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  • Feature: Cryptoassets Update as of October 16, by Van K. Tharp, PhD
  • Workshops: Day Trading Systems Bonus Offer Valued at Over $1,500!
  • Tips: An Update On Bakkt: The Key to the 2019 Bull Market in Crypto Assets, by Van K. Tharp, PhD
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#912 October 17, 2018
A Brand New Workshop Offering Both
On-Site Attendance AND LIVE Streaming!

Recordings Available for Live Streaming AND in-person students!

This 18 minute video below explains more about the workshop.
Reeds Trading System
Introducing the REEDS Stock Market Trading Course This new, 2-day workshop featuring Super Trader, Chuck Whitman and Mark Boucher (author of The Hedge Fund Edge), will teach a consistently profitable and longer-term trading strategy known as the REEDS Trading Methodology.

  • Would you love to trade with a system that reliably makes money regardless of whether the market was going up or down?
  • How about if that system could juice the returns in your retirement accounts without worry of large drawdowns in the next Bear market?
  • And what if that system, in a few minutes each week, could help you identify the best five stocks to trade?

Chuck Whitman has been in Van’s Super Trader program for years and has talked and worked with many of Van’s Super Traders. Market and Strategy selection is an area that he has seen so many traders struggle. This is what Chuck says about this new workshop:

"I BELIEVE THIS IS THE BIGGEST AREA WHERE IMPROVED GAINS CAN BE FOUND. The REEDS System reduces your focus from 10,000 trade ideas down to the five best."

The system can help you tap huge potential gains regardless of your trading performance so far. The REEDS system is simple enough to be learned by novices and can be executed in minutes per week. It also can be rapidly adopted by experienced professionals, adding a dependable edge to their trading process.

In just two days, novice and expert alike will come away with a high-powered trading system that can be used in any kind of account.

Two Options to Learn:
For the first time ever you can either attend this dynamic workshop in person or you can LIVE STREAM this event.

Of course attending in-person gives you a chance to not only interact with the instructors but also meet other like-minded traders. Trading can be a solitary pursuit and our students often tell us this is a powerful advantage to attending a workshop in person.

But live streaming the event is the next best option! Many of you have asked for streaming options and now is your chance. You can be among the first group to take advantage of this option! When you click below to learn more you will find more details on this option.

The price for either in-person or streaming is $1,500. This is bargain price for the information you will receive.

25% Discount

However, If you register by November 1, you can attend or stream this workshop for only $1,150.

You will want to click here to read both Chuck's and Mark's story and get a day-by-day agenda of what you will learn. Plus, this link will take you to registration options!

Feature Article

Update on Cryptoassets: October 16th
by Van K. Tharp, PhD
Van Photo
In May 2018 Bloomberg announced that they had formed a cryptocurrency index, which is significant for a few reasons. First, Bloomberg only caters to institutional clients so their index is their first step to widespread institutional involvement.

Secondly, either in 2018 or early 2019 we will see ETFs for both BTC and ETH. Chances are Bloomberg’s index will form the basis for a cryptoasset index based ETF in the next two years. In that same time period, we are also going to see the SEC end its war with ICOs and end its argument that anyone raising capital with the promise of a profit is selling a security. In addition, the SEC will allow regulated exchanges for cryptoassets to open sometime in the next two years. After that, institutions will move significant assets into the cryptoasset markets and the eventual market cap will probably be in the neighborhood of 20 trillion dollars.

I’m in London now and I just heard that the British expect to take at least two years to sort out their laws and regulations around crypto assets.

In the meantime, while I haven’t heard any new information, big news should be coming out next month. November 2018 was the target for Intercontinental Exchange (ICE), which is the firm that owns the NYSE among many other exchanges to come out with its institutional platform for cryptos called Bakkt. ICE is developing Bakkt in conjunction with Microsoft and Starbucks. Institutions typically cannot hold their own assets, someone else has to hold them for them. There are also all sorts of issues around security etc. that have to be overcome.

