Home Workshops Products Contact Us

View this newsletter on-line, or read back issues


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

February 17, 2010 - Issue #462



New Workshops from Van Tharp


Self Sabotage is Not Pursuing Happiness by Van K. Tharp Ph.D.

Trading Education

How to Develop Peak Performance Trading Results

Trading Tip

Perception, Deception and Debt – More Volatility to Come by D.R. Barton, Jr.

Mail Bag

Risk Recommended for the Position Sizing Game


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


Ask Van Your Questions



Brand New From Van Tharp, Peak Performance 203 Workshop

 Learn more


Self Sabotage is Not Pursuing Happiness


Van K. Tharp, Ph.D.

For the last ten years I’ve had three different models for self-sabotage. One model is the matrix model which says “you are programmed to do non-useful things and you must undo the programming.” While this model works, it really cannot explain a lot of things that I’ve observed in witnessing many transformations.

In the second model, we self-sabotage when we don’t own our creations. Here, we create a part of ourselves to carry out certain positive intentions but then we forget about the intention and then the part does things on its own that are not congruent with our best interest. When we don’t own our feelings, then the feelings can start to own us. For a long time, I’ve said this is the best model for traders to use to improve themselves.

But there has always been a third, more sophisticated model, in the background. This model says that we are all ONE. The idea that we are separate is simply an illusion that we’ve made up and everything that we do to reinforce the illusion is a form of self-sabotage. This is one of the core teachings of A Course in Miracles. This model is very extreme and it implies that most things that we do are a form of self sabotage including anything we believe to be true (i.e, there is no difference here between objective and subjective beliefs).

If you’ve been following my newsletter update over the last year, you know that I’m now a “Oneness Blessing Giver”. This has been an amazing journey for me. I detailed some of my experiences in two newsletters in August 2009 (click here to read those two articles). Those articles probably received more comments than any other articles I’ve written.

When I went through a week-long blessing givers course in Fiji, I had a day in which I experienced a very strong state of “Rapture.” My physical limitation on how much I could laugh was the only thing holding me back from laughing more and harder all day long. I could not stop laughing that entire day. 

Since that time, I’ve decided that self-sabotage is very simply anytime you do not “pursue your bliss.” To help others understand this concept, I’ve designed the Peak Performance 203 workshop. Many of my Super Traders attended the workshop trial-run in December and described it as perhaps the most life changing workshop they’ve ever taken. That tells me it did what it was designed to do. 

Do you realize that most people pursue goals simply because they want the love, happiness, oneness, and connection that they think their goals (including trading success) will bring them? Happiness, however, is a natural state that does not require any accomplishments. Actually, I have learned that most of us block happiness thinking that we have to pursue things in the outer world to get it. The reality is that happiness is your true nature. Peak 203 will help you live this rather than just grasp it at a conceptual level. 

OK, but what does happiness have to do with trading? Many times in the Peak Performance Home Study Course, I suggest that BEINGNESS is much more important that doing or having. If you want trading success, you need to step into what it’s like to be a good trader. And one of the miracles of all of this is that as you move toward happiness, you can naturally see the markets for what they are. You do what is necessary to make money with little effort. But the happiness is already there as a background state.

I’ve been reading a book by Gretchen Rubin called The Happiness Project, in which the author details her experiences during a year of pursuing happiness. And some of the information from that book was quite fascinating. For example, she says that research (no reference cited) shows that

• Happy people work more hours each week—and they work more in their free time, too. They tend to be more cooperative, less self-centered, and more willing to help other people—say, by sharing information or pitching in to help a colleague—and then, because they’ve helped others, others tend to help them. Also, they work better with others, because people prefer to be around happier people

• Students who were happy as college freshmen were earning more money in their mid-thirties—without any wealth advantage to start. Being happy can make a big difference in your work life.

I’ve already seen evidence through some of our Super Traders that happiness can have a dramatic effect on trading results. Thus, I’m eager to do a lot more of these workshops.

In March 2010, I’m doing something very special. For the first time, I’m teaching both of our advanced psychological workshops back-to-back. Attendees get to take the four day version of Peak 202 and after a day off, then take the new 3 day happiness workshop, Peak 203.

