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Building Your First MR Trading Plan: A Tharp-Based Process for ES Futures

by Tom B. & Greeny (Synthesized from 6 Van Tharp Books) (2026)

Quick summary - an in-depth PhD-level extended summary (10-30 pages) for this book is coming soon.

Building Your First MR Trading Plan: A Tharp-Based Process for ES Futures

Author: Tom B. & Greeny (Synthesized from 6 Van Tharp Books) | Categories: Day Trading, Trading Psychology, Position Sizing, Risk Management, Trading Systems, Mean Reversion

Executive Summary

"Building Your First MR Trading Plan" is a beginner-level workbook that guides the reader through Van Tharp's frameworks to build their first mean reversion trading plan for ES futures. Structured around Tharp's trading hierarchy (Psychology 60%, Position Sizing 30%, System 10%), it covers self-assessment and belief examination, the 6 market types, a 2-lot proof-of-concept structure using Dick's half-position exit method, the CPR position sizing formula, a complete daily routine template, and a simplified 8-component trading business plan. Every concept is sourced from Tharp's six books, with ES-specific examples using structural levels (Value Area, VPOC, fuel/stops) and the matrioshka principle. The book is designed for someone with general market literacy but no futures or Tharp experience -- all terminology is defined on first use.

Core Thesis & Arguments

Most traders fail because they obsess over entries (10% of results) while ignoring position sizing (30%) and psychology (60%). This workbook inverts that priority by starting with self-examination (belief audit, trader archetype identification, commitment exercise), then building risk management and position sizing rules before any discussion of entries or setups. The prescriptive 2-lot ES structure -- Contract 1 exits at nearby structure for risk recovery, Contract 2 trails for larger R-multiples -- provides a concrete, minimum-viable framework for proving a mean reversion system works before scaling.

Key Concepts & Frameworks

  • Tharp's 60/30/10 Trading Hierarchy -- Psychology, Position Sizing, System (Source: Super Trader)
  • The Lotto Bias -- Why obsessing over entries is the #1 mistake (Source: Trade Your Way, Ch 2)
  • R-Multiples and Expectancy -- Universal measuring stick for trade results (Source: Trade Your Way, Ch 7)
  • The Marble Game -- Workshop exercise proving position sizing determines outcomes (Source: Safe Strategies, Ch 14)
  • Belief Examination (Simplified) -- 5-prompt self-audit adapted from Tharp's 6-step paradigm (Source: Trading Beyond the Matrix, Ch 8)
  • 7 Trader Archetypes -- Dick (band/swing trader) as MR model (Source: Trade Your Way, Ch 12)
  • 6 Market Types -- MR works in Sideways Quiet and Sideways Volatile only (Source: Super Trader; Trading Beyond the Matrix)
  • CPR Position Sizing Formula -- C = P x R, solve for position size (Source: Safe Strategies, Ch 14; Trade Your Way, Ch 14)
  • 2-Lot Structure -- C1 recovers risk at nearby target, C2 trails for larger move (Source: Trade Your Way, Ch 12)
  • Daily Routine Template -- Pre-market, during session, post-session with specific tasks (Source: Financial Freedom Through Electronic Day Trading; Super Trader)
  • 8-Component Business Plan -- Simplified from Tharp's 15-component framework (Source: Super Trader, Part 2)

Practical Applications

  • Building a first-ever futures daytrading plan from scratch
  • Learning to think in R-multiples instead of dollars
  • Structuring a 2-lot mean reversion proof of concept on ES
  • Classifying market type before trading each session
  • Establishing daily risk limits and a mistake-tracking journal

Strengths

  • Teaching-first approach: every Tharp concept is explained from scratch with ES dollar examples
  • Hybrid style: prescriptive where it matters (risk rules, CPR, drawdown tables) and workbook where personal input is needed (beliefs, system design)
  • Source citations throughout allow the reader to go deeper in any area
  • The 2-lot worked example with full dollar math makes the abstract concrete

Limitations

  • Deliberately does not prescribe specific MR entry signals -- Tharp's philosophy is that the trader must design their own entries
  • ES-specific examples may not directly transfer to other instruments without adaptation
  • The simplified belief examination and 8-component plan are starting points, not the full Tharp treatment (see the Intermediate and Developing editions for deeper coverage)

Notable Quotes

  • "The Holy Grail of trading is inside you." -- Trade Your Way, Ch 1
  • "You cannot trade the markets. Instead, you trade your beliefs about the market." -- Trade Your Way, Preface
  • "It's insane to expect one system to work in all market types." -- Trading Beyond the Matrix, Principle #34
  • "Risking 2% is a LOT, not a little." -- The Definitive Guide to Position Sizing Strategies, p. 130
  • "A mistake means not following your rules." -- Trading Beyond the Matrix, Principle #8

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