Can't show real money equity curve true or false

Discussion in 'Educational Resources' started by Lucias, Aug 4, 2011.

  1. Lucias


    I was speaking with a rep from TradingAdvantage. They show an excel spreadsheet that produce 120k on a 5k margin. They just show the monthly profits of what was "called in the room". I wanted to know why/if they did this with real money. This is what I got over the phone:

    Does Dan take every trade with real money?

    This is education.. blah blah blah

    Can you show me the real money results from Dan's room?

    No. that's illegal. They'd shut this place down in a heart beat. You will never get the real money results from us. We are an education service. blah blah blah


    I want to know if there is any truth about it being illegal for an educational service to show their real money trading results. The only thing i can think of is that it would be illegal to show sim results and claim they were real money.

    He said NFA.. SEC.. blah blah would shut them down. Bone, what do you think?

    Scam vendors have been using this line for years. I'm calling BS.

    My question is there any truth about it being illegal to show real money equity curve for real money trades?
  2. Their business model is a contradiction in terms - they claim to "teach you how to trade" but that must imply to "trade profitably". And yet, none of them offer any evidence whatsoever that ANYONE either working there or their customers "trade profitably" using their taught methods.

    Unless you know someone personally who uses their methodology and makes money doing so which you can see for yourself, I see no reason to believe any of these "teaching courses" are worth more than a couple of books on "how to trade".

    As for their excuse about showing real time or ANY results, CTAs do it every month.
  3. bone

    bone ET Sponsor

  4. Lucias, tons of sites like this do qualify as educational only, and, whatever results they show you I'm sure carries an enormously obvious disclaimer as to potential results and past results if not real do not necessarily mean that their methods are any worse than anybody elses.

    They do qualify as educational, but you'll need to talk to someone or hang around for a while in the room to see how they do. $120k off $5k does not sound at all realistic, unless it's like a ten or twenty year time frame. I would avoid them.
  5. Lucias


    Bone brings up a good issue which is the types of verifications I believe a legit vendor should produce and the type most will not produce. I've always been consistent in what I've claimed that an educator should produce, and I've stated I want to see either:

    A. A third party audited hypothetical record
    B. A real money track record

    Now, what TradingAdvantage sent to me was what most scam vendors send out: a spreadsheet that states how much they made without any verification. Again the key point is I don't trust results on a random website. Okay that's the key point is that I don't believe its good business. Most of these results are also very incomplete and leave a lot of questions too.

    My trades at C2 while simulated are placed in real-time, they aren't backtest, and most importantly, I can't go back and make stuff up or change my calls in hindsight. You can see exactly if I were using markets or limits and then get some idea of how realistic my method would be for you. It also shows the open trade drawdown and other very important metrics. This is completely different then a spreadsheet which claims so many points were made per month. It is completely different and a lot of beginners may not understand how important that difference is.

    Really there are a few kinds of results, and I want to share those for your benefit:

    A. Website or random statements produced by vendor. Worthless
    B. Backtest. Very useful but not enough.
    C. Audited third party hypothetical. Good to very good.
    D. Real money verified/audited. Best. Actually C is in some cases better. The reason that D is good is because they know if they lie about this then they break the law. However, several have been caught lieing In that respect, C is better because you know what you're dealing with.

    Ideally, you'd get B, C, and D. That would be the ideal case. B would tell you historically what you are dealing with, C. would demonstrate it worked in real-time, and D. would confirm that there wasn't any slippage or other limitations.

    Also, what Bone has stated is misleading because since April I've taken every trade in either of my systems with real money on the line. He is correct in that I've never placed a futures trade but I've had real money on the line on every single trade using the spreads at Nadex. My journal is here for those who care.

    I want to make it clear that I don't have anything against people on simulated accounts and teaching provided that they make it clear they trade simulated, have sounds reasons why they aren't trading with real money, and they articulate that well. Provided they are trading in a disciplined and realistic way then it really is a moot point if they could trade as well with so call real money on the line. I'd rather follow a sim trader who used skill and discipline then a trader like Rob Hoffman who averages down until his account triggered a margin call

    Bone has this tendency to take pot shots at people and do underhanded things. In this case, hopefully I've elucidated my logic and it makes sense.

