#856 September 20, 2017
  • Feature: How to Shift Your Paradigms; Paradigm Shifts Part III, by Van K. Tharp Ph.D.
  • Workshops: Forex Trading Systems Coming this November!
  • Tips: Markets Are Not Worried About the Fed — Yet, by D.R. Barton Jr.
  • FREE BOOK!: Trading Beyond the Matrix
October Workshops
Attend all three London workshops to qualify for an additional $900 discount!
(In addition to the early bird discounts.)

New Combo Discount on Forex!
Attend the three-day workshop and deduct $500 off the price of attending Live Forex Trading.

Feature Article

How to Shift Your Paradigms
Paradigm Shifts, Part III
by Van K. Tharp Ph.D.
In this three part series, I will explore the idea of major shifts in your thinking and your mental maps of the world. One of the steps to making big changes in your life is to make paradigm shifts — or shifts in your lateral thinking. This means to get out of the box you are in (your perceptual limitations from your current perspectives) and determine what is possible from other perspectives. If you understand the power of paradigm shifts, you can begin to understand what it is to be a genius. You can accomplish what seems like miracles.
The purpose in writing this series of articles has simply been to get you to think and step outside of your own perspective. In Part One of this series, I presented the idea that one of the steps to infinite wealth is to make paradigm shifts. This means get out of the box you are in (your perceptual limitations from your current perspectives) and determine what is possible from other perspectives. In Part Two, I have outlined five major paradigm shifts from which most traders and investors would benefit.

Today I will tell you how to make your own paradigm shifts. One of the greatest skills I can give you is the ability to make your own paradigm shifts -- to look at the box you've put yourself in by your thinking. Once you have done that, then you can step out. For those of you who would like maximum benefit and are really willing to "go for the moon," here is a five-step program for creating your own paradigm shifts.

Step 1) Examine who you are and what you are doing from multiple perspectives. NLP (Neuro Linguistic Programming) suggests that there are at least three perspectives of every event:

  1. Your perspective,
  2. the perspective of another involved person, and
  3. the perspective of an outside observer watching what is going on.

A simple way you might work on this shift would be to take the perspective of an outside observer and just replay each day, at the end of the day, from the outsider’s perspective. If you were to continually observe yourself from perspectives two and three, then amazing changes will occur in you and you will be able to jump out of your box very soon.

Step 2) Examine your beliefs. Your beliefs might form a set of concentric circles. In the very middle are the beliefs that you know are true. Around that are the beliefs you think are true. The next circle contains beliefs that might be true. The fourth circle contains the beliefs about which you have real doubts, things on the fringe — maybe like the existence of ghosts or UFOs. The final outermost circle are the beliefs that you know are not true.

Most people tend to spend their lives rejecting beliefs on the outside circle. There is even a journal called The Informed Skeptic which devotes itself to debunking fringe beliefs. While I'm all in favor of questioning fringe beliefs, I think the most limiting and damaging beliefs are probably in the inner circle—those we know to be true. Many people look for lots of supporting evidence in an effort to defend these beliefs. Spend time questioning these beliefs and you'll begin to make major paradigm shifts. In fact, try questioning one or two of your major assumptions about life that you know are true. About what are you absolutely certain? What would life be like if the assumptions underlying that belief were not true? Questioning of this sort is what would be most profitable and evolutionary for most people.

Step 3) Notice your projections. What you see "out there" really reflects what is going on inside of you. This belief has deep psychological underpinnings and it is true for me, however, for most people, it is on the "fringe". If you operate as if the world is a mirror to your own mind, then you will really begin to find the boxes you have put yourself in. Once you are able to identify a box you are in, it is a simple step to get out of the box and make a paradigm shift.

Step 4) Keep a daily journal of your emotions and experiences. One of the best ways to observe yourself is to look at the way you were at some prior point in time and to compare that version of you with another version. By writing in and reading your journal on a regular basis, you will really help yourself identify paradigms, observe them, and then be able to step out of them.

Step 5) Meditate regularly. Meditation is all about listening. Listening provides you with intuition and immense guidance. As a result, twenty minutes of quiet meditation is probably the best thing you can do for yourself. For a simple way to meditate, just pay attention to your breathing for twenty minutes. Think of breathing in as "inspiration" - for it very well may be that. As thoughts come to you, simply notice them and let them go. If you notice you have become stuck in your thoughts, just let them go and return to watching your breath.

These five steps should help you to make immense paradigm shifts on a regular basis. Plan to do them for the next 30 days and let us know your results.

