Transformation Through a Trading Metaphor, Parts I & II by Van K. Tharp, Ph.D.

van tharp bkA note to readers: While Dr. Tharp’s content is timeless, this article is from our newsletter archive and may contain outdated information, missing links or images.

PART 1

Most of you probably know by now that our mission at the Van Tharp Institute is transformation through a trading metaphor. What do I mean by transformation? In this two-part article (Part Two coming next week), I’d like to cover several ways of looking at transformation including: David Hawkins’ level of consciousness model; the Matrix Model; and Going Beyond the Matrix. Let’s look at each of these.

Level of Consciousness

In his book, Power Versus Force, David Hawkins says that human consciousness can be measured on a log scale going from zero to 1,000. The level 1,000 is attained by only a very few masters — Jesus is one example. On the scale, 200 is considered to be the dividing line between constructive and destructive levels of consciousness. Below 200 are such emotions as anger, fear, shame, hatred, greed, pride, etc. In fact, let’s look at two specific levels, fear and greed. Fear, according to Hawkins, comes in at about 100 on the scale and greed comes in at about 125. Most people know that if you trade out of fear or greed, you will probably lose your money, and that’s because they are destructive mental states.

Acceptance, on the other hand, comes in on the scale at about 350. Now acceptance is a good state for trading because at this level you can accept losses and profits — both of which are a regular part of trading. In fact, acceptance of small losses is critical to successful trading. Thus, a minimum goal that I’d recommend for any trader is to reach a state of consciousness of 350.

So how do you measure one’s level of consciousness? David Hawkins says that you can measure it by kinesthetic muscle testing as long as the person doing the muscle testing calibrates at 200 or above — which is a minimum level for detecting truth. I have not been particularly happy with kinesthetic muscle testing as a measure of validity, however, Hawkins did say that one’s level of consciousness correlates with a person’s level of happiness. We measure happiness with a test that I developed. As someone goes through the Super Trader program, I like to see their happiness test scores get to 70 or above consistently by the time they finish the program. Below is a typical graph of what happens to someone’s happiness score when they are in the Super Trader program. The last two points on the graph show the increase in this Super Trader’s happiness score while making the transformations in the program. Most of the people who complete phase one of the Super Trader program end up with scores similar to this person although most don’t start the program at such a low level.

776 chart1

The Matrix Model

Most of you are probably familiar with the Matrix Model if you have read my book Trading Beyond the Matrix.

In the movie, “The Matrix”, we see the story of how we are all like robots living ordinary lives and acting according to our programming. We think we are free, but we are really just programmed to act as a society and Madison Avenue want us to act. Some of us might have an idea deep down that there is a better way, but we have no idea what to do about it. In the movie, the hero Neo is given a choice: he could take a pill to learn about how he is programmed. In our case, I’m inviting you to read my book. Once you realize that you have the ability to affect your programming, you can then start to reprogram yourself and function much more effectively in the Matrix. You can even move beyond the Matrix. This is the third model of transformation (which will be discussed in part 2 of this article).

The Power of Language

Two forces have the biggest effects on our programming — our language and our beliefs. Let’s talk about language in this article and then move on to beliefs next week.

In 1933, Dr. Alfred Korzybski wrote a very famous book called Science and Sanity. Korzybski was very impressed by Albert’s Einstein’s form of thinking which Robert Dilts wrote about in the book, Strategies of Genius, Part II: Einstein. Korzybski wondered why science was able to progress so rapidly while society and psychology were not. His main conclusion was that “the map is not the territory, but just a structural representation of it.” Science tends to use mathematics as its primary language, which is structural in nature. Every other subject uses regular language — which is very misleading.

This means that words do not represent the object they name. The word dog, for example, is not the physical experience of dog, it is a representation consisting of letters (symbols) for an animal. The way you represent dog internally does not equal the external reality. Korzybski laid out many presuppositions of his ideas but we’ll cover just ten from his book, Science and Sanity. By the way, in this discussion (as in Korzybski’s 900-page book) the words used cannot convey the actual reality but only the symbolic representation of it.

