Kara Crawford at kara@traderplanet.comadmin@traderplanet.comhttp://www.traderplanet.com/TraderPlanet.com offers its popular content for commercial syndication via RSS. The feeds include backlinks for the full articles and automatically assign author attribution, which is required. To syndicate these RSS feeds on a commercial Web site, TraderPlanet.com, LLC requires the execution of standard linking agreement. Contact Kara Crawford at kara@traderplanet.com for further details.en-ushttp://www.traderplanet.com/commentaries/view/72994-defining_1r_using_pipshttp://www.traderplanet.com/commentaries/view/72994-defining_1r_using_pips<p><span>Q: </span>I am eagerly working through <i>The Definitive Guide to Position Sizing.</i> Unfortunately, I am having difficulty calculating 1R. I am a currency trader, so it seems to be easier for me to calculate everything in pips. <br />  <br /> I do enough intraday-charting; I manually move my stop loss in order to protect at least 15 pips as soon as the trade turns positive. How do I calculate that?</p> <p>Let's say my initial stop is 90 pips away, and my initial target is 120 pips away from the entry price. In a few hours ...</p><a href='http://www.traderplanet.com/commentaries/view/72994-defining_1r_using_pips'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/834/?a=1070><img src=http://www.traderplanet.com/themes/trader_plain/gfx/wyckoff.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Mon, 13 Dec 2010 21:31:15 +0000http://www.traderplanet.com/commentaries/view/67316-tying_together_weekly_and_monthly_reportshttp://www.traderplanet.com/commentaries/view/67316-tying_together_weekly_and_monthly_reports<p><span>Q:</span> While completing the<i> Peak Performance Course</i> I have learned quite a lot about myself and have found some great references.  I tend to miss some of the big picture aspects of the market place and am interested in learning more about economic data.  I need to gain a better understanding of how the various weekly and monthly economic  reports tie together to paint a picture of the underlying  trends that will impact the marketplace.  Are there any good references that you could recommend I re...</p><a href='http://www.traderplanet.com/commentaries/view/67316-tying_together_weekly_and_monthly_reports'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/744/?a=1072><img src=http://www.traderplanet.com/themes/trader_plain/gfx/firman.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Mon, 25 Oct 2010 19:39:42 +0000http://www.traderplanet.com/commentaries/view/66734-system_testing_programshttp://www.traderplanet.com/commentaries/view/66734-system_testing_programs<p><span>Q:</span> <span>Over the years, I've spent a lot of money searching for a plan on how to make money consistently in the market, and for the first time I believe Dr. Tharp's book <i>Super Trader </i>has outlined a great blueprint on how to accomplish that. With that that being said, does Dr. Tharp have a system testing program he would recommend?  </span></p> <p><span>I'm trying to start off small and keep it simple. I'm treating this like a business, and I'm willing to spend some money, but I don't want to blow a bunch of money unt...</span></p><a href='http://www.traderplanet.com/commentaries/view/66734-system_testing_programs'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/832/?a=1073><img src=http://www.traderplanet.com/themes/trader_plain/gfx/jobman.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Wed, 20 Oct 2010 20:12:28 +0000http://www.traderplanet.com/commentaries/view/65489-the_four_star_inflation_deflation_modelhttp://www.traderplanet.com/commentaries/view/65489-the_four_star_inflation_deflation_model<p><span>Q:</span> I recently read <i>Safe Strategies for Financial Freedom</i>, which I found very useful.  Regarding the 1-2-3 model, the last reference I can find is the newsletter dated March 5, 2008.  Has the 1-2-3 model been discontinued?  If so why, and what has it been replaced with?</p> <p>I also want to understand the Four Star Inflation/Deflation Model published in the monthly market updates.</p> <p>I reviewed the relevant section of<i> Safe Strategies,</i> which outlines the methodology using four components: commodity pric...</p><a href='http://www.traderplanet.com/commentaries/view/65489-the_four_star_inflation_deflation_model'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/744/?a=1072><img src=http://www.traderplanet.com/themes/trader_plain/gfx/firman.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Mon, 11 Oct 2010 20:11:00 +0000http://www.traderplanet.com/commentaries/view/64926-an_attitude_of_gratitudehttp://www.traderplanet.com/commentaries/view/64926-an_attitude_of_gratitude<p><i>I wanted to share a letter from one of our clients with you.</i></p> <p>Dear Dr Tharp,</p> <p>It is with much gratitude that I write you this letter.  </p> <p>I have always loved the markets and once I read about you in <i>Market Wizards</i> three years ago, I knew I wanted to know more about you. As such, I have followed your newsletters with a religious fervor since then. However, I did not want to purchase your courses at the time as it would have meant reducing my trading stake to do so. It was only after a devastating ...