Workshop Schedule

October 2017 LONDON, ENGLAND
Peak Performance 101 is Dr. Tharp's core psychological workshop, and his most transformative course for over 25 years. If you want to know how great traders think, behave and act so you can achieve consistent and profitable results, without stress, then this workshop is for you.
Workshop Objectives
Check out this brief overview video about our Peak Performance 101 Workshop from Van.
We'll teach you one of the real secrets of success — how to use all the system building blocks to design a trading system in such a way that it fits your personality and style of trading. In the process of learning how to do this, you'll probably come up with dozens of winning systems that will work because they'll be based on criteria that fit your situation.
Workshop Objectives
Instructor RJ Hixson expains what this course will cover in this five minute video.
Van shares years of knowledge about wealth concepts, wealth creation modeling, being wealthy inside, and the infinite wealth processes. Attend this workshop and completely reshape your attitudes toward money, work, paychecks, income, wealth, scarcity, and abundance. Your paradigm shifts in just three days will amaze you and release you from your current beliefs about wealth that have been running in your unconscious and holding you back.
Infinite Wealth
Watch this brief 2 minute video to get an insider's look on attending this workshop.
November 2017
Learn to Trade Three Forex Trading Systems with an Edge

Gabriel will be teaching three robust Forex systems based on trend-following. Each system is based on similar “ingredients,” but each has a different recipe to capture a different part of the trend. Consequently, the systems are complementary to each other and together offer several trading setups nearly every day of the year.

Join us for this three-day workshop and leave prepared to trade the systems right away. Plus, join us for 2 days of live Forex trading so you can trade the systems live for even more hands on experience!

Special price offers:

  • Start your study early. Order the Forex Home Study Course now and walk through the door with a thorough understanding of the Busted Breakout (System 1). Home study buyers get $600 off the price of the live workshop!
  • Combo discount: We have never before offered a combo discount on the live portion of the Forex training. But now, for a limited time, when you register for both November events you'll get an extra $500 off on live trading. Learn More...

More about Forex
Learn more about what it's like to attend Gabriel's Forex workshop by watching this brief video featuring some of our past students.

The Super Trader Summit is in December.

Trading Tip

Markets Are Not Worried About the Fed — Yet
by D.R. Barton Jr.
For more than two months, I’ve been talking with you about the coming “Great Unwind” and the Downfall of the Easy Money Market. I’ve also been telling you to keep your eye on September 20.

Seems like we were ahead of the curve… On Tuesday morning, I can’t turn on a TV or open a newspaper without hearing people shout about the same issue we’ve been talking about for months. The Wall Street Journal’s front page headline trumpets:

“The Fed Braces for the Great Unwinding”

And the wsj.com’s top online story is:

“The Fed is Braced for the Unwinding of Easy Money”

It’s like they were reading our emails from back in July and August…

Yesterday and today (Sep. 19+20), the Federal Open Market Committee (FOMC or simply, the Fed) met and was widely expected to announce the beginning of what I’ve dubbed “The Great Unwind” – the gradual reduction of the Fed's $4.5 trillion balance sheet. Not only does the media agree (finally!) that this is a big deal, the market thinks so too but the signals are very subtle. Let’s talk about what’s likely to happen and what our plan of action should be.

The Fed’s Game Plan

The Fed has done a surprisingly good job telegraphing what it plans to do in order to “normalize” or unwind its balance sheet. Telling the market what it plans to do months before it was ready to put the plan into action has given the market time to digest the idea. We have known what the Fed was planning to do, just not when.

Let’s step back for a moment and remember how the Fed’s balance sheet became bloated. During and after the global financial crisis, the Fed provided multiple “monetary injections” to the economy from 2008-2014. After all of that, the Fed balance sheet contained $2.4 trillion of U.S. Treasury bonds. That’s a whopping 17% of the market. In addition, the Fed holds $1.7 trillion of mortgage bonds for an even bigger 29% share of that market.

The Fed actually stopped buying net new bonds of either type in 2014 – but the balance sheet has remained bloated since then. How? Both asset classes have bonds that have been expiring since 2014 and as the bonds have matured, the Fed has used the proceeds to repurchase an equal amount of like bonds. The Fed has simply replaced maturing bonds and maintained the ultra-inflated level of its balance sheet.

