Dr Van Tharp is a professional coach for trader and investors, using his expertise in psychology and NLP to create models of trading and investing upon which so much of his work is based.
He is the author of a number of popular trading books, including Trading Beyond the Matrix: The Red Pill For Traders, Super Trader, Trade Your Way to Financial Freedom, Safe Strategies for Financial Freedom, Financial Freedom Through Electronic Day Trading, The Definitive Guide to Position Sizing and a number of courses offered by the Van Tharp Institute.
Tharp is the only trading coach featured in Jack Schwager’s best-selling book, The Market Wizard’s: Interviews with Great Traders and has been featured in Forbes, Barron’s Market Week, Technical Analysis of Stocks and Commodities, Investors Business Daily and Futures and Options World, and Trader’s Journal, just to name a few.
Dr. Tharp is also a highly rated guest speaker at expositions and conferences, conducting workshops around the world, including for floor traders and portfolio and hedge fund managers worldwide.
In this episode we talk about beliefs and their impact on trading, the qualities of successful traders, adapting trading to market types, position sizing, trading mistakes and overcoming fear, perfectionism and impatience.
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- How Van got started in the markets and the issues he faced initially
- The main reasons the majority of trades are unsuccessful
- How traders can identify the type of strategies that suits them
- What it means to trade your beliefs in the market
- How to assess whether your beliefs are useful or limiting
- The real importance of psychology in trading
- Your collection of parts and how they interact
- The process of transformation in a trader
- Qualities of losing traders and how to test yourself for them
- The impact mistakes could be having on your results without even knowing
- How to cope with larger trade sizes as your account grows
PLUS listener questions on:
- Using position sizing to meet your objectives
- The 6 market types, how to measure them and how to apply it to your trading
- How to find positive expectancy systems
- Developing patience when in a trade
- Trading in short timeframes
- How to address issues with perfectionism
- Systematic vs Discretionary trading
- Overcoming fear of pulling the trigger
- Handling drawdowns
Resources mentioned in this episode
Get a free copy of ‘Trading Beyond the Matrix’ by Van Tharp
Dr Van Tharp has kindly offered Better System Trader listeners free copies of his latest book ‘Trading Beyond the Matrix‘, all you pay is the shipping!
Top tips from this episode
Here are few of my favourite takeaways from the chat with Van:
- The impact of beliefs on trading – one of the statistics Van mentioned was “Most people find about 75% of their beliefs are not useful”. I found it surprising the number was so high, which made me think about my own beliefs and how they could be impacting me, not just in trading but also in life. It’s a really interesting exercise.
- Market types – I also enjoyed his insights into market types, measuring trend strength, direction and volatility to classify the type of market and then developing strategies for each market type. I really liked his quote “Quite often the biggest drawdown happens when the market type changes”. If you really understand the best market types for your strategies you can switch between them as market conditions change.
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13 September 2015