</p><a href='http://www.traderplanet.com/commentaries/view/64926-an_attitude_of_gratitude'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/834/?a=1070><img src=http://www.traderplanet.com/themes/trader_plain/gfx/wyckoff.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Wed, 06 Oct 2010 13:27:52 +0000http://www.traderplanet.com/commentaries/view/62464-monte_carlo_simulations_and_t_testshttp://www.traderplanet.com/commentaries/view/62464-monte_carlo_simulations_and_t_tests<p><b>Q:</b> I have developed a trading system using many of your suggestions and it is almost complete.  After many trials, errors, and losses, I now understand that exits/stops are more important than entries.</p> <p>I have two questions: </p> <ol><li>In your books you mention using Monte-Carlo simulations to test your system. Can you expand on that?  Can you point me to any articles that you wrote in the past regarding this topic in other newsletter issues?</li> <li>Do you think doing t-tests to detect whether or not if your t...</li></ol><a href='http://www.traderplanet.com/commentaries/view/62464-monte_carlo_simulations_and_t_tests'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/815/?a=1071><img src=http://www.traderplanet.com/themes/trader_plain/gfx/murphy.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Thu, 16 Sep 2010 16:20:36 +0000http://www.traderplanet.com/commentaries/view/61904-when_do_i_discard_a_systemhttp://www.traderplanet.com/commentaries/view/61904-when_do_i_discard_a_system<p><b>Q: </b>Trading is mostly an internal game—that's one of the ideas I picked up after reading your work.</p> <p>Let's say that we have a couple of great systems , we have done the necessary psychological work and we are trading well. Statistically every system/method can run into a losing streak, sometimes even into a very long one. This is where my question comes in.</p> <p>When do we discard a system, never to use it again, because it's "broken"<br /> and when is it just a losing streak after which the system will k...</p><a href='http://www.traderplanet.com/commentaries/view/61904-when_do_i_discard_a_system'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/624/?a=1067><img src=http://www.traderplanet.com/themes/trader_plain/gfx/dinapoli.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Mon, 13 Sep 2010 14:21:05 +0000http://www.traderplanet.com/commentaries/view/61243-calculating_atr_for_a_specific_markethttp://www.traderplanet.com/commentaries/view/61243-calculating_atr_for_a_specific_market<p><b>Q: </b>I don't completely understand volatility. Dr. Tharp had a %ATR chart in a recent newsletter.  Can you detail how he calculates the %ATR for a specific market? </p> <p><b>A: </b>Van compares today's S&amp;P 500 daily ATR% to the mean of the S&amp;P 500 ATR%’s for all days in about the last 40 years. The ATR% is the ATR divided by the closing price.  Today’s ATR% distance away from the historical mean defines market volatility conditions. Van defines normal volatility as within 1 standard deviation on either side...</p><a href='http://www.traderplanet.com/commentaries/view/61243-calculating_atr_for_a_specific_market'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/624/?a=1067><img src=http://www.traderplanet.com/themes/trader_plain/gfx/dinapoli.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Tue, 07 Sep 2010 13:29:55 +0000http://www.traderplanet.com/commentaries/view/61015-trailing_stops_for_high_leveraged_etfshttp://www.traderplanet.com/commentaries/view/61015-trailing_stops_for_high_leveraged_etfs<p><b>Q: </b>In your books you recommend the use of a 25% trailing stop. Does it stay the same for high-leveraged ETFs ?</p> <p><b>A:</b> Van recommends the 25% trailing stop as a sort of "last resort" for investors who may not be familiar with stops.  If people have nothing beter off of which to base an initial stop or they have no effective method to move up their stop as the price moves up, then at least they can use a 25% initial and trailing stop.  It keeps these people from losing a great deal of their positio...</p><a href='http://www.traderplanet.com/commentaries/view/61015-trailing_stops_for_high_leveraged_etfs'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/832/?a=1073><img src=http://www.traderplanet.com/themes/trader_plain/gfx/jobman.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Fri, 03 Sep 2010 14:50:09 +0000http://www.traderplanet.com/commentaries/view/59900-peak_performance_home_study_course_and_position_sizinghttp://www.traderplanet.com/commentaries/view/59900-peak_performance_home_study_course_and_position_sizing<p><span><b>Q:</b> </span><span>I have bought your two books <i>Super Trader</i> and <i>Trade Your Way to Financial Freedom</i>. I think these two books are full of trading education value when it comes to trading psychology. I am a home-based Intra-day forex trader. Since I'm still learning to trade forex, I'm trading a mini-size account.</span></p> <p>I am truly convinced of your 60% psychology, 30% money management and 10% trading system opinions to be successful in forex trading. I want to learn from you and foster this all-time-critical skill ...