From the September 2013 issue of Futures Magazine • Subscribe!

Trading Beyond the Matrix

Trading Beyond the Matrix: The Red Pill for Traders and Investors
By Van K. Tharp, Ph.D.
John Wiley & Sons, Inc.
$40.00; 397 pages

This book is about psychological transformations and a journey of self-discovery. Thus, it portrays a very different trading and investing approach than most books in this field. Tharp puts forth the premise that a trader does not trade the market, but instead trades his beliefs about the market. And if the beliefs about the market are not useful, then they must be eliminated to not sabotage trading.  Examples of the latter include: Not developing and following written trading rules, not using stops, not using a trading log, fear of trading, not being able to pull the trigger, cutting profits short and not willing to take small losses, among many others.

Tharp is the prolific and well-respected author of five trading books including Super Trader and Trade Your Way to Financial Freedom.  He is a trading coach, consultant and trader with 30 years of experience helping many traders better understand themselves and achieve better trading performance through a three-level approach, which he covers in detail.  Chapters focus on each of these three levels, and a small group of his students have written personalized chapters illustrating the benefit of learning his trading approach to understand themselves and achieve greater success in their trading and personal lives. These chapters demonstrate that traders with different psychological profiles and trading approaches all benefited from Tharp’s coaching.

One of the most useful chapters covers the importance of adding Tharp Think to your trading. Here Tharp provides 40 key principles about trading that need to be understood and applied.  Other material from his Super Trader book is scattered throughout this book. In addition, there are many useful resources included for individuals to analyze their trading, including a checklist for trading business handbook, checklist for preparation and commitment and a scoring sheet.  Moreover, by going to Tharp’s website, readers can obtain a free evaluation of their level of consciousness, play a position sizing game, obtain Super Trader lesson five and receive a free weekly e-newsletter with Tharp’s market views, commentary and current course offerings.

Key concepts that top-notch traders must master include proper position sizing (often not addressed), trading efficiency (eliminating trading mistakes), managing the risk-reward ratio, creating your own trading business plan, confronting and getting rid of your trading demons, understanding why exits are more important than entries, keeping a trading log and getting rid of all non-useful trading beliefs.  These concepts are hammered home many times throughout the book.  

Tharp believes that if a trader reads this book, takes the red pill (referencing the “Matrix” movie where Neo selects the red pill to see the world as it truly is), and follows its methodology, it will forever change his life by reprogramming him to operate at a higher level.  I suggest that traders not familiar with Tharp’s books consider reading the two mentioned earlier in addition to this one to better understand the author’s total approach and the reasons for his success in training and coaching hundreds of traders to excel on all levels.

Leslie N. Masonson is a day trader and the author of “Buy DON’T Hold” and “All About Market Timing,” (Second Edition).  Reach him at

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