Lying for a Living / Falsehoods from Vendorville
Gary Smith
A few months ago I received a letter from a frustrated trader. The letter
began by saying "I'm a desperate trader, desperate to succeed. I left my
job 8 months ago and was pretty optimistic I could make money trading. I
have tried to do everything right. I bought the best computer, the best
software, the best datafeed, had a mentor on daytrading the S&P, (who also
sold him a $2500 trading system in addition to his tutoring fees) and spent
hundreds of hours studying charts." The letter went on to discuss how he
worked two jobs for eight years in order to accumulate a trading stake of
$100,000.
Sadly, this fellow's $100,000 went down to $3400. He did everything he
thought was right but the most obvious. He didn't thoroughly investigate
his mentor. He was afraid to challenge him by demanding 18 months of
consecutive month ending brokerage statements to verify the mentor's claims
that he successfully traded for a living. After all, the mentor talked a
good talk and seemed so knowledgable. Plus, he ran ads in all the
"respectable" trading publications.
If our trader friend had done some homework, he would have found the mentor
was a lying fraud. This vendor didn't trade for a living, he made his
money preying on the naive. In checking the CFTC press releases, I found
this mentor was subsequently charged with a series of violations by the
CFTC ranging from fraud to cheating and misrepresenting his trading record.
This mentor had a friend in the vendoring business who he sometimes made
referrals to. His friend was also a lying fraud who advertised in all the
"respectable" trading publications. In an unrelated suit by the CFTC, this
referral was charged with promoting a fraudulent trading program, among
other things.
Now I'm not suggesting that every vendor who sells a $50 trading book or
$195 trading manual and claims to trade for a living, be subjected to
providing 18 months of trading statements. But when you get up into the
$1000 plus area, then it becomes incumbent on the vendor to validate
himself via a real money trading record.
I could tell you story after story of the fraud that is prevalent in
Vendorland. Instead, let me just relate a few. There's a long time vendor
promoting a $10,000 daytrading course for the S&P. In years past, this
fellow used to tell everyone how he has been trading for decades and never
had a losing month. Then Bruce Babcock did an expose on this vendor, and
lo and behold, uncovered the vendor had fabricated his trading history in
order to sell his products. Just recently, I talked with a well known
trading guru who trained this vendor in the 1980's. He told be that far
from being a successful trader, this vendor was destitute when he trained
him.
In 1992, I spoke at my first and maybe last seminar. (I usually refuse
seminar gigs because most of the speakers are academicians out to sell you
something) Anyway, one of the attendees latched on to me and spent most of
his time relating his trading woes. He had lost over $100,000 trading the
NYFE. Well, about two years later, up pops this loser as a vendor. But
now he was telling everyone how he had always traded successfully for a
living.
About six months ago, I saw a suspicious ad in Investor's Business Daily.
Someone was selling a $2500 trading system based on the internals of the
stock market. Since I'm one of the few traders that use the internals in
trading futures, I gave the vendor a call. Turns out he had read my May
1996 interview in Stocks and Commodities magazine. Based solely on that
interview, he somehow concocted a $2500 trading system, telling traders he
used it to trade for a living. Which of course was not true.
Another vendor I've crossed swords with is a trader who sells
ultra-expensive systems as well as a fax service. He makes outrageous
claims for his systems in all the "respectable" publications. Trouble is,
these claims are completely false. The traders who have used his systems
and subscribed to his fax service say his figures are pulled out of thin
air. Naturally, this guy also uses as a marketing tool the lie that he
trades for a living.
One of the most prevalent scams, and one that is commonly practised in
misc.invest.futures, is for someone to suddenly appear on the scene and
contribute literate articles on the intricacies of trading. The writer
will say how great of a lifestyle it is to trade for a living and wouldn't
you like to join him. His articles are so professionally written, it's
hard not to believe the vendor can't trade for a living.
This scam was taken to it highest form a few years back in a trading
publication. Month after month we were told by a vendor how he masterfully
traded for a living. Before long, the dogs were barking louder and louder
for this vendor to impart his great knowledge onto them. Of course, this
budding vendor was more than willing to oblige since that was his intention
from the beginning. Now he's out there taking thousands of dollars from
unsuspecting saps.
There you have it. Just some of the stories of the vendors who lie for a
living. If a vendor tells you he trades for a living or implies it, and
wants thousands of your dollars, demand documentation in the form of real
money trading statements. And NEVER, EVER give money to a vendor based on
references given to you by the vendor.
Personally, my opinion based on my knowledge of most of the vendors is it's
a complete waste of money to pay anyone thousands of dollars for them to
give you the secrets of the game. There are no secrets. You can learn
just as much about trading in the $50 books than you can the expensive
alternatives. And besides, all the knowledge in the world about trading
rarely translates into becoming a winning trader.
Gary Smith
Shelly Weiler
On 24 Oct 1997 21:28:01 GMT, "Gary Smith" <hiy...@caveland.net>
wrote:
Lying for a Living
<snip>
God, and here I thought this was going to introduce me to a new
newsgroup about politics:-)
*Outlaw spam*
{note email address-remove nospam}
Shelly Weiler - she...@cloud9.net
prestel.co.uk
Trade confirmed from: "Gary Smith" <hiy...@caveland.net> Order
details:
>Personally, my opinion based on my knowledge of most of the vendors is it's
>a complete waste of money to pay anyone thousands of dollars for them to
>give you the secrets of the game. There are no secrets. You can learn
>just as much about trading in the $50 books than you can the expensive
>alternatives. And besides, all the knowledge in the world about trading
>rarely translates into becoming a winning trader.
>Gary Smith
>
Yep, every trader whether new or old should have the words ' Only
Failed Traders Sell', tattooed on their foreheads !
Okay there may be that 1% or less who do also trade successfully, but
with odds like that would you take the risk ? !
Personally, Ive never felt the inclination to buy systems or go to
seminars, always seemed fishy to me, why they sell when they could
make plenty trading ? The only thing that I fell foul of, were the
gazillions of trading books stacked on my shelves, I'd say 50% of
which are rubbish, still its better to risk $25 on a book than $2500
on a suckers system.
The only thing people will learn from a newsletter publisher is how to
make a multi-tude of vaugue open ended forecasts that can be construed
in what ever way the publisher wants so as to support hypothetical
performance ratings. At best you'll get snippets of info on techniques
that are much better learnt from a couple of good books.
Know this that no ones going to sell you a WINNING system !
Mr 50%
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