Most institutions would love to have some exposure to cryptos because they are totally uncorrelated with other assets, such as equities. In addition, they give the potential for huge gains, which is exactly what pension funds have been looking for in their portfolios.

Now let’s take a look at the Bloomberg Index, the Bloomberg Galaxy Crypto Index. The index tracks ten major cryptoassets: Bitcoin (BTC), Bitcoin Cash (BTC), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), EOS (EOS), Ripple (XRP), and three privacy coins DASH (DASH), Z-Coin (ZEC), and Monero (XRM). They started the index in May at 1000. It reached a high of 1020.73 on May 4th but the index shows a clear downtrend and it’s probably dangerous to invest in the asset class until we at least have two months of stable prices.

Here is a graph of the index to date — Last month the index was at 399.94. This month it is slightly higher at 435.01. Two straight up months might be a good buying signal. In fact the index has been fairly flat for several months.
CU Chart 1
Bitwise also has opened a HOLD 10 private index fund that you can actually invest in. The only difference between this index and the Bloomberg Index is that the Bloomberg Index holds Ethereum Classic (ETC) while Hold 10 has Stellar (XLM).

Cryptocompare also has an index of ten coins and it includes, Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Stellar, Dash, Cardano, and Tronix. So here Cardano and Tronix are different.

The table below shows Bitcoin, a 1st generation crypto asset, plus two second generation crypto assets ETH and NEO, and two third generation crypto assets (Iota and Skycoin). BTC is basically just a ledger whereas Ethereum and Neo both enable smart contract execution based on the ledger. Finally, IOTA and Skycoin are important because they combine smart contracts with huge scalability and zero transaction cost. Just because a crypto is third generation, however, doesn’t mean it will survive and dominate earlier cryptos. I’ve also added the prices for these coins on Jan 15, 2017 to put the current crash into perspective.
CU Chart 2
Date of the All-Time High Closes
*Dec 16, 2017 ** Jan 13, 2Sept018 ***Jan 15, 2018 **** Dec 8, 2017 ***** Dec 29, 2017

You will notice that the only coin to go down over the past two month is ETH and it’s up over last month. ETH is still a special case because of all the other coins produced on the Ethereum network that are having problems.

I have also added a second table, which includes the market cap for cryptoassets, the percentage of Bitcoin of the total market cap, the percent of market cap for the top five cryptocurrencies, and the number of cryptocurrencies listed.
CU Chart 3
* Bitcoin was as high as 90% of the market cap of all cryptos at the beginning of 2017 to as low as 32% at the top of the market. Part of the difference is that there are now nearly 2000 cryptocurrencies. SO the number keeps going up even though the market cap goes down.

** This was the peak of the crypto market in terms of market cap. Data via Tama Churchouse, Asia West Investor email on 4/11/18

The data in both of these tables comes from now lists 2085 cryptos, but it only gives a market cap for 1669 coins. The lowest ranking being for Harmony Coin at $259. Probably everyone reading this could afford to buy the entire supply if there is a market for it.

Notice that the market cap on October 16th has fallen over 70% since January 8th when we first started doing the crypto monthly update.

Yahoo Finance now lists prices for about 100 cryptocurrencies so I can run some of my normal studies on the data. I’m only looking at those coins for which there is at least 100 days of data — which does not include every crypto in the top 100 list by market cap. However, we have not updated the number of cryptos since we started.
CU Chart 4
This month three cryptos, including Veritaseum, from last month, have an SQN 100 over 1.0 and all the top 15 coins have positive scores. BTC, XRP, XLM, OX, and Zen (all major coins) are now positive. We are in a strong bear market for cryptos but the indices being flat for several months and all 15 top cryptos being positive is a major improvement from most of 2017.

