Trading Beyond
the Matrix
THE RED PILL FOR TRADERS
AND INVESTORS
Van K. Tharp, PhD
WILEY
Contents
Acknowledgments Foreword DougBentley xvii xix xxiii Preface: Understanding TransformationVan K. Tharp, PhD
Level I: Transformation of the Trading Game xxv Level II: Understanding the Matrix and
Reprogramming Yourself xxviii Level III: Trading Beyond the Matrix xxx Your Personal Application of This Material xxxi
SECTION I: TRANSFORMATION OF THE TRADING GAME: UNDERSTANDING
THE BASICS Van K. Tharp, PhD
Two Sets of Rules
Chapter 1: I Just Made 130 Percent—and That Was Just the Beginning
David Witkin
Learning to Trade
"Danger, Will Robinson, Danger!"
Tharp Think 101
Not All Lessons Are Equal Finally, Some Winning Marbles
9 10 12 16 20 vii
viil Contents
Chapter 2:
Chapter 3:
Chapter 4:
The Automation of Tharp Think 2 5 Laurens .Bensdorp
My Journey into Doing the Trading Myself 27 Training Someone Else 32 Why This Is Possible 33 Addendum 35
From Commercial Loan Officer to
Financially Free Trader Investor 37 Rick Freeman
My Initial Psychological Changes
What I've Learned about the Trading Game
Understanding the Trading Game
So How Do You Get a Positive Expectancy System ?
Getting a System That Works Trading Psychology
How My Life Has Changed
From Army Major to Systems Expert Kenneth Long, DM
What I Have Learned and How I Have Changed
The Power of Beliefs Statistics-Based Trading Trading Extremes
Reward-to-Risk Assessments R-Multiples
Position-Sizing Strategies™ and Bullets
SQN Performance to Evaluate Systems, Targets, and Markets
Market Classification Strategies
Transformations
Improved Systematic Performance
Specific Systems for Specific Market Conditions Detailed Documentation and^Analysis of Trades Evidence-Based Management
Reduced Stress
Performance
Long-Term System with Monthly Rebalancing
40 44 46 50 51 52 54 59 61 61 64 67 68 69 70 71 72 73 73 74 74 74 75 75 76
Chapter 5:
Chapter 6:
Contents Weekly Swing Trade with Once-a-Week Portfolio Adjustments
Pattern Swing Trade Using End-of-Day Data Live Trading Workshops Results
Using Tharp Think to Go from Full-Time Broker to Full-Time Trader
Martin Horsey
My New Venture
Going to North Carolina Restarting Trading
Where I Am Now
Adapting Tharp Think to Your Trading Van K. Tharp, PhD
Area One: Thoroughly Understand the Principles of Successful Trading Part 1: Learning to Trade Is Hard Work,
But It Can Be Taught Part 2: Knowing Yourself Part 3: Mistakes
Part 4: Objectives and Position Sizing Strategies
Part 5: Probability and Reward-to-Risk Assessment
Part 6: Systems and Market Type Steps to Learning Tharp Think
ix 77 78 79 8 3 84 85 87 90 9 3 95 97 98 100 101 103 107 109
SECTION II: PSYCHOLOGICAL TRANSFORMATIONS TO HELP YOU FUNCTION AT A SUPERIOR LEVEL
WITHIN THE MATRIX 111 Van K. Tharp, PhD
Chapter 7: Beliefs: The Basis for the Matrix Van K. Tharp, PhD
Understanding the Impact of Beliefs Will Change Your Life
How I Create My Experience
117
118 124
x Contents
You Are the Awareness of Thoughts that
Flow through You 129 Belief Hierarchy 130 Changing Your Beliefs 134 Everything Has the Meaning You Give It 139 Chapter 8: A Journey through the Stunning World of
Feelings and Trapped Emotions 143
Anonymous
The Turning Point - 144 Self-Sabotage Models 147 Accepting My Feelings 148 Where I Am Now 152 Note from Editor: Feeling Release as
a Metric for Awakening 156 Chapter 9: You Are a Crowd of Conflicting
Parts Inside 157
Van K. Tharp, PhD
Exercise: Have a Parts Party
Parts Negotiation Exercise
Interview with a CBOE Floor Trader Working with Dr. Van Tharp
Dealing with Conflicting Parts What's Changed Since Then
Where I Am Now (Several Years Later) Chapter 10: My Inner Guidance: A Personal
Journey of Miracles
Van K. Tharp, PhD
My Personal Journey Conversations with God
Deeksha or the Oneness Blessing My Relationship with Mitzi My Current Inner Guidance Revisiting the Transformed
Engineering Professor
My Relationship with Durga Grows Oneness with God
160 160 163 165 166 168 169 171 172 176 178 179 181 183 186 187
Contents xi
Bond with the Divine 188 The Nature of the Relationship Is Critical 191 What Does this Mean for You and for Your
Trading? 193 Some Recent Updates 197
Update 1: Mother Meera's Second Blessing 197 Update 2:I Clear My Fear-Based Spiritual
Beliefs 198
Chapter 11: My Experiences Using
Transformational Meditation 201
Peter Wechter