    One other thing that plays into this is what I like to think of as a hurdle ratio. My trading systems return about 50% to 120% historically per year at a maximal leverage. This is a great return but I feel would take significant risk in seeking these returns. My system uses a huge stop in the order of 30-35 points or around $1500. This means that there is a larger hurdle for me to trade this system. I take every trade now using the vertical spreads. But, I could see someone not wanting to trade my system even though it is profitable and there are some system developers who don't trade their systems.

    You see there is this concept of the hurdle. Even as risky as my system, I'm always trying to get my money in on it. It can be difficult to get find the spread that allows me the leverage I need. But my point TradingAdvantage claims to do 120k on a 5k account using a 2 point stop.

    The hurdle ratio is so low that it is completely unbelievable that they wouldn't trade this with a real money account if they had any way too. Now, we know they have money and they claim trade with real money accounts too. The concept is as the hurdle ratio drops then the amount of evidence required goes up. This is a very concept and actually helps to explain why my claims have a much higher veracity then most other vendors claims. Another thing that makes it unbelievable is that if they were to audit their real money results then they would have a very powerful sales tool and given that, again it just doesn't make sense that they wouldn't do that. Another red flag, is they are fine with telling how Larry made a real 2 million in the market right. So, why not show they are doing today. I want to make it clear: I belive what they claimed is complete BS.

    Again I never claim to have any capital. I've been a primarily a simulated trader and while my systems and methods are hugely profitable and my ability to predict is probably among the best. The hurdle ratio is still rather high. If I claimed to do 120k per year on a 5k account with a tiny stop then the hurdle ratio would be so low that I'd agree that I'd need to produce real money results, as well. Because with 5k, I can come up with 5k and make 120k then even I could do that. So, there wouldn't be rational arguments and with such a small stop again that reduces the risk. With my system, even though I could probably wing on a 5k account then I would still be at risk of blowing out the account and I wouldn't be able to take my discretionary trades which I highly value. Obviously, I'm always trying to improve and certain I'd like to believe it was possible to do these claims. Hope is good but sound logic is certainly the deciding factor.

    Hope this helps.

  6. The whole 'we can't possibly show you real $ results' is the perfect out for these people. And you'll find it in just about any room/service you visit. Ask them to show you the SEC/NFA rule that states by them showing you they actually make money it's illegal -- but showing fake $ results is great...

    Here's what I know - if I had a product like this I was selling and it worked, I would want to show you quickly unless it was in fact against the law. Assuming it isn't, then why would I not want to show you? I think the answer is clear.

    You can ask every vendor on emg's list and I'd guess all of them will have some variant of the 'can't show you' as a reason for not being able to show you.
  7. bone

    bone ET Sponsor

    Dude, you are downright delusional. You returned 4.7 % in 2010.
  8. Lucias


    Bone, you've a lot of animosity. You like to distort facts, leave out information, run down people who've made it to the most prestigious hedge funds in the world, etc. I don't know if you are any good at trading but you've got some serious personality issues.

    I've no animosity in the world. I'm a fool.. Hint: I call myself Predictor
  9. bone

    bone ET Sponsor

    You call yourself one of the best in the world at what you do and proclaim yourself to be one of the very best market 'predictors' in the world (you do that here on ET), you sell a trading system based on simulated and hypothetical results, and you returned a bit less than five percent for 2010. No distortion - your returns are published on the C2 website.

    Again, you are delusional. And your opinion of yourself apparently entitles you to troll my posts and pass judgement on me. You are an illusion unto yourself. You are a hypothetical.

    Dude, where does a five percent return for 2010 qualify you as 'one of the best in the world' ?
  10. Lucias


    Bone, why do you leave out the 2011 returns? Why do you leave out my sharpe ratio or my other system that is on track to return 60% this year? Why don't you share my CALMAR?

    When I started my system, it was only to track/verify my predictions. I wasn't gearing it to make the most profit. I recognized I was underleveraged and rescaled the system after a few months. My goals changed. My risk adjusted returns and sharpe have been quite strong.

    In fact, if you look at my system out of all long term tracked futures systems -- both of my systems -- are in the top of the ones tracked at C2 and my rating is nearly 1000. These are quantitative measures of my performance.

    Again, when I started I wasn't using enough leverage but my goals were just to verify my calls on my website. It was only after about 6 months to a year that I started to treat it as a trading account, i.e with profit goals. And, yes I'm one of the best in the world at what I do.

    I don't have any money but if you want me to make a public call and a challenge with a prize reward then I'll do it. If it is worth enough, if I lose I'll take down my website. If you can make it worth enough for me.

    #10     Aug 5, 2011