We will have to see if this is another “dead cat bounce” or a sign of the end of the bear in the crypto market

I recently saw that Fidelity would be opening up a crypto desk for institutional investors in 2019. So this again is more news suggesting that 2019 could be a huge bull market again.

Cryptos are generally hated and big money is trying to take the market over by scaring people out. Generally, they are doing a good job because this is a very strong bear market. When the institutions believe they have sufficient control and size of the market, they will let the price rise and you can expect to see the first Bitcoin ETF. People will get excited again at that time. See the other article with this month’s update for what is really going on in the crypto universe.

In my crypto market model, I have a different listing for the top 15 and the bottom 15 cryptoassets. The table above uses Yahoo data and the table below uses data. In the next few months, we expect to integrate this information, but for now I’ll just report both sets of data separately. However, it will probably take some time as Coinmarket cap now wants to charge $700 to use their data, so we will switch to another source.

Notice that our second listing also has all 15 coins with positive numbers. However it has one coin, ETP with a score of 2.81. This is strong bull and five more coins with SQN 100 scores over 1.0.
CU Chart 5
We have also classified the coins by type. We expect to improve in time this very preliminary version.
CU Chart 6
There are also a number of new coins that might be called stable coins, meaning they represent a Fiat currency that is fairly stable. Not enough yet that major crypto exchanges are using them, but enough that by some time in 2019, there will be an exit strategy for cryptos into stable coins that probably can be trusted…unlike Tether which has no proof that it is really backed by the US Dollar.
CU Chart 7
This month there are only two reds in the chart. Two are actually positive (yellow) and most of them are now brown. This again is a big change but by no means a bull market.

As I have said before, the blockchain is an institutional revolution, not a technological revolution. Right now institutions determine value and have all the power. Blockchain technology is likely to change all of that by allowing decentralized groups determine value. Institutions (and here I include big countries), however, will not give up there power easily. Right now, there is a conspiracy going on to keep prices down so that big institutions can accumulate as much as possible while they scare the average guy out of the market.

Bottom Line

  1. I don’t know what Bitcoin is going to do for the rest of the year. But I would guess the next Bull Market will probably start when ICE comes out with its platform for institutional investors to be able to buy cryptos. That is supposed to happen next month.
  2. I don’t like BTC because it is too slow to send, too expensive to send, and it it’s currently using up about 1.5% of the worlds electricity and this will get much worse. But I still wouldn’t be surprised to see it have a $50K plus valuation soon.
  3. I don’t know if the second and third generation crypto assets (Iota and Sky) will be the primary vehicles of the future. If they survive, I’m sure there will be lots of changes through forks.
  4. I am convinced that blockchain technology is absolutely here to stay and that the revolution taking place will be the biggest in my lifetime. It will change everything.
  5. One commentator on cryptoassets says decentralization is an absolute must for any cyptocurrency. This is true if it is to meet its long-term goals and become an institutional revolution. But remember that in the near term institutions will try to take it over and lack of decentralization will actually be a plus for them.
  6. 2018 is currently a difficult year because of lack of clarity around cryptoassets’ status. To some agencies, they are a form of security. To the IRS (and most national taxing authorities), they are property, which means a tax event occurs as soon as you sell any. For example, if you use a bitcoin debit card to buy coffee, you have just created a tax event. Cryptoassets need the $600 exclusion rule that applies to FOREX before it can become a major alternative to other currencies.
  7. In addition, while crypto projects are in their infancy and these small companies have to deal with the SEC, it will be difficult for them to explode into broad adoption. Huge legal issues hamper innovation.
  8. There will be ETFs for both BTC and ETH at some time in 2019. When that happens, their prices will explode and the crypto market in general will take off big time. Yes, the SEC has turned now numerous requests for an ETF, but it will not turn down the CBOE request that will be coming soon.
  9. I’ve offered to help my staff create their own crypto portfolio but most are reluctant to do anything. Only my personal executive assistant and one other staff member have set up one.
  10. It’s getting really close to the time to set up a crypto-asset portfolio. If ICE does come out with its platform next month that will be the start of the next bull market.
  11. Finally, many of the best traders/investors in the world became that way because of a huge edge and because they were the in the right place at the right time. Cryptoassets offer that kind of edge.
  12. We are holding a special workshop for the Super Traders at this year’s summit so that they can participate in this revolution. And I’ve lowered the requirements for them to attend.