Then after those two Peak workshops, we are doing another first. We will host a two-day Oneness Training Course at our offices (but this is not a Van Tharp Institute workshop). The North Carolina Oneness Trainers, Sheldon and Kathi Butler will be leading the event. 

We could not have done this until very recently. The energy from oneness blessings has become so strong that the blessing giver course has been reduced from 42 days in India, to 21 days in India, to 7 days in Fiji, to now just two days (in NC in this case).

For people who’ve gone through the seven days of our advanced Peak workshops, this event will indeed be a very powerful experience. 

There are no pre-requisites for the Oneness Course and it only costs $195.

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. 

Trading Education

Peak Performance Home Study 

"You don't trade the markets.  You trade your beliefs about the markets." —Dr. Van Tharp  

What does that mean?  How do you even find out what your beliefs are?  With this course, learn how to identify your beliefs and find out which ones are useful and which ones cost you money in the markets. Learn to trade more profitably and consistently.

Learn More

Buy Now

Trading Tip

Perception, Deception and Debt – More Volatility to Come

D.R. Barton, Jr.

In last week’s discussion on Greek debt, I concluded that uncertainty and hence volatility would remain in the market for some time to come.

As the mainstream press latched onto the situation, the latest revelations have done nothing to change that thinking.


The most interesting report came in a New York Times article over the weekend that revealed—gasp—Wall Street banks have helped create another debt bubble.  This one in Greece. 

In summary, investment banks (which are now just “plain ol’ banks”), most notably Goldman Sachs, created customized derivatives or swaps to effectively loan large sums of money to Greece (and other countries in the PIIGS mess).  All of this was perfectly legal, even if it wasn’t disclosed.

In essence, Greece swapped future revenues from airports, highways and the national lottery (also known as their safest and most reliable future revenue streams) for a chunk of cash then.  Since the transaction was classified as a sale and not a loan, the immediate infusion of cash helped Greece meet some European Union financial guidelines in the short term (back in 2000 and 2001) and pass the problem on to future regimes.

Let’s recognize these maneuvers for what they are: an under-the-table use of financial and accounting gamesmanship that allowed a bubble to grow out of control and off the financial radar screen.

Understand, America has developed “passing the problem to future administrations and generations” to an elevated art form, so I won’t cast any stones.  Additionally, the European Union debated the very issue of making such swaps more transparent in back in 2000, but decided against any new reporting requirements.  Finally in 2002, disclosure requirements for these types of swaps (and the entities formed to facilitate them) began to appear.

The current “second wave” debt crisis is almost certainly deeper and wider than we currently imagine.  Additional volatility and uncertainty will continue as the media uncovers more revelations about the situation. 


And now for a fun guessing game on perception.  Let’s look at the debt of two different governments.

(All $ in Millions)

Annual GDP

Outstanding Debt

2010 Budget Deficit

Government A




Government B




Here’s the set-up:  Country A has a GDP of $2 trillion, $75 billion in debt and will have a projected budget deficit of $40 billion for this year. 

Country B has an economy 1/5 the size of A, has almost 6 times more outstanding debt and will add 20% more debt this year to their bottom line.

Whose bonds would you imagine have the higher priced insurance against default?  Which one does the market view as riskier?

Considering the numbers provided, wouldn’t it seem that Government B would have the higher risk for defaulting on its bonds?

Alright, this was a trick question.  Government A is actually California. And Government B is Greece.

As strange as it may seem, California had the higher default insurance up until two months ago.  California was viewed as a worse credit risk than Greece! 

What changed?  One thing—perception. 

Until December, California had to pay more for bond insurance than Greece did.  California’s problems had been in the news for a long time by that point and were very high in the public’s awareness. Since the first of the year, Greece’s debt problems have been in the news more.  Now that more people are aware of the issues, the price for insuring against Greek default has risen dramatically.

What a strange game.  If one wanted to speculate in government bonds today, it looks to me like buying California bonds and selling Greek ones might be the way to go.


In the end, the two primary Greek creditors (France and Germany) will not allow it to default.  For the EU, Greece falls into the same category that the American banks and AIG did last year—“too big to fail.”  A default on Greek debt would send the EU into a tailspin that most would consider catastrophic.  That could lead to the end of the economic conglomerate and create severe financial hardships for member countries in terms of cost of capital. So the member countries will do everything in their power to keep that from happening.