"I" Have a Problem Using and Relating to
the Word "God" 206 Five Transformations 207 Some More "Little i's" That Didn't
Get the Message 210
Discussion 220
Dealing with Mistakes 221
Discussion 224
Closing Reflections 225 An Addendum 226 Chapter 12." Creating Your Own World 233
Van K. Tharp, PhD
Nine Steps to Mastering Yourself 236
Step 1: Learn That You Are a Crowd Inside 236 Step 2: Get 25 to 30 Identity-Level Beliefs
from Each Part 237 Step 3: Do a Belief Examination Paradigm
on Each of Your Beliefs 239 Step 4: Learn about Projection and Your
Shadow Self 240 Step 5: Work on the Charge through
Feeling-Release Exercises 240 Step 6: Do a Life Review and List the Beliefs
That Come Up 242 Step 7: Make a List of Your Problems and Find
xii Contents
Step 8: Get in Touch with Your
Internal Guidance 243 Step 9: Work to Eliminate Parts, or to at Least
Get Them to Work Together with You 245 SECTION III: MOVING BEYOND THE MATRIX BY
TRANSFORMING YOUR LEVEL
OF CONSCIOUSNESS 247 Van K. Tharp, PhD
Our Most Powerful Tool " 249 Super Trader Journeys through
Transformation 250 Chapter 13: How I Turbocharged My
Transformational Journey 253
Kim Andersson
Discovering the Linchpin 258 Transformations Turbocharged! 262
Transformational Pillar #1: Getting
Rid of Fear 262 Transformational Pillar #2: Tapping into
a Higher Power 264 Transformational Pillar #3: My Purpose in Life 266 Transformational Pillar #4: Finally
Getting Rid of My Need for Control 266
Taming My Unconscious Fear of
Becoming a Millionaire 268 A Snapshot of Before and After 269 The Turbocharged
Transformational Model 270 Conclusion 272 Chapter 14: From Engineer to Spiritual Warrior:
A Trading Journey 273
Anonymous
Timeline 1: Downhill Accelerating 274 Timeline 2: Crawling out of the Pit 278
Contents xiii
Finding Out That I Would Be a Professional Investor as Soon as I Retire
Do I Have a Real Problem, or Do I Just See Monsters in the Closet?
Meeting Super Trader Program Students: I'll Have What They 're Having
Transformation 1: Dropping the Pain of Past Projections
Original Situation
Actions to Achieve Transformation-Transformed State
Interlude: There's Money for Everyone
Transformation 2: Firsthand Experience of a Benign Universe
Original Situation
Actions to Achieve Transformation Transformed State
Transformation 3: Realizing My Purpose
Original Situation
Actions to Achieve Transformation Transformed State
Transformation 4: Finding a Vehicle That Suits Me
Original Situation
Actions to Achieve Transformation Transformed State
Transformation 5: Become an Active Manager of Emotional States
Original Situation •
Actions to Achieve Transformation Transformed State
Bottom Line: Net Winner in Life
280 282 283 284 284 285 287 288 289 259 290 292 292 292 293 295 296 296 297 298 300 300 301 303 305
Chapter 15: A Professional Trader's Journey
beyond the Matrix 307
Curtis Wee
My Early Trading Experiences 310 Stumbling on the Van Tharp Institute 312
xiv Contents
Key Lesson 1: Taking Personal
Responsibility 314 Key Lesson 2: Able to Deal with Thoughts,
Emotions, and Actions 315 Key Lesson 3: Knowing My Thoughts
Are Not Mine
Key Lesson 4: Trusting My Inner Guidance Key Lesson 5: Understanding That the
World Is Perfect
Key Lesson 6: Knowing My Purpose Key Lesson 7: Reinventing Myself So Where Am I Now?
Chapter 16: My Journey to Trading in the Now
Thahn Nguyen
My Transformation Journey
Area 1: My Anxiety or Worry Area 2: My Impatiencei
Area 3: My Fear of Failure or Being Wrong Area 4: Being Overwhelmed
Area 5: Tendency to Believe That I'm Always Right
Area 6: Trading with No Plan or System
How It Happened Where Am I Now? Editor's Note
Chapter 17: Thoughts on Raising Your Level of Consciousness
Van K. Tharp, PhD
Some Exercises for Trading in the Now Trading in the Now
Level IV Transformation
Questions on Raising Your Level of Consciousness 317 318 318 320 322 322 325 327 328 330 330 330 331 331 333 334 336 337 338 340 342 344
Contents xv Chapter 18: Continuing the Journey 349
Van K. Tharp, PhD
Area Three: Develop a Personal Business
Handbook for Trading/Investing 349 Area Four: Assessing Your Preparation
for Trading 355 Area Five: Understand Your
Trading Mistakes 360 Appendix: Recommended Readings 363 Appendix: Key Words Defined 367 Appendix: Reference Notes 373 About the Author 381 A Personal Invitation from Dr.Van K.Tharp 383 Index 385
