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

November 18, 2009 - Issue #450

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Trading Education

Save 20%. BIG End Of Year Sale 

Article

How to Raise Your Self-Esteem by Van K. Tharp, Ph.D.

Workshops

2010 First Quarter Workshop Schedule

Trading Tip

A Tale of Two Markets by D.R. Barton Jr.

Free

What Type Trader Are You? Take 3 Minutes to Find Out

Mail Bag

Will You Suggest A Position?

Trading Education

20% Off End-of-Year Sale

Save 20%, for a limited time, on Van Tharp's core educational materials

  • Peak Performance Home Study, Save $159

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Feature

How to Raise Your Self-Esteem

by

Van K. Tharp, Ph.D.

Many schools of psychological theory involve the notion that individual personalities are made up of many different parts. It doesn’t matter if this is true or not. What is important is that using the idea that we are made up of many different parts is USEFUL. 

Click here to see Part One of this series for more information on this concept. 

In Part Two of this series we discussed how to deal with conflicting parts. I want to re-emphasize that you created all of your parts. You would not have created any parts had you not had a positive intention for doing so at the time.

If you understand the parts paradigm, you can probably see how your parts can have a profound effect on your trading. A powerful part can literally bankrupt you or alternatively help you make really big money. Sometimes parts work together to hold you back or push you along. Understanding your parts can be incredibly helpful to improving your trading performance.

Now I would like to continue on with this topic and cover the next level. 

You could have a multitude of internal parts operating on a subconscious level. If you have parts inside you that tend to lower your self-esteem, then you probably cannot easily overcome those problems on your own. However, there are certain steps you can start working with right away.

1. Get in the habit of loving and acknowledging yourself. For example, acknowledge your accomplishments and your blessings. What do you have to be grateful for? Take an hour to write down all of the accomplishments in your life. What have you accomplished in terms of education, skills, job, etc.? What goals have you achieved? What special abilities are you grateful for having? What special people do you have in your life? Perhaps the best way of doing that is to imagine yourself in the scenario of James Stewart in the movie It’s a Wonderful Life. If it’s more appropriate, what if you were Scrooge in Dickens’s A Christmas Carol? You might also look at Barbara Kipfer’s book 14,000 Things to be Happy About. 

Once you have compiled your list, start reviewing it on a regular basis. When you do so, say, “I, [insert your name here], am a wonderful person with many blessings. Here are a few of the things I have to be grateful for…” Recall at least five things from memory.

2. Think about how you would act toward a good friend. What would your behavior be like? Would you criticize that friend or give that person your support? Would you do something special for that person? Would you try to meet that person’s needs as best you could? How much have you done for yourself in the last two weeks?

Make a list of what you will do for yourself in the future. Schedule it. What will you do tomorrow? What will you do over the next week? The next month?

3. Give your body what it needs. These behaviors include such activities as regular exercise, regular meditation, eating properly, giving yourself a vacation, mental rehearsal, and planning. These behaviors are not only stress protectors, but are also a way of showing yourself appreciation. Start scheduling these behaviors into your week. (For those of you who have the Peak Home Study Course, Volume 2 has a more extensive list of behaviors that serve as stress protectors.)

4. Negotiate with parts that you determine might be affecting your self-esteem. For example, remember that each part is really doing you a favor. Get to know each part affecting your self-esteem. Become a friend to each part. Find out what each part’s positive intention is—what is it trying to do for you?

Once you become friends with a part, it then becomes easy to get that part to find more suitable behaviors to carry out its intentions. For example, if you have a part that causes some emotion by trying to avoid it, then get that part to be responsible for getting rid of the stored emotion inside of you rather than finding external situations that will indirectly allow you to release the emotion. Get that part or parts to search for your real potential that exists beneath all the emotion. 

5. Keep your agreements so that your parts trust you. A key element to friendship is trust. If you plan to be a friend to your parts, then they must trust you. You must communicate with them regularly. You must keep any agreements you make and only make agreements you plan to keep. At least keep an agreement to re-negotiate if an initial agreement does not work.

6. If you are looking for the hidden jewel that lies beneath all of that fear, anger, guilt, or resentment, then learn to give it away. You have had a tendency all of your life to find what you judge to be negative outside of you. As we have indicated indirectly in this series, you can find out what is inside of you just by looking at what you see outside of you. This is a great gift once you realize it is true. We have long described the process of transformation as being a process in which you make an internal change and suddenly everything about you seems different. What you see around you reflects what is going on inside you. 

Just as you can discover what you are like inside by looking around you, you can discover the hidden treasures you are looking for by giving them away. If you are looking to make your life more worthwhile, then look around you for worthwhile things. If you are looking to feel better about yourself, then notice how much better the world can look. If you want more love in your life, then give it away. If you are looking for a sense of prosperity, then be willing to spend some money on yourself or, more importantly, willing to give money away. 

Try doing one of the following:

  • Pay for someone’s dinner at a restaurant anonymously.
  • Fill up a parking meter for a stranger or pay the toll for the person in the car behind you at a toll booth.
  • Think of people you dislike and say nice things about them. See that person in your mind bathed in a pink light. 
  • Become a big brother/sister to a disadvantaged child.

Try something small to begin with.

