Q: You wrote that “people who are not working on themselves regularly…”. Please explain what that means and how to go about it (working on myself). Coming from an engineering background, I only have a vague idea what you mean and no real concept of how to go about it. Please elaborate.

A: We have a number of programs for working on yourself available through The Van Tharp Institute and I think these describe the process.

The one that started me in this direction was the 365 daily exercises from A Course In Miracles. I don’t think anyone can go past the first 100 exercises without experiencing a major transformation. A good introduction to the course, and what you might be getting into is Gary Reynards, The Disappearance of the Universe. It’s one of my favorite books.

Other examples include:
1) The Marriage of Spirit. This book is full of exercises to work on yourself.
2) The Peak Performance Course. This course will not only benefit you greatly the first time you read through it, but it can be a continual guide and reminder each time you revisit the information.
3) The Sedona Method Course. I was in the audience in the new recordings. All of these are available through The Van Tharp Institute, although you may have to call in for the Sedona Method materials.

In the Blueprint for Success workshop, I actually give people a sampling of each of the methods so they can decide what is right for them.

There are more that I have mentioned and will mention, but those should get you started in the right direction.

Posted by Van K Tharp at 07:52 PM | Permalink | Comments (1) | TrackBacks (0)

Q: Some traders think you need a group or tribe to work on yourself. I view this as probable NTs not knowing the world of NFs. Care to comment?

A: I suspect that if you need a group to facilitate working on your self, it simply means that you do not have the ability to find your issues and examine how you think. For example, when I say people think in terms of pictures, some people claim they never do. If that’s the case it’s probably due to some sort of trauma, but it is still the case for some people.

Looking at your feelings is also important, and some people have totally suppressed their feelings (yes, these could be NTs, but also many other personality groupings as well). I met someone in Australia who was a sky diving instructor. He’d done over 17,000 jumps and had totally suppressed his feelings. And if he ever recovered that ability, I suspect that he’d probably have to give up his profession.

Bottom line is that there are a lot of ways to work on yourself. Different strokes for different folks. And if you find something that works for you, great.

Posted by Van K Tharp at 03:00 PM | Permalink | Comments (2) | TrackBacks (0)

Q: If you need a sample size of 30 trades in various markets to get a adequate depiction of how a system will act real time, how does one go about trading a longer term trend following system: test a system over several years using small position sizes and invest your money in CDs during this multi-year period?

A: Take a look at the articles on the sample portfolio that I’ve been doing in Tharp’s Thoughts and look at all the back issues. This was supposed to be a long term trend following system. But I always had many, many stocks to select and thus there was a wide universe out of which to get 30 or more trades. In 11 months of testing we had 44 trades and this was only a small sample of what we could have taken. So unless you decide to do long term trend following and only trade one market, you should have no trouble backtesting, getting a lot of trades and using that for your initial idea of how the system will perform. You can then do a lot of simulations on the data and the Definitive Guide for Position Sizing (to be published soon) has lots of ideas for simulators.

Posted by Van K Tharp at 03:44 PM | Permalink | Comments (0) | TrackBacks (0)

Q: What is your view on backtesting? Based on readings in the area, it seems to me that backtesting has limited use. It doesn’t tell you what works now or how you would react to the psychological issues. There are questions about data integrity and slippage. And whether you would really be able to execute the trades like the computer does. Would testing using small position size be the most effective?

Van's Response: A certain amount of backtesting is useful to help you prove or disprove theories. For example, if something doesn’t work in backtesting, then it probably won’t work in real trading. However, there are strong limitations to all of the software involved in backtesting. There are position sizing limitations. And as soon as you move into backtesting you must specifically define all your rules (which is good), but it also leaves no room for discretion. For example, I’ve never found a good rule for defining something going up in a straight line… whatever rule I use always gives me weird looking charts that I wouldn’t touch. Thus, I know what I want but getting a computer to find it is not easy. And those are just a few of the limitations. I talked about them in some detail in the new edition of Trade Your Way to Financial Freedom.

Posted by Van K Tharp at 07:45 PM | Permalink | Comments (1) | TrackBacks (0)