Until November update, this is Van Tharp. That update could be exciting.

The purpose of this report is to just give you a status quo of the cryptoasset markets. It’s not meant to give recommendations or be predictive in any way.

Feature Article

An Update On Bakkt:
The Key to the 2019 Bull Market in Crypto Assets

by Van K. Tharp, PhD
Van's Photo
Few people probably know that Intercontinental Exchange, which owns the New York Stock Exchange along with a number of other exchanges, is hard at work developing an institutional platform to trade cryptocurrencies. The name of the platform is Bakkt and it’s rumored to start in November 2019.

First, the exchange is working in partnership with Microsoft and Starbucks. The platform will be cloud-based which is where MSFT technology and expertise come into play. In addition, Starbucks is involved in helping currencies like BTC be accepted as payment at numerous retail outlets.

When this exchange starts trading it should not only be the end of the bear market in cryptos, it will also be a huge stimulus for the market. It would surprise me to see BTC at $50K to 100K by the end of 2019 and that gains from other cryptos will dwarf that. In 2018 the cryptoassett market cap had gone down to about $200 billion from $800 billion. With these new developments, we could see the market cap at 3-4 trillion by the end of 2019.

So what is known about Bakkt, the CEO is a woman, Kelly Loeffler. In addition, she has recently hired Adam White from Coinbase to be the Chief Operating Officer. Bakkt will be a direct competitor to Coinbase.

Right now the platform is currently awaiting operational approval from the US Commodities and Futures Trading Commission (CFTC), could potentially act as a compliant on-ramp that could bring about Bitcoin mutual funds and ETFs to retail investor’s 401(k). The is expected shortly but regulation issues that involve the government are never easy.

Loeffler explained that the platform is currently hard at work with members of the clearing house risk committee, and is working closely with their clearing house boards to meet the regulatory guidelines set forth by the CFTC and the US government. Subject to CFTC approval, the exchange hopes to begin testing and onboarding in November, with trading starting the following month, in December.

Bakkt is also awaiting approval on a patent for their proprietary market model that aims to provide institutions with a regulated framework for offering cryptocurrency-related products to their clients. Again, patent approval depends upon the US government.

Her comment has been: "Our patent-pending market model is focused on mitigating risk while creating opportunities for institutions to serve their clients in a regulated framework for digital assets. This means creating a solution that both provides wanted exposure and limits unwanted exposure. A critical aspect of our model is ensuring that our clearing members are well protected from a risk perspective through a conservative market design…”

The aforementioned model will utilize three key requirements to ensure risk mitigation, including a requirement for full pre-funding for all Bitcoin trades, direct access to the warehouse, which means that clearing members will not have to handle cryptocurrency themselves, and a fund that ensures that non-default clearing member capital is never at risk.

Loeffler also explained that forming a regulatory framework for nascent industries is incredibly important, and that dialogues regarding regulation are already in full swing, specifically mentioning the attendance of regulators at the recent LabCFTC FinTech Forward conference.

Assuming the platform is approved by the necessary regulatory bodies, Bakkt could bring a significant amount of retail wealth into the cryptocurrency industry, possibly reversing the persisting bear market.

In addition, this is just the setting that will enable the CBOE to launch an ETF for Bitcoin which should get SEC approval in 2019. It’s hard to imagine the SEC not approving a CBOE product which will be based upon bitcoin futures.