To reduce its balance sheet now, the FOMC has announced that it will not actively sell its assets (bonds) but rather they’ll repurchase fewer bonds than those that mature. When it decides to pull the trigger, the Fed has told us that it will reduce its reinvestment of maturing bonds by $6 billion of U.S. Treasuries and $4 billion of mortgage bonds per month. Then every three months, this $10 billion per month reduction will grow by another $10 billion per month until the reinvestment reduction cap reaches $50 billion per month.

The Fed hopes that the combination of selling no bonds back into the market and the phased approach of reducing expiring bond repurchases will create a “soft landing”. In short, the Fed would ideally like “The Great Unwind” to be very boring.

So that’s the Fed’s announced plan should it decide to stick to it … but the market may have other ideas as we’ll see in the last section below.

What to Expect from the Fed’s Announcement

There’s universal agreement that the Fed wouldn’t raise interest rates today (Wednesday, September 20, 2017). In fact, the Chicago Mercantile Exchange FedWatch Tool shows only a 1.4% chance that the Fed will raise interest rates by 25 basis points (or ¼ of a percentage point):

In addition to keeping the interest rate where it was, most analysts expected that the Fed would announce a start date for “The Great Unwind”. As I discussed above, $10 billion of bonds allowed to “mature out” per month from a $4.5 trillion balance sheet will make no waves in the market. We start this whole process with something that could instead be called “The Barely Noticeable Unwind”… and that’s why the market hasn’t reacted in a negative fashion. But traders and investors are less calm about the intermediate term outlook – they seem to think that the current quiet market demeanor will be short lived.

The Market Still Believes Volatility is Coming

We’ve talked before about the Volatility Index that measures market volatility – VIX for short. This indicator has also been dubbed “the fear index” because it is low when the market is complacent and grows higher when fear and uncertainty rise. Right now, you can see how volatility has been low to start with and has been dropping before the big Fed announcement:
The VIX measures the volatility that traders expect over the next month or 30 calendar days. It does this by calculating the changes in options premium that traders are required to pay for near-term options. Right now, traders expect quiet conditions for the next thirty days.

There is, however, a virtually unknown measure of volatility which tells a far different story. A lesser known index measures traders’ expectations of volatility three months into the future. And what does that index show? Traders are paying a much higher premium for options that expire three months from now than for shorter-term options.

In short, the chart below shows that traders expect volatility to return in the next two to three months with a vengeance. In fact, this ratio of short-term to intermediate-term volatility just peaked to the highest level it has seen since 2012. Take a look at this chart that tracks the ratio between one month and three month volatility:
The Bottom Line

While the Fed probably didn’t make any market moving announcements, traders are betting that big changes in volatility are coming. And we’d best be ready, too.

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

Great Trading,
D. R.
NEW E-learning Course!
Forex Trading Systems: The Busted Breakout System
Click on the image below to watch a brief 1 minute video that hightlights this new course.
Gabriel developed and refined his Busted Breakout system on the concept of trend-following while he was still enrolled in the Super Trader program.

The system has a high win rate (about 65%) and it takes advantage of a price pattern that happens again and again in the charts — breakout failures. The main advantage of this is that it benefits from running for other peoples’ stops. This is a unique edge of the system making the trade break-even early on. Watching 15-minute charts for 4-6 hours a day and trading only the biggest, most liquid currency pairs, the system finds easily more than 150 trades per year. The pattern works equally well on 5min, 60min and 240min charts so the trade opportunity per year can be much higher depending how you trade. Gabriel is confident that someone with the programming skills could turn the system into a well-performing automated trading system.

The three-day workshop cost is $3,995 but the cost of the home study program is $1,295. As a special introduction price for early responders you can get this new home study for just $995.
Plus, buy the home study now and if you decide to join us at the 3-day Forex Trading workshop in November (or for any Forex workshop in the future), you can deduct $600 off of your course payment for the workshop.
This is win-win for all! If you are among the group of clients who simply cannot come to one of our workshops this home study offers you the benefit of still gaining access to a robust and premium forex trading system. Gabriel has traded it himself in several timeframes for many years now offering a persistent edge in the market.
But, if you have already been considering attending the workshop this is a great way for you to get a full-steam head-start and walk through the workshop door already understanding the system well. You will then have the opportunity to ask Gabriel anything you need. And in addition, learn two new Forex trading systems. The three systems taught in the workshop all offer unique advantages. They complement each other giving you the opportunity to reap various stages in a trend.

Learn More About This Course...or Buy Now!

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The Red Pill for Traders and Investors

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Cary, NC Workshop Information
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