If Greece is too big to fail, then what about California?  It’s five times bigger…  Some opine that the California debt insurance is as high as it is because the US federal government has given no indication that it will step in to help.  But I think that it is a rather safe bet that the U.S. governmental powers-that-be will not allow a California default under any circumstances short of financial Armageddon.

So in the meantime, someone is enjoying the benefit of writing really high-priced California risk insurance. 

Until the EU creates some concrete plans for resolution the PIIGS debt problem, look for the volatility in the equities markets to continue.

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”.  

Trading Education

What Type Trader Are You?

Take 3-5 Minutes to find out. 


Learn your trader type, your strengths, challenges and solutions. 

Pass it on to your friends! It fun and it's free!


Risk Recommended for the Position Sizing Game

Q: Van, I recently read one of your books, in it you recommended not risking more than .5% per position if your trading your own funds. In your game that I downloaded I tried only risking .5% of the 10k starting amount per trade but it did not work to well. When I bumped up the amount of risk per trade to a consistent 3 % it worked very well and advanced easily through the levels. Is this because the starting amount of 10k is to small to only risk .5% and get the required growth of 15k within 75 trades? I ask as I have a small 60k plus margin I can trade and I only like to risk .5% or 300 per trade but am concerned at that level my account wont grow fast enough to meet my goals.
Thanks, Tim 

A: Hi Tim. Van is in New Zealand so I would like to reply to your question. You already have more insight than most folks into one of the two most important areas for trading success. Congratulations. 

In level one of the game, it's very hard to make 50% in 100 trades with such a very small position size. You do have to bump up the position size to get the necessary return to make it to level II. You would not want to take away the lesson from the game, however, that you simply need to bump your position size up to meet your financial objectives. That would only be true if you thoroughly knew your trading system performance was consistent and strong. Without understanding your system’s performance, bumping up your position size could be a fast route to blowing up your account.

As far as your personal account, we can't give any direct advice. I can offer some things that you might want to look at though. Do you know how consistent your trading system results are? With more consistent trading results, it's easier to increase your position size without accepting undo risk. If your R-multiples, however, are all over the place then it's harder (not impossible) to use position sizing to help you meet your financial objectives. 

Have you done any simple modeling in Excel to help you see what kind of results your trading system generates over time and how playing with position sizing makes a difference? If you aren't very sure about your system's performance, you are much better off keeping with a very conservative position size. 

If you would like some more information about this area, I would recommend Van’s book The Definitive Guide to Position Sizing. It's basically a textbook filled with position sizing ideas and strategies. Personally, I had no idea what position sizing could do for my own trading results until I read that book. It also changed the way I think about trading systems. 

I wish you luck and thank you for your business.

RJ Hixson

P.S. A new version of the position sizing game is still in the works. We hope to release it within the next month. 


Ask Van...

Everything that we do here at the Van Tharp Institute is to help you improve as a trader and investor. Therefore, we love to get your feedback, both positive and negative!

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. 

Click Here for Feedback Form


Email us  [email protected]

The Van Tharp Institute does not support spamming in any way, shape or form. This is a subscription based newsletter.

To change your e-mail Address, click here

Or, paste this address in your browser: http://www.iitm.com/privacy_policy.htm

800-385-4486 * 919-466-0043 *  Fax 919-466-0408

Back to top

Copyright 2010 the International Institute of Trading Mastery, Inc.




"Most folks are about as happy as they make up their minds to be." ~Abraham Lincoln






Trouble viewing this issue?

  View On-line.





Buy Now





Back to top


Haiti Relief Fund

Donate to UNICEF through Trader Planet and receive bonus items.

Learn More...






Tharp Concepts Explained...


- Psychology of Trading

- System Development

- Risk and R-Multiples

- Position Sizing

- Expectancy

- Business Planning

Learn the concepts...


.Back to top



Free Trading Simulation Game

A computerized version of Van's famous "marble game."

It is designed to teach you the important principles of proper position sizing.

Download the 1st three levels of the game for free. Register now.





Share this newsletter with a friend!



.Back to top






Share this newsletter with a friend!












Back to top


Follow Van through Twitter.

Back to top