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Let me ask you several questions. |
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1. For a few thousand dollars you can buy many programs that promise to reliably make you several hundred percent. Why, then, is such a program for sale? Why doesn't the programmer start a hedge fund or become a commodity trading adviser (CTA) and earn many millions more? |
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2. Why doesn't a newsletter service allow you to see its past recommendations? |
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3. Why is it that most newsletter writers offer only generic-type entries? For example, they say that support for gold is at 300. They don't say buy gold at 300.5 and place a sell stop at 270.5. Why is that? |
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4. Why is it that the best hedge funds, mutual funds, commodity traders, and CTAs all use different trading methodologies? |
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5. Why was it possible for Bernard Baruch to amass millions (and keep them) back when the word "computer" didn't even exist? |
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6. Why is it that everyone seems to talk about Jessie Livermore as one of the great all-time traders, when in reality he committed suicide and was dead broke? (This last question is a pet peeve of mine; however, it is important.) |
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Sorry, folks. There is no easy way to make millions from thousands, without a lot of very hard work. As P. T. Barnum said, "There is a sucker born every minute." Substitute loser and you have the trading scene pretty accurately portrayed. |
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About now you are probably saying, "Well, wait a minute. What about that 10 percent of traders who make it?" Good question; let me address it. It seems that just about everyone recites the statistic that 90 percent of all traders lose, and 10 percent win. Just about all novice traders hear this and think, "Well, if 90 percent of all traders lose, then 10 percent win all the money the other 90 percent lost. Since I am smarter than most, I too will get into that 10 percent winners' circle, and get rich." |
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Implied in this reasoning is that 90 percent of all new traders lose, and 10 percent of all new traders win. Again I have to get my trusty pin out, and pop yet another bubble. The statistical 90 percent is on all traders in a year. Hence 10 percent of all traders make money. Now let us think for a second. Only 10 percent of all traders make money, and more experience is likely to improve their chances of success. By definition, a novice trader |
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