  1. The map is not the territory. We tend to live so much by symbols that very often, we fail to distinguish between our symbols and the reality to which we refer, between our maps about reality and the territory of reality itself.
  2. If we reflect upon our languages, we find that at best they must be considered only as maps. Words are not the things they represent. The words we use about an object never cover the whole object. Whatever we say it is — IT IS NOT.
  3. The world is made up of physical vibrations. Our senses interpret the these vibrations and turn them into experiences — but our experiences are not the same as the vibrations. Color does not exist out there in the world. Color is a transformation created by the rods and cones in our retina as they abstract a certain vibration in the electromechanical wave length. So seeing color is a map of the world but not the world directly.
  4. Reality is structural, not verbal. It has pattern, form, and shape. There is a structure in every experience and that structure is the only source of knowledge.
  5. An object has many characteristics such as macroscopic, microscopic, and sub-microscopic. Most of these characteristics are unknown to us and they are not included in the word we give it, the object’s name. The characteristics that are left out are decisive and imply that lower and higher abstractions must never be confused in the same way that the object and its name are confused. Everything is unique because no two things are exactly the same. In other words, nothing is identical to anything else. At a microscopic level or below, everything is different.
  6. Everything must be treated as whole. The mind, for example, is not separate from the body. Moreover, we are joined to all things at subtle levels. This is a holistic view of the universe.
  7. Identifying (by using the verb to be) is the big problem in human thinking, speaking, and responding. To the extent that you identify (or over identify) you are confusing the map and the territory. Me saying “I am Van Tharp” is an example of this. Instead, I am an ongoing process who, through conditioning, calls himself Van Tharp.
  8. The challenge is to not over-identify with your beliefs, understandings, decisions, or intentions with reality. The challenge is to stay present, current, open and flexible. At the opposite end of the spectrum, you can become a “true believer” of your beliefs — so much so that you “cannot be wrong” or you “cannot be mistaken.” Do that and you become a fanatic believer in your map. Problems, arguments, and wars are caused by over-identification or attachments to a particular map. To the extent you think you are right about any of your beliefs, you suffer from this form of “unsanity”.
  9. Aristotelian logic is absolutely misleading. In fact, anything on a verbal level tends to be misleading unless we recognize it for what it is … a high level of abstraction.
  10. The only similarity between a map and the territory is structural. Therefore, all knowledge is structural and we need language to focus on structure (as mathematics does) rather than high level abstractions.

In next week’s article, we will take these ideas about transformation and look at the other main area that Korzybski says affects our ideas about reality — our beliefs. We will also consider how someone might apply these concepts to trading better.

PART 2

In Part 1, we looked at Dr. David Hawkins’ ideas about the levels of human consciousness. We also covered the main theme in the Matrix movie and went over some of Dr. Korzybski’s presuppositions about being programmed by language, a poor representation of reality.

Korzybski says that in addition to language, we are programmed by one other main force — our beliefs. Beliefs might be described as sequences of verbal abstractions that are strung together and wired into our neurology. So what do you believe about yourself? For example, you might say:

  • I am a trader.
  • I am a losing trader.
  • I am worthless because I keep losing.

So each of those beliefs is a high-level belief — an identity level belief. In addition, each of those statements is an abstraction at a high level. And most importantly, each of those statements is a confusion of identity because you are taking one level of abstraction (yourself) and confusing it with another level of abstraction (i.e., whatever you equate yourself to be). All of those beliefs are nonsense according to Korzybski.

Dr. Korzybski used to do an experiment with his student to help them understand typical outcomes resulting from language and belief processes. Korzybski would plant a female stooge in the class and at a certain point, ask her to come up to his desk to get a box of matches. She would come up, take the matches, and then drop them all over the floor. Korzybski and the woman would then get into an argument and he would slap her (a light, stage slap — she knew it was coming and it didn’t hurt). At this point, he would observe that about 90% of the students in the classroom would go into an uproar. Their thought process might go something like, “He just slapped her; he shouldn’t do that; he is being mean. He’s a bad person.” These are semantic misidentifications that produce judgments and then the judgments produce anger. Meanwhile, the remaining 10% of the class would sit back quietly and pause a little so they could understand what was going on. And what was going on was a demonstration to show how our words and our reactions to them (based on beliefs) can get us into a “self-constructed” hell.

According to the model I’ve been using, however, some beliefs still might apply (and be useful) in some limited context. None of them, however, are universally true. In fact, “unsanity,” as Korzybski would say, is believing all of your beliefs. So as a trading coach and a transformer, one of my goals is to help people become a little more sane.

To become saner, you must begin to recognize what you are doing to yourself with your beliefs. You are re-presenting the world to yourself in a particular way by the words you use — words with meanings which might be useful in certain contexts. If that’s so, then keep the beliefs for those contexts. Quite often, however, many of our beliefs are not useful at all in any context (i.e. “I’m not worthwhile as a person.”) and should be discarded or replaced by other beliefs. You can do so by using the belief examination process that is given in Trading Beyond the Matrix and in our psychological workshops.