In addition, I would expect ETFs for ETH in 2018 and there is a good chance that some of the crypto indices, such as the Bloomberg index, will also form the basis for ETFs. If this happens in 2019, then my estimate of a 2-4 trillion market cap for crypto is probably way too low.


November 2018 - US
What You Will Learn In This Workshop

Learn 2 systems with 8 strategies that can also be done in tandem with swing trading in a systematic way.

  • In this workshop you will learn 3 variations of the mechanical Frog system, along with reasonable points where parameters may be varied, supported by ongoing evidence from forward trading a conservative version that is positive expectancy.

  • You will learn and practice on the RLCO framework: a strategy that has at least 5 distinct applications with easily recognized patterns that can be traded separately or in an integrated way.

  • You will learn how to combine these intraday strategies with longer-term swing trade patterns and trades in order to get more value out of longer term systems.

These systems are designed for equity indices, ETFs, futures, and individual stocks, however, there is a growing body of evidence that suggests the systems may be effectively applied to Forex pairs and Forex pairs futures.

Day Trading Case-Study Package Added to our November 2018 Class Valued at $1,500!

We have added a special bonus for the November Day Trading System Course which we have not offered before and will not offer again (for no charge).

Ken Long has developed a hefty package of 60 day trading case studies which Ken recorded in video. These 60 case studies demonstrate the direct application of all the learning materials from the 3 day workshop. Collectively, these help you practice: scanning the market and individual sectors to find low risk ideas, trade framing, estimating price targets, contingency planning for routine decisions, managing trades that are working, taking profits, and applying standard concepts like the frog box and 1R for making routine decisions.

Perhaps even more valuable than the technical concepts in action are demonstrations of managing your mental and emotional state during the trading day, so that you are making decisions from a position of professional competence and not impulsively reacting to the next price event.

Tortoise Capital (Ken’s company) normally sells this case study package for $1,500, but for only this November workshop, you will receive that package at no extra charge.

We ordinarily pair a live trading session of several days with the day trading instruction, but due to a scheduling conflict, we couldn't do that this year. Instead, we are providing these recently recorded trading videos, 60+ lessons in all, at the November 2018 class.

What is Systems Thinking?

Systems thinking should not be considered one simple idea, but rather a combination of numerous subjects. For example, systems thinking is considered:

  • An integrated body of knowledge or discipline—think the Scientific method and Sir Isaac Newton. Here, the focus is on the objective, or that which can be observed.

  • An idea involving your mindset, or way of looking beyond the basic trading aspects of tactics. Here, we are starting to look at beliefs.

  • A recurring and iterative process, requiring various inputs. These might include changes in oneself, the markets, your results in comparison to your objectives, and more. The outputs include informed decision making about what systems to use, what position sizing strategies to employ, if and when discretion is utilized, and more.

Advanced systems thinking also involves mental maps, and how they are useful to guide you while in the trading process. Here, the subjective becomes as important as the objective.

However, even this has limits, as most standard systems thinking is mostly linear thinking,

I believe I have found a new, more robust way of thinking about systems…

And it’s here where we can begin to reach new levels of awareness and increase the chances of achieving success through trading.

The REEDS system course will be taught by both Super Trader Chuck Whitman as well as Mark Boucher. It is a low-cost, two-day workshop offered for a price well below the value of the information. This method for swing and position trading is being explained publicly for the first time ever through the Van Tharp Institute.

The REEDS system has deep research behind it and a long-standing track record. The research suggests that the benefits of this system are not fleeting, and the track record shows that this edge is likely to endure in the marketplace. Components of the strategy have been traded by these traders real-time for market-beating profits for decades.

If learning a massive edge that has shown 40%+ annual profits over a decade via a mechanical strategy could improve your trading, then you likely can’t afford to miss this course. It is hands-on, practical, and built to help you emerge from the class with trade-ready strategies in hand.
December 2018 - US
January 2019 - US

Free Book

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Read Van’s Latest Book —
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.
Watch our Trading Beyond the Matrix Video


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