I don’t know if it’s news to you or not, but I heard over at Dennis Becker’s Earn 1K A Day online business membership siteThis is an affiliate link. If you click on it and purchase the product, I will receive an affiliate commission. Using this link to purchase this product enables you to show your appreciation and support for this site at no added expense to you. I am grateful for your support. that credit card processing companies have started refusing to accept transactions for “FOREX related products” (if you’re already a 1KAD member, you can read the thread by clicking here). The primary targets seem to be those that educate and those that sell software.
Good. Very good. Excellent.
Hit And Run Software
As I’ve mentioned many times on this blog, my search for an automated FOREX trading system has been an exercise in frustration. I’d venture to say that 99% of them flat out don’t work, primarily because they aren’t sold by those with FOREX experience — instead, they are sold by shady people who kludge together a system that works, then sell it in hopes that the thing remains profitable until the refund period expires.
I’ve even found evidence that there are “serial FOREX scammers” (and I don’t use that word lightly) because I’ve found FOREX launch after FOREX launch — all of which have the same basic sales letter, sales funnel… And I’ve even found evidence that suggests that the same entity is behind many of them. Patterns jump out and practically scream at anybody with analytical training (like me)…
Even The Good Is Bad?
I’m currently evaluating one FOREX expert advisor that I’d would put into the 1% “good” category (no names yet), but that one is frustrating me to no end. It’ll take off like a rocket on a trade — in one case, it was up 1% of my entire balance in the space of a few hours! — but then will let all of the profit go away while it falls to nothing, if not lower. Today’s “to do” list consists of searching through the documentation to see if I have something configured improperly. And this one is NOT a “set it and forget it” system; it requires weekly maintenance.
So while I’m still hopeful that I may have found THE system, I’m not holding my breath. I have a 90 day guarantee (and at least the owner will still be around, as he has been for some time now — yes, I did my homework), so I’ll give it a few more weeks before I throw in the towel.
…Those Who Can’t, Teach…
That leaves the “educators”. I’m also skeptical of them. Again, no names, but one that I have been following seems to throw out his gained knowledge one piece at a time. As a result, he is in continuous launch mode, ready to take your profits (if you somehow managed to snag some) for the “next best thing”. That is a business model you can use, but it gets old fast if you’re the customer.
Yuck. Yuck. Yuck. While I don’t expect anything to be free, I do expect my so-called “return on investment” to be multiples of whatever I pay for the course. So if I pay $1,000 for a course, I expect $10,000 in return — within a year. $2,000? $20,000 in return — within a year. Do that and I’ll gladly fork over some of my cash.
Haven’t experienced that yet… So I’m not going to cry for most of the educators out there. They seem to rely on selling their education to make money instead of relying on their FOREX trading skills.
A “What If?” Exercise
If I were to start over with FOREX and investing today (which, in a way, I am doing), here’s what I’d do:
1. Learn how to read, interpret, and analyze charts. I’ve been trained in analysis and in spotting patterns. I also believe that people trade technicals and news nowadays, and all that is in the charts. It’s just a matter of learning how to interpret them. Nobody can be right every time, but I’m confident that I can be correct 70% of the time once I gain some experience (and thankfully, there are “paper money” accounts you can learn on). That’s enough — as long as I stick to the rest of my plan…
Thankfully, I’ve been able to pick up some great investment books — books that would cost you well over $50 used on Amazon — for pennies on the dollar. The one I’m reading now (“The Visual Investor” by John J. Murphy) cost me a grand total of $1.99, plus tax. Yeah, used book stores are great, especially the one I use!
(By the way, it’s not that hard to learn how to analyze something. Just study the thing you want to learn to analyze a LOT. Eventually patterns and “unusual” will jump out at you, and you’ll learn how to take advantage of it.)
2. Develop a plan and stick to it. This prevents you from doing something dumb because you got emotionally involved in a trade. If your profit target is 40 pips and your trade hits 45, get out. Or set a stop loss at the 40 pip profit level. Or whatever your plan is. Just have a plan before you enter a trade, then stick with it until you exit the trade.
One thing about this, though: Evaluate your system between trades. Can you tweak it to be more profitable? Did something happen during the trade that you need to consider before your next trade? Always Be Learning.
3. Understand thoroughly the market you are in. Trading stocks? Learn everything you can about what you are buying. Options? FOREX? You’d better be an expert. Figure out how to make money, and perhaps even more important, learn how to avoid losing money.
4. Understand the risks you face and develop mitigation strategies. That’s one thing I love about this current automated FOREX system that I’m testing; the risk management instructions are very clear. If I have $1,000 in my account and I’m willing to risk no more than 1% per trade, the software exits a trade when I lose $10. Increase it to 4% and I’m gone once I’ve lost $40. No more “surprises”, i.e. waking up in the morning to see that I’ve lost 5-10% of my account when I thought I’d only be losing 1%.
Understand risk. Develop methods to mitigate it (i.e. stop loss at 1% of your account value). And only assume risks that will allow you to sleep at night (and pay the rent).
The Man With A Plan (Almost!)
So my current plan consists of reading every book I can get my hand on insofar as technical analysis and FOREX go, taking lots of notes, then squeezing a system out of it. I think that this is what most people do, and once they get there, they use the system. They might share it with a few friends, but I don’t think that most people would sell a successful system to zillions of people. And that’s why I’m a bit skeptical when somebody tries to sell me such a system.
And which is why I’m not crying about the FOREX software and education markets being cut off at the kneecaps by the credit card companies. Hey, guys, if you’re stuff is so good, why not just take your profits and go out and work your systems?
The silence speaks volumes!
My Other “Option”
There is only one system (an options trading system) that, to this point, has been worth the money I paid for it. The rest were either overpriced or a plain old fashioned rip-off. But all it takes is one system, right? Nevertheless, I would find it hard not to roll on the floor laughing if some of these so-called FOREX “gurus” were to become the victim of an incurable flea infestation… (OK, I do learn at least something from most of the things I buy, but still, gimme a break, guys! You know your junk is overpriced.)
But getting back to that one good system: I purchased the right to sell this course myself because I think it has potential. Potential. Unfortunately, the guy who created and sold the system (bless his heart! I really do like and respect the guy) can’t, in my opinion, teach his way out of a wet paper bag…
So I’m slowly weeding my way through the system and creating my own teachable version of the thing. Sure, you can buy the system online now; in fact, you’ll have your choice of vendors. But those are the people who are selling it to make a buck; they aren’t interested in teaching options trading.
See the difference?
Teaching – But With A Difference
Once my course is ready — even though it will take considerable time — I’m actually going to teach it. If you’ve ever taken an online college class, you’ll know what to expect. Twice weekly meetings. Homework. Study. Exams. And you won’t get Options 201 until you successfully complete Options 101 — with a passing grade. And I’ll be charging for it just like you’d pay for a college course (in other words, you’ll pay for my time, textbooks, etc.).
I won’t just throw a bunch of garbage at you and run away as I charge your credit card. Heck, it looks like I won’t be able to charge your credit card any more… (checks and money orders will most likely be the order of the day!).
So there’s my current FOREX ramblings. And be forewarned; there’s another major FOREX launch on the horizon (no matter when you read this!). It’s going to promise you the world. Please don’t fall for the hype. Get your basic education first.
Now THAT’S something I might be able to do for you all… A basic “go here to learn about FOREX” education directory. One that won’t cost you an arm and a leg (I’ll settle for a finger and a toe…). Just as soon as I get my other projects done!
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