One of the most difficult areas to work on by yourself is your own self-esteem. Get yourself a coach. Find a friend you really trust and practice doing these exercises with that person.. This topic is covered extensively in my Peak Performance Home Study Course and my Peak Performance 101 workshop. Whatever you do, commit to it and do it now.

About Van Tharp: 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.iitm.com. 

 Workshops

2010 First Quarter Workshop Schedule

Download Van's 2010 Syllabus Now

We have many new workshop offerings this coming year! We have a completely new three-day workshop Great Systems for Bear Markets and two reworked courses that will better serve your needs, Systems That Outperform the Global Markets Long Term and Swing and Day Trading Systems for Equities and ETFs (scheduled in second quarter). 

Also, Van will be bringing three workshops to New Zealand in February!

If you'd like a 2010 Syllabus mailed to your home, click here.

 

January 14-16 Blueprint for Trading Success Cary, NC
January 18-20 Peak Performance 101 Cary, NC
February 19-21 How to Develop a Winning Trading System That Fits You New Zealand
February 23-25 Systems That Outperform the Global Markets Long Term New Zealand
February 27- Mar 1 Great Systems for Bear Markets New Zealand
March 21-24 Four-Day Peak Performance 202 Cary, NC
March 26-28 New! Three- Day Peak Performance 203
               
(more info to come)
Cary, NC

 

Trading Tip

A Tale of Two Markets

 by 

D.R. Barton, Jr.

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”—Charles Dickens, A Tale of Two Cities

Today we’re living in “A Tale of Two Markets.” I was just telling a friend and long time trader about this article and using Dickens’ quote. Has there ever been a better opening paragraph? Most strikingly, I did not remember the end of the quote: “…in short, the period was so far like the present period…"

And indeed our current financial markets reflect the Dickensonian superlative and polar opposites. The financial markets are seeing one level of participation from institutions and another from retail investors. And credit markets are bending over backwards to issue corporate debt while continuing to shun retail borrowers and make credit tough to find for small businesses.

Let’s look a little closer at these two separate responses from the retail and institutional worlds.

With the market making an amazing recovery from the March lows, some amazing statistics accompany the 65%+ run that the market has seen. First and perhaps most interestingly, money market funds (where retail investors traditionally park cash) continue to be at a very high level, despite the markets’ strong bull run. Traditionally, when the stock market heats up, retail investors jump in with both feet. Analysts claim that this high level of money market assets reflects the fact that retail investors are still avoiding the equity market after being burned last year.

To be fair, this money on the sidelines could also serve as fuel for a further push up in the markets, if and when the retail investors decide it’s safe to jump back in with both feet. 

But it seems, from consumer sentiment numbers, that Joe and Jane Six-pack are still playing their cards very close to the chest. University of Michigan preliminary consumer sentiment dropped significantly from October to November and was well below analysts’ estimates. This is ominous heading into the holidays. This is especially true given that the paper increase in wealth from the surging stock market typically loosens, rather than tightens, the purse strings.

Next week we’ll take a look a look at the huge differences that exist in the credit markets for institutions versus individuals, and we’ll draw some conclusions about where this two-market model might be taking us. 

Until then…

Great Trading!
D. R. 

About D.R. Barton, Jr.:  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".

Disclaimer 

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Mail Bag

Will You Suggest A Position?

Q:  You were kind enough to answer a question I asked in a prior message. Many thanks! It related to where we put our money during a downturn in the equity market. Bonds are not the place for any length of time considering inflation possibilities. You suggested not being concerned until you determine a neutral position...or words similar. NEUTRAL? Where do I find your present and future positions on your website? If not on the website, where? 

Also, you suggested putting some of the portfolio in high yield bonds. That may be a good allocation for now but when the equity market falls, high yield bonds also experience a drawdown.

Will you suggest a position to consider for what I expect will be a downturn over a period of several months sometime in the near future? It takes time to review possibilities.

Gold is a possibility (only have access through ETFs or precious metal funds) and so is cash or even very short term bonds. Again these are accounts that do not have individual bonds etc. We are working with stocks, ETFs, bonds (mostly in bond funds, ETFs), some mutual funds and some subaccounts. 

Can you help?

Your website is a big bonus for those of us on the "I need all the education and reliable information possible" side of trading. Thanks!

A:   I think that it's important for you to understand that what we do is teach people how to become traders and investors. We teach traders how to develop their own systems, how to get their psychology under control, and how to develop a business plan that will guide their trading. 

What we don't do is give advice on specific strategies for several reasons: 

1) That would put us in the role of an investment advisor, which is not our intention.

2) Everyone has different objectives and you achieve your objectives through position sizing.

3) If we gave recommendations, we could become a scapegoat for someone who isn't taking responsibility for his/her own trading/investing. Responsibility for your results is the CORE of our teachings.

That being said, I do write a monthly market update in my newsletter. In that update, I give the market type of the S&P 500. Going short on major US stocks when the market type is bull would be highly risky as would going long with stocks or stock funds when the market type is bear. —Van

Feedback

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Feel free to click below to leave us any comments so that we can serve you better. Or, send Van a question that you would like for him to answer. 

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Copyright 2009 the International Institute of Trading Mastery, Inc.

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