</p><a href='http://www.traderplanet.com/commentaries/view/59900-peak_performance_home_study_course_and_position_sizing'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/624/?a=1067><img src=http://www.traderplanet.com/themes/trader_plain/gfx/dinapoli.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Thu, 26 Aug 2010 14:09:12 +0000http://www.traderplanet.com/commentaries/view/57665-what_is_sqnhttp://www.traderplanet.com/commentaries/view/57665-what_is_sqn<p><span><b>Q:</b> </span>You use the acronym SQN in your market update. Can you explain what that means?</p> <p><b><span>A:</span></b> After researching position sizing™ strategies for a number of years, Dr. Van Tharp developed a proprietary measure of the quality of a trading system that he calls the System Quality Number® or SQN®.  </p> <p>SQN measures the relationship between the mean and the standard deviation of the R-multiple distribution generated by a trading system.  It also makes an adjustment for the number of trades involved.  Dr. Thar...</p><a href='http://www.traderplanet.com/commentaries/view/57665-what_is_sqn'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/832/?a=1073><img src=http://www.traderplanet.com/themes/trader_plain/gfx/jobman.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Mon, 09 Aug 2010 13:35:54 +0000http://www.traderplanet.com/commentaries/view/54867-expiration_months_in_futures_tradinghttp://www.traderplanet.com/commentaries/view/54867-expiration_months_in_futures_trading<p><span> Q:</span> I just read <i>Trade Your Way to Financial Freedom</i>. It's a great book. It demystified the systems behind successful trading, explaining entry and exit strategies in straightforward language.</p> <p>After reading the book, I have a question I’d like to ask about futures trading: If I’m following several different commodities, and planning to enter on a breakout to potentially catch a trend-move as described in the book, how do I decide between the different expiration months? Do I follow just the fr...</p><a href='http://www.traderplanet.com/commentaries/view/54867-expiration_months_in_futures_trading'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/815/?a=1071><img src=http://www.traderplanet.com/themes/trader_plain/gfx/murphy.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Wed, 14 Jul 2010 15:48:18 +0000http://www.traderplanet.com/commentaries/view/53900-options_and_position_sizinghttp://www.traderplanet.com/commentaries/view/53900-options_and_position_sizing<p><b><span>Q:</span> </b>I am not sure where I originally learned of Dr. Tharp, but I recently listened to an interview by Robert Kiyosaki of Dr. Tharp back in 1998. I consequently have bought two books by Dr. Tharp. One problem that I currently am having is applying the position sizing rules to options. Since the option price can change with respect to underlying equity price by a given gain factor , it would almost seem like getting stopped out for every trade is almost inevitable. I have only been trading for o...</p><a href='http://www.traderplanet.com/commentaries/view/53900-options_and_position_sizing'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/832/?a=1073><img src=http://www.traderplanet.com/themes/trader_plain/gfx/jobman.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Fri, 02 Jul 2010 18:02:53 +0000http://www.traderplanet.com/commentaries/view/52543-defining_initial_rhttp://www.traderplanet.com/commentaries/view/52543-defining_initial_r<p><b>Q:</b> I have just read your wonderful book Super Trader and it helped me tremendously in my trading business. Just wanted to say thank you for this great book, which gives good advice not only for trading but for one’s entire life. <br /><br />That being said, I have a question regarding 1R in relation to my system. How do I change the value of R when I move my stop-loss to breakeven level or above? It is impossible to set it to zero in to my Excel spreadsheet because a calculation of system quality would b...</p><a href='http://www.traderplanet.com/commentaries/view/52543-defining_initial_r'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/815/?a=1071><img src=http://www.traderplanet.com/themes/trader_plain/gfx/murphy.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Fri, 18 Jun 2010 16:10:22 +0000http://www.traderplanet.com/commentaries/view/51843-risk_per_tradehttp://www.traderplanet.com/commentaries/view/51843-risk_per_trade<p><span> Q:</span> In your book, <i>Trade Your Way To Financial Freedom</i>, you state that one of the reasons that many traders go bust is that they don't practice correct position sizing strategies and that most of the beginners are under capitalized. If you are trading equities or stocks, is there a minimum value a trading account should have before you should trade? Once you have enough equity to begin trading, if you use a percent risk model for your position sizing method, what is a good starting percent ris...</p><a href='http://www.traderplanet.com/commentaries/view/51843-risk_per_trade'>Read More at TraderPlanet.com &#187;</a><p align=center><a href=http://www.traderplanet.com/tradertube/index/832/?a=1073><img src=http://www.traderplanet.com/themes/trader_plain/gfx/jobman.gif border=0 /></a></p> Dr. Van K. Tharp, Ph.D.Dr. Van K. Tharp, Ph.D.Fri, 11 Jun 2010 15:14:28 +0000