Why Aren’t We All Rich Then?
I often wonder… do we lose our common sense sometimes?
There are services that appear (and sadly disappear) everyday, especially on the web, that will hand you the exact tickers you should be buying and selling, when to open the position, when to close the position, and even how many shares or contracts to trade. This is usually without any regard to your personal portfolio makeup and/or your investing style. And, with derivatives being more popular now than ever, I am seeing more and more of these service dedicated to trading stock options.
The common sense question I always ground myself with is, "If it were that easy, why isn’t everyone signing up for these services. And, why isn’t everyone rich because of it?"
When I come across one of these services, I get this allergic almost gnawing voice in the back of my head that keeps saying, "Get rich quick… If it is too good to be true, it probably is."
Now, don’t think I am raising my nose at these services without basis… I admit, I haven’t signed up for one of these services in over two years… But, I do actually have my own experiences with them and they aren’t all that good.
Remember, I still consider myself as much a student as I do a resource for other traders. I, to this day, still buy into every course and service I can get my hands on, within reason. I, however, as I admitted one paragraph above, based on my own experiences, have already written off services that tell you what to trade, how much and when.
So, let me quickly tell you why I chose to blog about this subject today. But first, let me admit to you a guilty pleasure I partake in, usually over the weekends. I like to pick up the telephone and call members of the Trading Trainer community without notice. I think I get some sort of kick out of the surprise the person on the other side of the phone has when they realize it’s me.
Usually, I call members that have been posting on our members-only forum, that have been logging support ticket’s with our Trading Trainer support department, or members who have pro actively been speaking up in our members-only Monday evening Money Link webinars.
Usually I will try to see if there is a common theme of the week that I can use as topics of discussion when calling these members. This Saturday, the common theme of the week was ‘Services That Hand You Trades On A Silver Platter. You Follow Them And You Get Rich’. The sub theme was, ‘Comparing Services. Is Evaluating Portfolio Past Performance A Good Indicator?’
I have my thoughts on these subjects… And, the member’s I talked to definitely had their thoughts. (What came out of some of my members’ mouths downright floored me.) But, right now, what’s most important to me is your thoughts.
Please, take a moment and simply post a comment below answering these two questions:
- If you have any experiences with ’services that hand you trades’, what were (are) they?
- How did (do) you compare services?
Thanks in advance for your input. This will be interesting.
And, if you are curious about other’s experiences as much as I am, check back on this blog post often. Like I said, this will be interesting.
Best regards always,
A.J. Brown
Peter Chambers @ 11:27 pm:
I signed up with an option pick service that promised 50 plays 50 winners guaranteed.Another statement was 77.5% per recommendation for the entire subscription.There was one new trade per week and trades were held for 2-3 weeks or 4-6 weeks or 8-12 weeks.
Some of the trades were losers right from entry and were retired after 4 months.It was a white knuckle ride with $10,000 invested on each trade.In the weekly updates, trades which were losing were just listed as maximum gain 0% and when the trades were retired as they reached front month status,the percent loss wasn’t mentioned.Gains were calculated on maximum gains reached but I wasn’t told when to exit so I always made less than the gains listed by the trader.There were some large gains on many options.
I make my own decisions now as I didn’t like staying in a trade for months and I didn’t like waiting for large losses to turn into smaller losses.
I compared option signal services by looking at the percentage of winning trades.I looked for 60 to 100% of the trades to be successful.
Earlvin Harris @ 11:38 am:
Good point made by Doug - “The only services/systems/gurus I pay any attention to are ones that say, in some form, “This takes dedicated effort.” Everything else is snake oil.”
Anyone that often trade in the markets know it takes dedicated effort, at least to some extent. Those “get rich” programs that sound too good to be true mostly play on the speculators. Investors and definitely “smart money” can see right through them.
Ken Long @ 2:26 am:
WOW, I have also tried many of these services. I no longer follow any specific options trading service.
