed and funded but never brought the promised benefits or maybe failed horribly. The Van Tharp Institute had one of those a few years back, and we are not even a large company. Since he wrote the book, Hubbard seems to have specialized in measuring return on investment and other success metrics for IT projects and cyber security.

Hubbard’s case studies and methods to measure intangibles are fascinating. I was also intrigued by the ways that his methods apply to trading.

A Few Measurement Examples

  • Fish Population — To estimate the number of fish in the pond, catch a bunch of fish, tag them and release them. Then capture more fish in the same exact way as the first bunch and by using the proportion of tagged to untagged fish in the second catch, you can come up with a reliable estimate for the number of fish in a body of water.
  • German Tank Production During World War II — Allied intelligence estimated how many tanks the Germans were producing but really, they had no idea. Posed with the problem, a group of statisticians developed a new sampling method using the only real information they had — serial numbers from tanks that had been captured. The statisticians’ estimates for tank production turned out to be very different than the intelligence service numbers and they also turned out to be remarkably close to the actual production figures (confirmed after the war).
  • Forecasting Fuel for US Marine Corps — Hubbard helped the US Marine Corps improve their battle planning process. Previously, the service had used a very safe (large) number for the fuel units needed and the related resources to provide that fuel. By measuring fuel consumption on trucks over various paved and off-road conditions (which had never been done), Hubbard’s consulting team came up with a fuel consumption model that allowed the Marine Corps to cut its fuel usage estimates dramatically yet safely, save money, reallocate resources, and in the end save lives.

A Few Takeaways

Here are just a few of the takeaways I found reading the book. Some were brand new ideas while others confirmed previous learnings —

  • When you have a lot of uncertainty, you don’t need tons of data to reduce that uncertainty. Even a small sample can be highly valuable if that’s all that’s available or affordable.
  • Labeling risk as high, medium, and low is ambiguous and probably harmful to decision making processes. Providing very simple quantifications to those terms is actually a huge improvement.
  • Confidence intervals are close enough to probabilities that practitioners (traders) can use them interchangeably. For example, some figure at a 95% confidence interval effectively says that figure has a probability of 95%.
  • Monte Carlo modeling is a very useful and typically underutilized decision tool.

Perhaps the biggest distinction the book provided was that measurement does not mean counting. Hubbard’s definition —

Measurement — a quantitatively expressed reduction of uncertainty based on one or more observations.

So measurement is a process rather than a static nominalization — which expands the usefulness of measurement a great deal. As a process, measurement does not eliminate uncertainty but reduces it. The idea of eliminating uncertainty (relatively speaking) with enough measurement (perfect information) may be possible but for most decisions, there are costs associated with collecting incremental information. This new area — Information Economics - looks at the costs and benefits of gathering more information and if or how additional measurements help decision makers.

Application to Tharp Think

Actually, How to Measure Anything relates to many Tharp Think principles but Hubbard’s core concept of reducing uncertainty struck me as applying very well to this one — “I meet my objectives through position sizing strategies.”

This principle has several assumptions and Mr. Hubbard’s ideas fit in well with them —

  1. You have “good” objectives. Good here would include: written down, quantifiable, complete/robust, and they fit you. Those are all about reducing uncertainty about what you are trying to accomplish, about why you are trading.
  2. You know how your system performs. You can reduce uncertainty about your system’s performance greatly in two main ways — following rules and measuring performance by market type. Obviously, gathering a large sample size of R multiples in a particular market type is very useful. Also useful — calculating your system’s SQN score. These practices reduce uncertainty about what a trading system will generate when you trade it in the future.
  3. You understand position sizing strategies. They answer a quantification question, “How much to risk in a trade?” They are modified for each system’s R multiple distribution. One of their primary functions is to provide a solid level of confidence that you will not blow up your account.

Hubbard can also help us understand one or two logical conclusions of this Tharp Think principle:

  1. You need well-crafted position sizing strategies to help you reach your objectives. Well-crafted position sizing strategies help you achieve the returns you seek and avoid the drawdown level you are unwilling to tolerate. Well-crafted position sizing strategies cannot guarantee some result (imperfect information) but they can greatly reduce the uncertainty about the range of ending results you can expect in your equity.
  2. You need processes to define good objectives and craft effective position sizing strategies. Again, the processes will involve some measurement and will greatly reduce the uncertainty around each item. These processes might include some modeling and at least for the position sizing strategy development, Monte Carlo simulations can be very useful


