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New traders conned

This morning I receive yet another email from somebody selling a system for beating the markets, subject to terms and conditions. It’s some software that runs on their server, that gives off signals when to enter long or short. Cost? USD $x9x down from $xx9x – and one is offered some ‘ultra’ indicator as free. Links to the advert are tracked, so that ‘they’ can monitor who clicks what in their emails. The adverts usually have a set of testimonials from folk who nobody really knows,  saying how great it is. One almost never sees adverse comment on these things.

What are they actually selling? Ultimately it’s about a packaged ‘edge’ on the markets. So, they’re selling a thing which if you use, would give you an advantage in beating the markets. This is obviously designed to make you more dosh than you might without it. There is the usual fat disclaimer in these emails and adverts as you would imagine. What this means in essence is ‘…buy from me, but if you lose your money using my stuff (or advice) – sorry that’s your affair, as although I talk about predictions, I can’t guarantee the future or a positive outcome‘. So – spend your money to get something that could make you rich(er) but you could end up with nothing or lose far more than your capital outlay. I’m sorry – this is a dumb deal. How? The advantage is not really for the purchaser – not nearly fair advantage. The overall advantage is to the seller in scenarios where the probability of loss approaches on average 90%. So this is not like buying a fridge from Currys!

If these indicators or strategies etc can give everybody an edge, then surely ‘everybody’ should spend around $1000 to enhance their whole-life’s earnings. Of course, the people who sell these things never state explicitly that their ‘thing’ gives an edge. Let’s not play with words; they are selling an edge. Sure – they never denied or withheld that a whole lot of training and experience are necessary to use the thing they’re selling effectively. Nonetheless, it means that everybody of sound basic intelligence who gains the experience and training with their system can become rich – is the implied meaning. The main ingredient is actually training and experience, using any ‘device’ that could beat the markets. So it’s like giving a scalpel to an ordinary person and saying ‘Use it cautiously and you may save lives, but if you don’t you could kill somebody‘.

But in financial trading the big issue isn’t simply with knowledge, experience and skill. How? Because the big hidden dimension is ‘individual psychology’. What does that mean? Well it means that ‘you’ could give 100 people all the knowledge, skill and experience (KSE) required to operate a system or methodology, and 90% will still fail to be consistently profitable. Why? Because the 90% will not have conquered limitations in their psychology – hence all the KES is overridden by a ‘hidden force’.

But some argue that their thing is just a short cut. Wrong! There are no shortcuts in financial trading. From my own experience and that of successful traders, if you don’t do the time, if you don’t feel the pain of loss, if you cannot change your mindset, if you haven’t learned how to manage chaos – no system out there is gonna give you an edge.

Conclusion

The whole business of selling systems, methods, indicators – and the like – is about selling dreams to fools. I can expect fierce disagreement of the type that ‘there are some systems that may give people an edge’. Those who believe that sort of trading should sign up instantly for the Quantum Code or the Quick Cash System.

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