I currently use Zacks.com, premium membership, for fundamental ratings. I log their daily stock highlights into TeleChart for future reference, and build my lists from that and scans I run.
I also use OmniTrader to help find patterns within large lists. But I mostly look for stocks with a good range and supporting trend, and swing trade into the trend.
I have learned to follow all of the rules AJ has presented so far by the process of elimination and the school of hard knocks. However I am still experimenting with shorter time frames, spread trades, other trading vehicles, etc.
As for these other services:
Price Headley’s Option Shark cost me the most, both in losses and subscription price. It had a fantastic track record, I reviewed almost every trade for a year, and liked what I saw. I set it up with a 10K account on auto trade, with a 5% position size, and allowed it to lose half the account before trying to get out. Non refundable 3,000$ subscription. Ouch.
Steve Sarnoff’s Options Hotline. This was an early mistake. I wanted to learn and thought this looked good, learn and earn. A new recomendation every weekend, but limited details and no follow up. He would follow every trade but never offered sell advise. Every trade expired worthless. I promply quit and got a full refund. Amazingly in future promotions he was quoting the same trades as profitable. I did some research and realized that the only way he could claim those profits was by tracking the highest intraday price and claiming it as his profit. Some stocks never went his way, but he still showed a slight profit. Be suspicious of anyone who shows a profit of 10-15% after only 1 or 2 days when they’re aiming for home runs!
WaveStrength. The first service I subscribed to. I learned a lot from them, but found it imposible to follow the intraday trading alerts. Many good trades, but the cumulative results werent that good. Strictly short term OTM options on the index ETF’s. Unfortunately they tried to set in the market stops on these and got taken out unnecessarily all the time. They fed a lot of their subscribers to the market makers.
Bernie Schaefer. Anouther first newsletter, his basic service. Never followed the recomendations, but learned a bit about options.
Ken Trestor’s Options Report. Interesting service, but I canceled quickly. By this time I realized this was the wrong direction for me, and set about reading and studying seriously.
Tycoon Report. Great free service. I learned a lot reading Chris Rowe’s postings and mini reports. Very similar rules to AJ, mostly following the short to mid term trends with calendar and diagonal spreads. Not as many short term swing trades as AJ. Very dedicated to teaching. His trading service is expensive, $2500 on 50% discount, when open. However, I again cancelled, I realized quickly it wasnt what I was looking for.
I compare services by who gives me usable information.
I’ve learned that I dont care for services that try to feed me trades, with precise entrys and exits. I appreciate knowledge and assistance when reasonably priced. Anything to help speed and streamline the process of finding good potential trades.
I’ve found that it is more important to develop ones personal trading style than to follow any one person, no matter how good they are.
What I look for from blogs like this are new ideas and points I might have missed. I’m always willing to read trading tips and explore new ideas.
I’m very interested in Trading Trainer, your profits are far ahead of mine, and I agree with your rules and general trading style. However much of it still falls into that “to good to be true” trap. The profits are certainly possible, Ive seen them many times, but in the long run it comes down to personal effort and style, and building the skills and experience to work successfully and consistantly.
However, Trading Trainer is reasonably priced, and the pricing structure is very fair. I will join, although I’m not sure I can keep up with all the daily and weekly e-mails, and also study all the information you’ve collected, and be actively involved, while also getting my work done. But it is a wothwhile endeavor.
Ken
BobRagin @ 2:31 pm:
KEVIN
Great post Kevin. Sounds like you have been around the block…as have I. The “if it’s too good to be true” statement, that websites use, to try to steer you away from others, and try to get you to join THEIR site, works both ways. If their site was so great, why wouldn’t everyone be using THEIRS, and so on and so on.
also, I haven’t seen too many of the “silver platter sites” offer a “get rich” offer. Most just promise that they will make more profitable trades, than losing trades. Good idea to be wary of ALL sites until you feel confident in them, and don’t expect too much from them. I agree with you, I have engulfed myself with AJ’s site, and the time it takes to really follow the techniques, is far more than the 30 minutes a night that is advertised. But for now, I have the time to get the full usage out of the site.