Like those before me, I would recommend traders read Hubbard’s book, now in its third edition. If you are an audiobook fan, you might find that format more interesting though the printed book contains numerous charts and diagrams which aid the text greatly. In an article like this, you can only get a very superficial idea about the concepts Hubbard presents in over 300 pages but hopefully, you can see how his ideas apply to trading topics generally — and to some Tharp Think principles specifically.
Oneness Awakening is Only 10 Days from now! July 8-9, 2017

Spend a weekend with Dr. Tharp using some of the most powerful transformational strategies he has found over the last thirty years. Plus, if you are interested in applying to the Super Trader Program and obtaining special discounts in July, this is a qualifying workshop. This two-day transformational workshop is the last opportunity to take a prerequisite workshop before the upcoming price increase.
The Role of This Course and The Super Trader Program

If you are interested in applying for admittance to the Super Trader Program, this workshop is a qualifying event. The first stage of the Super Trader program is very much about working on the self, rather than working on systems or trades. Since this course focuses on your inner-growth and self-work, Dr. Tharp is willing to allow candidates to use the course in a similar manner to those that attend the Peak Performance 101 workshop, and motivated traders are able to apply to the program after attending either one. At $495, this course is also the most cost effective way to take a qualifying workshop to apply to the Super Trader Program.

The price of the Super Trader Program will increase after July 31, 2017. This is the last qualifying workshop before the price increase.

Reach A Higher Level of Consciousness: A Special Event With Van Tharp
How could a higher level of consciousness help a trader? Most people have had the experience of watching someone who is really great at what they do. Whether it's a sports star in the game or a masterful craftsman, there is an element of effortlessness that comes from their ability to be "in the moment." Many people have had this experience themselves, in some aspect of their lives — for a few seconds or even a few minutes. The moments may be fleeting, but you know when you've had one. It's at these times when we can recognize these people are in a high state of awareness. 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, and to cultivate this awareness in your day to day 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. Why? Because the person themselves are always the primary instrument, even before the technical skills of trading are engaged. Just like the athlete with impressive skills, traders can also utilize the phenomenon of tapping into their awareness to achieve premium results. Keen awareness, in turn, opens up new possibilities. Another great thing about the concepts and experiences in this course is that 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!

If you would like to know more about this workshop, or talk with someone to see if this workshop is right for you, we invite you to call or email Rebecca Price. Rebecca is a certified Oneness Trainer. She has been teaching with Dr. Tharp for 3 years, and is enthusiastic about helping others to dive into their own transformation. Call 919-466-0043 or email [email protected].

Or Register now. The price is low, the quality is high and the experience is priceless!

Workshop Schedule

July 2017
August 2017
Dr. Ken Long begins his Day Trading Systems workshop by teaching you two day trading systems called the Frog and RLCO. Through his action-packed lectures students will gain an understanding of each system’s beliefs, rules, and variations.

Ken has been a long-time active trader and observer of the markets. He's noticed the consistent habit of prices for particular issues to move a certain amount. Much like a frog jumps when it hears a loud noise, prices tend to move a certain amount before they pause or move again. Different frogs are able to jump different distances, but each one tends to jump about the same distance as it did last time. Would it be possible to know about how far a stock’s price would move on any given day?

After attending this three-day workshop you qualify to stay on and live trade these same systems for the next two days alongside Ken. Plus attendees will receive follow up assistance in Ken's ongoing Chatroom for Traders.

Special Bonus: Free Membership in Powerful 'Chatroom' Plus Three Coaching Calls

Inspired by the powerful networking Ken has seen develop over the years at VTI, both through the Super Trader program and workshop attendees, he created and leads a group of traders with a shared interest in swing trading and intraday trading which he calls the Chatroom.
Ken and his chatroom members have been developing a daily community of practice to encourage a healthy and helpful environment to support each members' development as a trader.
And, as a way to maintain the spirit of cooperation experienced at the workshops after you are headed back home, you get free membership and access to this chatroom forum. And while this membership is free to workshop attendees, the value of this ongoing interaction and learning is likely as valuable the workshop itself.
Announcing An Exclusive New Trading Workshop:
Sideways Market Strategies
Profit When Price Goes Nowhere:
How to Successfully Trade Sideways Markets In Every Time Frame
Kim Andersson covers a few objectives of the new Sideways Market Strategies course in this short video above.
Did you realize that no matter what time frame you trade or what method you use to measure them, Sideways markets happen between 59% and 65% of the time!

And yet scant attention is given to this market type. When you encounter them the task of trading becomes much more challenging, stressing your systems and your psychology beyond your normal comfort zone. This new workshop is the antidote to this under appreciated, and least understood market type.