If a belief has charge — a strong emotion that you have stored which locks a belief in place, then you must use some sort of feeling release process to get rid of the charge before you can change the belief. Once you release the charge, then you can simply discard the non-useful belief or replace it with a more useful one. It’s that simple.

Transformation in This Context

The first transformation is awareness. It is awareness of the thoughts going through you. It is awareness that those thoughts are not you. It is awareness of when you attach to or believe in one particular thought flowing through you. It is awareness of the usefulness of a belief onto which you have grasped. It is awareness of a belief with charge — and when a belief has charge, then it probably isn’t useful at all.

When I observe an obviously charged reaction in one of my clients, I usually point it out, especially if that person is open to change. For example, if someone replies to something I said with some emotion that sounds anything like, “You are so disrespectful!” then that reveals a charge. I’ll probably point it out perhaps asking, “Do you have a charge on that?” If the person is aware, then they’ll notice it and say “Yes, that’s something for me to work on.” If the person has lower awareness, then they might respond, “See, that’s another example of your lack of respect. I try to point out something you shouldn’t say and all you do is come back with a trivial question.” That’s enough to tell me the person has a very low level of awareness and I will back off.

The second level of transformation is getting rid of charge and non-useful beliefs — that is you become aware of charged, non-useful beliefs and you transform them into something much more useful under a broad set of contexts. That’s what will allow you to perform at a super-human level in the Matrix. Imagine what would happen to your level of consciousness if you were to transform 500 to 5,000 non-useful beliefs.

So let’s think about the market. The market is a verbal utterance to which you give meaning — and the meaning you give it might not be the meaning I give it. The verbal utterance — “the market” is also just a symbol for some sort of ongoing process. “The market” is a map — but it doesn’t represent the territory. “The market” is not even a structural symbol for the territory of the market. A candlestick chart might perform that task a little better but even then you must ask yourself, “How have I distorted reality by representing the market with a candlestick chart — let alone the indicator I have at the bottom, a MACD?” Does a candlestick chart (or the MACD) in any way resemble the structure of many thousands of people trying to fulfill orders at a certain price right now? And is “that” the market? Perhaps the market also includes the attitude of many thousands of others who have open positions and will take a profit or become scared and want to get out at some other price. And how do you represent the attitude of many thousands of others who might be thinking about opening a new position sometime soon? Is all of that represented structurally by a candlestick chart with a MACD?

Moving Beyond the Matrix

In the movie, “The Matrix”, Neo gets reprogrammed and learns to operate in the Matrix at a superhuman level. He is able to fight Agent Smith effectively at this superhuman level but still, he is operating in the Matrix. At the end of the movie, however, Neo learns that even the Matrix is just an illusion. Suddenly, he’s able to go beyond the Matrix. He can slow down time and stop bullets coming at him. He’s gotten outside of the Matrix.

Is there an analogy here for trading? Can you trade “Beyond the Matrix”? I think you can.

On a quantum level, everything is vibration and/or particles. It’s all similar, all pure potential that’s being influenced by consciousness. Or another way of putting it might be that God is everything. A Course in Miracles can be summarized by its beginning statement. “Nothing real can hurt you. Nothing unreal exists. (Meaning what you make up with your thoughts). Herein, lies the peace of God.”

In our Peak 202 Workshop, Libby Adams presents the following model — you are a collection of parts called little “i”s who masquerade as you. These little “i”s speak for you a lot and they surround your Higher Self (Your Inner Guidance or Divine) which Libby calls the Big “I”. Libby presents a process she calls Transformational Mediation™ (shortened to TfM) which exposes the problem-causing little “i” parts to the Big “I”. The little “i” parts then either merge with the Big “I” or they are tossed aside. The result is a massive clearing. (See chapter 11 of Trading Beyond the Matrix.)

If you do this process enough, then you begin to trust your inner guidance more and more. Your inner guidance can begin to lead you. And if you do the process enough, then theoretically, all that’s left is the Big “I” or your Higher Self. When your Higher Self begins to advise you on how to live life, then if you are trading still, you are Trading Beyond the Matrix. And this is the third level of transformation.

References

Hawkins, David. Power Versus Force: The Hidden Determinants of Human Behavior. Sedona, AZ: Veritas Publishing, 1998.

Dilts, Robert. Strategies of Genius, Part II: Einstein. Capitola, CA: Meta-Publications, 1994.
Korzybski, Alfred. Science and Sanity, 5th Edition. Fort Worth, TX: Institute of General Semantics, Inc. 1954 825 pages.

Tharp, Van K. Trading Beyond the Matrix, New York: Wiley, 2013.

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