A.J. Brown @ 3:34 pm:
Hey Bob… A couple of thoughts.
The primary reason we have found through market research that people stay away from sites that promote education and knowledge in trading over sites that promise delivering more profitable trades than losing trades, is because learning a skill is perceived as being harder than just having a service deliver trades to execute.
The secondary reason the research identified was that when people have a service that promises delivering more profitable trades than losing trades, they feel more comfortable because, should something go wrong, they have someone to blame. When people are presented with the opportunity to learn a skill, they, often subconsciously, steer away because of not wanting to take responsibility should they make mistakes.
As far as not being able to follow the Trading Trainer techniques in 30 minutes a night, I suspect if I were to look over your shoulder in an evening, I would find that you are not following the process exactly as I lay out. The Trading Trainer process can be performed in 20 to 30 minutes per night. I stand by that statement. We spend a lot of time in my apprentice program doing just that; focusing on time management in one’s trading practice.
Thank you Bob for your comments. I appreciate you for contributing to the Trading Trainer blog. Cheers!
Jim Collins @ 4:20 pm:
“If these “services” where (sic) making their authors so much money then why do they try so hard to sell them to the rest of the world.” The reason these guys sell their newsletter service is to provide a consistent source of income to pay their rent, mortgage, etc while they trade. This is the same as any other field.
And the reason that everyone doesn’t do it is because 90% of people are unable to follow simple instructions, or, politely speaking , could figure out how to screw up a good dream. How many of the original Turtle Traders were able to follow instructions?
The Downside of Stock Picks & the Importance of Mastery @ 9:15 am (Pingback)
[...] 2008 | Popularity: unranked | 0 Views Last week, I asked the question, "Why aren’t we all rich then?" I used this question to bring up the topic of stock-picking services and "experts" who [...]
Ralph @ 6:50 am:
Your asking the wrong type question. What needs to be changed is the following:Your site along with 90% of related sites, is one very professional MASTER MARKETING pieces. You do not in a genuine or honest effort try to give a REAL picture of the true success of your services. It comes down to almost All hype. !!! You present one of the most common marketing frauds by selling the SIZZLE instead of the actual Steak. In rare situations, but there are some, and i subscribe to a few of the BEST, you are actually given facts and figures,CURRENT performance, relating to actual performance of ALL recommendations. One that comes to mind is the 25 year publication by Dan Sullivan.There are a few others.They give a small candle of hope that honesty, integrity, ethics, and self dignity still exists in your profession.It is so REFRESHING when you come upon that rare site where the transactions, winners and losers are honestly presented blow by blow, with real numbers and performance. The individuals doing this seem to survive, have customers reorder and celebrate their success by being around 25 years or more.
A.J. Brown @ 10:37 am:
Wow Ralph!
I really appreciate your comments and you are for sure entitled to your perceptions.
(I did do a quick look up in the Trading Trainer member database. I found that, on a first pass, it looks like there is no record of you ever being part of the Trading Trainer Community of Like Minded Investors. Phew! That gives me relief given the implications in your comment.)
In the meantime, my only thoughts are, those services you are pitching, that have been in business for 25 years, at one point, were in service for just 4 years like Trading Trainer is now.
From the president and founder of Trading Trainer I eagerly look forward to the next 21 years!
Jay @ 5:14 pm:
AJ…I too have tried many "listen to me and I’ll make you rich" newsletters or websites. I’ve found all of them to be very disappointing. They all sound very good in their promo ad but don’t seem to deliver once I started trading their recommendations. I really want to be taught how to fish and not shown or told. The best service that I have seen in my 13 years in the market is Trading Trainer.com. Believe me, I’ve spent thousands of dollars on seminars, books, email services, websites… my list goes on and on. It would be embarrassing to list them all. All I can say is, go with A.J. He’s the best I’ve seen and I’ve been around the block… a few times.