As an extra added bonus, Kim Andersson has agreed to provide additional support to all Sideways Market Strategies attendees for the remainder of 2017! This is no small offer. Your class will get four monthly calls (1 hour each), as well as ongoing email support for months after the workshop. She will offer her feedback and expert guidance for any sideways trading issues you may have for the rest of 2017. This way you know that you can be fully prepared to trade in Sideways conditions and get your follow up questions answered.

September 2017
October 2017 LONDON, ENGLAND
November 2017

The Super Trader Summit is in December, dates to be announced.


If you still haven't listened to our first podcast, RJ Hixson interviews William Costelloe who is a professional trader, a member of the Super Trader program In this half hour podcast, he talks a little about his background, some of the reasons why he decided to enroll in the Super Trader program, and some of the benefits he has gained.

Click below to listen to this very interesting interview from a couple of weeks ago. More to come in the future!
Episode 1
Super Trader Journeys
If you've ever wondered what it is like to be part of Van Tharp's Super Trader Program click on the short 4 minute video below to hear more about what our students have to say about their Super Trader journeys.
Super Trader Journeys
In the article written by Van, Why I Love What I Do and How I See The Future of VTI, Van said:

I plan to continually look for new things to model to help people become more successful traders and investors. And what we are working on now is doing everything we can to make the Super Trader Program, which I think is already unique and the best in the world, even better...We have about 10 open slots in the Super Trader Program for 2017. We’d like to make sure that everyone who wants to join this year can get in at the current rate, which goes up after July 31st. Right now the price of the program is $52,500 for the first three years. It will go up to $60,000 for the first three years in August 2017. As a result, for those who qualify*, we are running a one month special on the program.

Now through July 31, We Have The Following Specials:

  1. A lump sum one-time payment of $50,000 (less applicable discounts**) will save people $10,000 over the new price.
  2. Three installment payments six months apart for the current price of $52,500 (less applicable discounts**) will save people $7,500 over the new price. This payment option spreads out the cost over a year and a half period — which I don’t do normally.

* To qualify for the ST program, applicants have to first attend one of these workshop — either Peak Performance 101, Infinite Wealth, or the Oneness Awakening Weekend. This allows me to personally assess your openness to the psychological part of the program and to gauge your level of commitment. To enroll in Super Trader before the August 1 price increase, only one workshop remains to qualify you for the program — Oneness Awakening on July 8-9. ** Previous purchases from VTI reduce your total cost of the ST program. In some cases, you can receive a credit for 100% of certain purchases! If you'd like more information or specific amounts please email [email protected]

For more information about the program click here.

Trading Tip

A View from the Bear Side — The First Chink in the Armor?
by D.R. Barton, Jr.
It’s almost always prudent to temper your confidence in your analysis with a realistic appreciation for the opposite point of view.

Back in my days as a chemical engineer with DuPont, I learned that project management wasn’t just about managing “nuts and bolts” of projects but also included a healthy dose of “managing my managers”.

When presenting an aggressive schedule for a project, I would also always list mitigating factors that could delay the schedule. If approvals were not received on time from management or from outside agencies, that could delay a project. If vendor delivery problems hit one of our rate-limiting project steps — those could set us back. And so on.

As readers of my recent articles know, I have been debunking on a regular basis the bears and perma-bears who dislike this bull run. That said, we now have circumstances that could signal the start for a viable bear move. While I think this particular bear play has a lower probabilty, I’d still like to give you one simple “what to watch” factor on how the bullish scenario continues to play out from here — or does not.

The Potential First Chink in the Bullish Armor

First let me say again — I fully believe there’s very little chance that the market starts a nose dive from here. As I’ve written before, markets just don’t turn immediately bearish from all-time highs. Rather, they make rounded tops over some period of time. To do that now after just hitting new all-time highs on June 19th, the market would have to make a series of lower highs. One technical signal just triggered and bumps up the probability that we have now seen our first lower high, the first lower high in a long time.

How long has the Nasdaq bull been running at its current pace? Well, it just set a new record for consecutive days above its 50-day moving average. The previous record was 130 days as we see in this table out together by Charlie Billelo at Pensionpartners.com:
Since this was published almost two weeks ago, the Nasdaq extended its streak to 138 days before finally closing below its 50 Day moving average on Tueday (6/27):

So What?

A very low VIX (volatility index) still supports strong market breadth and robust global equity momentum so a turnaround from bull to bear market — right now — is a low probability scenario for me. But Nasdaq’s breach of its 50 day MA is the first technical sign that could give the bears something to shout about. Before we start listening to any shouting just yet, let’s watch first how the market responds in the coming days and weeks.

Your thoughts and comments are always welcome - please send them to drbarton “at” vantharp.com

Great Trading,
D. R.

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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.
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