How to spot a trading snakeoil salesman

Discussion in 'Trading' started by 1a2b3cppp, Jun 12, 2012.

  1. (posted in the main forum so all the noobs will see it)

    Anyone teaching a trading system, or claiming to be a "guru" or a "mentor" should:

    1) acknowledge all losing trades from their system (as opposed to banning you from their chatroom if you mention a losing trade)

    2) be overall profitable. Not every trade or every week, but ideally every month, especially if they're a day trader. Special exceptions can be made if trades are held longer than a month since you might be in drawdown in an open trade at the end of a given month.

    3) not talk like a fortune cookie. Clear and precise answers should be given to all questions. Not double speak, not vague nonsense, not "do what price tells you to do" or "if you can't tell what is going on on this chart you have no business trading," and certainly not any nonsense like "I don't need a weatherman to tell me if it's going to be raining 5 minutes from now." This is the absolute #1 giveaway of a scam artist yet so many people don't see it because they want to believe.

    Other giveaways:

    Someone posts complex charts with simple joking comments on them, talks about how much money they make, how trading is so easy.

    If they are asked a direct question, they with either a) ignore the question or b) reply to the question with misdirection. Answering the question directly would reveal that they have no idea what they are talking about and the gig would be up.

    If they are asked a question from a noob, they will reply to the question with vague ambiguity and a joke. The noob, who wants to believe, will assume he just isn't on the same level as the "guru" and that he must study harder. This is called fortune cookie wisdom.

    They may try to sell you shit via PM, etc. Lessons, courses, "mentoring," etc., all without any proof whatsoever that they actually have a profitable system.

    This list isn't complete. Feel free to post more!
  2. I was always under the impression that anyone selling anything in this business is a snake oil salesman. Unless its for a data feed or a news service, once the words "sign up here" or "insert credit card information" come up that is when you should run.
  3. You can also end up not spending any money but wasting a ton of your time trying to make sense out of some of the over-complex nonsense "systems" people have posted here over the years.
  4. ocean5


    Meanwhile,i`m gonna insert my credit card today-today,is a wonderful day,by the way...

  5. It depends on how much your time is worth. I do enjoy occasionally reading some of the "systems" or journals on ET, but only for entertainment purposes. Nothing beats some self proclaimed guru starting a journal and spewing paragraph after paragraph of senseless self propaganda, only to have their account lose 50% by the 3rd page of their journal.
  6. if a real guru, they would NEVER reveal the true loss in the journal.

    I would simply say that some emergency came up and the system didn't trade that day.

    Or they actually were (position) in this stock and made well more than any loss people think they might have taken.

    first ask for a picture of their house.

    then of their car

    and keep going until they get so mad they have thrown their computer out the window and can't log-in.
  7. Better watch out for people who claim to make live calls! Some will cheat! For example calling entries but not always calling the exit when it goes against him. But always gloats for hours/days when he does get a good call. There was a guy on TOS who would do that--he'd have a couple of losses in a row then the 3rd trade starts going against him and he disappears. Then he reappears a half hour later announcing a profitable exit for a trade he never announced the entry for. Also after a good day there'd be a flowery gloating email recapping the days successes, but after bad days there would be nothing!

  8. of course. their job is to make money and be looked upon favorably. why shoot yourself in the foot if you can somehow escape that. your boss would rather you get their money at all costs, since nobody is going to sue. if i was doing a class and trying to sell it for $1,000, of course you do all the games. buy ES and sell NQ and then only look at the one that worked.

    unless it's total disclosure, you are being lied to. they would rather talk to you for 100 hours then show statements. throw 100 people into a seminar, sell maybe 5, get their money, and then who cares if they lose it all. if they win, get a testimonial. if lose, tell them it was their fault and sell them more stuff until they have no money. this is a game of selling!!!
    #10     Sep 11, 2012