Myths

[jsoft]

Originally posted by autofx

Do the arithmetic on $100/month/subscriber times
1,000 subscribers. Or 2,000 and up, for that matter. It costs
virtually nothing to add new e-mail addresses to a
distribution list. So, you add more income for nothing spent
and with very little effort or hassle. I think most businessmen
would believe such a venture is very worthwhile.

First, let's start with the credentials. I've been trading for the living close to 7 years now. I used to have very successful software development company before. I've sold it. I've decided to change the carrier (which is start trading forex) and I obviously needed some capital to be able to live from it.

I used to have marketing department and obviously I have an idea what does it take to make 2000 sales, keep and support them on monthly basis.

You keep twisting my point. Selling signals makes perfect sense to signal providers and that's what they do for the living. Buying signals is the different story. Lack of qualification (discipline, trust in the system, etc.) by the subscribers makes it an easy bet against them making money over long run on average. System itself maybe good or bad (only time will tell), the point is most people looking for signals are not qualified to follow or judge it.

Very few fund managers offers signal services. This is what I've stated and it is true. Some do (mostly the big institutions with extensive staff). Also I've stated most signal providers are not making living out of trading (I didn't say it is good or bad) - true again.

If your trading is good, it is much easier to acquire 100K-5MM customers, which doesn't require any maintenance on top of what you do already also retention rate is extremely low.

Originally posted by autofx
And consider this: Jim Cramer, who has a net worth in the
nine figures, has his "Action Alerts" service, which is in the
category of service we are talking about.

Why do you think he does it?

I don't know the guy. Does he manage any fund? What part of his assets does he trust to his system?

Anyway, if the guy has acquired net in the nine figures, he has my respect.

Originally posted by autofx
Maybe you don't know what you're talking about.

Didn't anybody teach you the good manniers?

[autofx]

Abusive tone? I think you're far more sensitive than I.

Didn't anybody teach you the good manniers?

A couple of people have tried, but I'm stubborn.

You've been trading for a living for 7 years and have never
heard of Jim Cramer of Kudlow and Cramer, of TheStreet.com and
RealMoney.com, with the radio show, author of Confessions
of a Street Addict, formerly of the Cramer Berkowitz hedge
fund in New York where he made his fortune?

[autofx]

jsoft,

You're right, I have been less than polite.

You have your opinion, and you have every right to it.
If you were trying to persuade me away from mine, you
haven't succeeded.

[mishak]

Well, it is difficult to stay cool when one trades on his/her own money. So, some people choose the career of analyst, they are hired by financial institutions and/or have clients on subscribtion.
Therefore I would like to deal with analyst who does not trade himself and apply my judgement to his reports.

As for the greed, it prevents some people to stay cool.
So, as a rule of thumb, a trader-novice may write on a sticker
Greed is bad (for take profit), fear is bad (for stop loss).

Take care and ahve fun

[autofx]

mishak,

Well said.

[jsoft]

Originally posted by mishak
Well, it is difficult to stay cool when one trades on his/her own money. So, some people choose the career of analyst, they are hired by financial institutions and/or have clients on subscribtion.
Therefore I would like to deal with analyst who does not trade himself and apply my judgement to his reports.

Exactly right. There are analysts and there are traders.

Generally speaking, analysts have no bottom line - sometimes they are right and sometimes they are wrong - however it is not easy to quantify the sum. Their main value to the trader is reflecting the sentiment. Better they are at this, more they are paid by the banks.

Traders are ones making money (or loosing it). They have the clear bottom line. Opposite to the fixed salary paid by the banks to the analysts, traders are paid some performance based commissions (often on the top of the base salary). Successful trader is making at least 10-20 times of what good analyst is making at any bank.

Some people understand technical analysis and they make money of selling their reports. There is nothing wrong with it providing somebody finds it useful. They admit they don't manage funds and this is fine.

The signal providers we were talking about were claiming they manage funds and signals are their "an additional revenue stream".

Also they are not analysts - they don't provide any reports you could "apply your judgment to" - they represent the black box issuing signals which one suppose to follow blindly (I can't see how else could one use such services anyway).

[autofx]

Mine are not black box systems. A number of people
besides me have the source code to the main trading decision
engines, in fact.

I go out of my way to explain my systems, and let people
decide if they want to receive the signals or not...not to
follow blindly, but to use as a convenience.

I go so far as to try to scare away those who seem like they
would follow the signals without thinking for themselves.

If anyone IS paying for signals from systems they don't
understand, and then complain that the systems aren't
"making them money", shame on them.

[jsoft]

Originally posted by autofx
Mine are not black box systems. A number of people
besides me have the source code to the main trading decision
engines, in fact.

I go out of my way to explain my systems, and let people
decide if they want to receive the signals or not...not to
follow blindly, but to use as a convenience.

The fact remains that most signal providers sell black boxes, hope you agree? If you disclose the logic behind your system, the chances are people will rather calculate entries/exits themselves, without the need to pay you for it.

Anyway, services provided by analysts and by mechanical system signal providers are completely different type of services.

Originally posted by autofx
I go so far as to try to scare away those who seem like they
would follow the signals without thinking for themselves.

The trick is there is no place for thinking in mechanical systems: you ether follow it or not. That's why they are called mechanical, isn't it?

Originally posted by autofx
If anyone IS paying for signals from systems they don't
understand, and then complain that the systems aren't
"making them money", shame on them.

Well, it is the good point except the fact, that there is no way "to understand" most signal providers, because they sell black boxes... they show hypothetical results and expect you to "like it"... please tell me if I'm wrong?