Myths

[autofx]

Fallacy #1: "My advisor or alert provider made me lose money!"

Really? Did you perform due diligence before you selected this
advisor? Did it occur to you that your trades are your own
responsibility, and that blindly trusting an advisor's
recommendations was your choice?

Fallacy #2: "That advisor or alert provider must not be doing
very well with his trading; otherwise, why would he have to
charge for an alert service?"

Consider Microsoft. They have enough money to be their
own country just from sales of Windows 98/NT/2000/XP. Yet
they have many other streams of income from other products.

This is not to say that your average alert service provider is
as rich as Bill Gates. The point is that it makes good business
sense to open as many sources of revenue as you practically
can within your realm of expertise.

Fallacy #3: "Greed is bad!"

Which kind of greed? The kind where one wants to do well,
and has in mind sending kids to college and having plenty of
money for retirement so he won't be a burden on others?
Or the kind where one will exploit and harm others to get
what he wants? The latter is bad. The former is good.

Greed in trading is only bad when it is a cause of drawdown.
If a trader is very greedy but is able to temper it with self-control
and let his logic override his greed when it comes to executing
trading actions, the greed probably isn't hurting him.

[Croesus]

Originally posted by autofx
Fallacy #3: "Greed is bad!"

Which kind of greed?

Hi Bob!

I think that the real meaning of "greed" is the negative one.
Your first example is positive, so it can't be greed,

As you know greed in trading leads to take too much risk
with blinded eyes.



(Ehi Bob! I like better your old photo with the sax, simpatico! )

[MickMason]

Originally posted by Croesus


Ehi Bob! I like better your old photo with the sax, simpatico!

Ssshhhh, I'm keeping him talking while I finalise the $50mio reward.....it's Osama, right?

[autofx]

I guess most people do think of greed in the negative sense.

There is an Osama as Tim the Enchanter pic on the net
somewhere. I stumbled across it when I was looking for
John Cleese as Tim pics.

[autofx]

With all the talk of Holy Grails, it seemed like fun to dredge
up the definitive Holy Grail movie.

---

To the north there lies a cave-- the cave of Caerbannog--
wherein, carved in mystic runes upon the very living rock, the last
words of Olfin Bedwere of Rheged...

...make plain the last resting place of the most Holy Grail...

Follow. But! Follow only if ye be men of valour, for the entrance to
this cave is guarded by a creature so foul, so cruel that no man
yet has fought with it and lived! Bones of full fifty men lie strewn
about its lair. So, brave knights, if you do doubt your courage or
your strength, come no further, for death awaits you all with
nasty, big, pointy teeth.

[jsoft]

Originally posted by autofx
Fallacy #2: "That advisor or alert provider must not be doing
very well with his trading; otherwise, why would he have to
charge for an alert service?"

Consider Microsoft. They have enough money to be their
own country just from sales of Windows 98/NT/2000/XP. Yet
they have many other streams of income from other products.

This is not to say that your average alert service provider is
as rich as Bill Gates. The point is that it makes good business
sense to open as many sources of revenue as you practically
can within your realm of expertise.

With all due respect:

1) Microsoft example is a way irrelevant;

2) the truth is that the main stream of revenue for the most "signal providers" out there is indeed the fees charged for the signal services; they seldom manage real funds (successfully);

3) very few successful money managers are offering signal services; it makes very little business sense adding "additional stream of revenue" (from signal services) to the successful managed fund business, if one considers the headache of dealing with several hundred newbies also limited income potential; the possible exception would include institutions with the extensive personnel and big institutional clientele base (not the case with the two men operation selling their signals to the newbies).

The simple math tells the story:

a) signal services: assuming $100/month fee with 100 active subscribers we're looking at 10k/month revenue;

b) small 10 MM managed fund: about 17k/month from 2% annual management fee alone + another 50k/month for 20% incentive fee (assuming the conservative 30% annual returns) - totals to almost 70k/month

[James]

Originally posted by jsoft


2) the truth is that the main stream of revenue for the most "signal providers" out there is indeed the fees charged for the signal services; they seldom manage real funds (successfully);

3) very few successful money managers are offering signal services; it makes very little business sense adding "additional stream of revenue" (from signal services) to the successful managed fund business, if one considers the headache of dealing with several hundred newbies also limited income potential; the possible exception would include institutions with the extensive personnel and big institutional clientele base (not the case with the two men operation selling their signals to the newbies).

You are no doubt correct on your observations about most signals companies. However, there are exceptions. I do both fund management and signals. However, as the fund has grown, I have devoted far less energy to the signals. It is now a stripped down version, and I offer nothing but the "bare bones" alerts of the trades I am taking. No frills, no bells and whistles, no fancy gimmicks, no correspondence with clients, no chat room, no website log in and no marketing hype either. Most of the administration of the signals service is automated, so it takes very little of my time. All I do is to send the trades out to traders as I take them myself. It is obviously geared to serious traders and not the newbies who get caught in the glare of the fancy signals companies headlights. I now have 420 clients amazingly, and that number grows by about 15 per day. I shall continue to provide this service as it satisfies several virtuous (and also not-so-virtuous) needs in my personality, and does provide a safe and reliable second income stream. I am also hopeful that my service meets the needs of traders who are tired of the scammers and are looking for something genuine.

[jsoft]

James,

I certainly recognize Teamforex as the genuine provider and the rare exception of the general rule.

Also I believe your own example has confirmed my point not only regarding unlimited headaches associated with the signal services, but also about very limited income potential, if all efforts are considered (I understand you never saw it as the main revenue source).

Almost any "signal provider" claims they offer managed accounts, while in fact either they manage very limited funds or they do not at all. In some cases it would even be to their disadvantage to manage any funds.

I could go on and perhaps get more specific, however I believe I made my point. Hope you agree.