Don’t Be A Sucker
6 Jokes, 6 Trading Systems That Suck
You know what, we all make mistakes and I am the first to admit it. Sometimes I take a trade and after closing it at a loss, I re-analyze the setup and slap myself over the face for entering the market in such a stupid way. But this is nothing compared with some of the traders out there. Believe me, the level of naivety out there is through the roof sometimes and that’s exactly what sharks take advantage of.
The scenario is this: a newbie comes into the market after he heard from a friend of a friend that another guy made thirty thousand bucks in just a week trading the financial markets. Now the newbie wants a piece of the pie and rushes to invest with a broker…but he has a problem: he has no clue of what to do and no system to trade. He then starts looking for the elusive “Holy Grail”.
Enter the Shark: a so-called “seasoned veteran”, “expert trader” and “market guru” that for some reason wants to share his system that made him millions of dollars…but he won’t share it with everyone, usually, there is a limited number of copies to be sold and he urges you to “Act now” and avoid missing out on the opportunity. Hahaa…I’ve seen sites that sell this kind of system with the announcement “Last 10 copies…Hurry!” and you know what, they still had 10 copies left 2 years later. The truth is that they will sell the system as long as there are buyers and don’t fool yourselves into believing that the system is actually developed by a real successful trader. No way! But our newbie, unfortunately, falls for the trap and buys the system only to find himself losing more money due to the crap signals given by the “system”. His search for the Grail starts all over again, but this time with renewed belief that he will find it. Now, our newbie is just that, a newbie and eventually he will stop searching for the Grail and start learning the basics of trading. He will evolve from a newbie to a trader…
… But there is another category: the newbie that evolves into an idiot, aka the newbiot. This guy will never stop the stupid things he is doing and will never have a strong foundation for his trading and will jump from system to system trying to get rich overnight. Next, we are going to focus on this kind of fool and some of the systems that they use in their futile attempt to rule the market. Some of the systems that I am going to bring to your attention are paid for, others are free, some of them even work to some extent, but they all have something in common: the fools that follow them.
“God must love stupid people; He made so many.” – 60 Second Profit System
To be honest, I was shocked to see that a lot of people actually use this strategy and I think the only explanation is in the title: God made a lot of stupid people. The 60 Seconds Profit system is actually a binary options adaptation for the well known Martingale System (Click here for the Full Martingale System Review). And yes, I know that binary options took a big blow and are not as popular anymore, but there are still plenty of brokers offering them and plenty of people still trading them.
This system could actually work, but only if you have unlimited resources… and if you have unlimited monetary resources, why are you even trying to get more? Too many people are being drawn to “Get rich systems” like a bee to honey. I know it might offend some people if I call them stupid, but I think it’s stupid to believe that this system will make you rich. I must tell you, I had a great time when I reviewed it and please read the full review because I know you too will have a good laugh. Here’s the link. The system requires me to place trades in the same direction over and over again, telling me that by the fourth trade I will have 100% chances of success. Excuse me for a moment while I wipe my tears because I’m laughing so hard…again. The creator/seller gives me absolutely no sound reason why the fourth trade will be a guaranteed winner and the worst part is that he tells me to gradually increase the amount at risk.
Thus, starting with a mere 5 dollar trade, by the fourth one (remember, the one I will definitely win according to him), I am trading 100 dollars. Well, that’s a really big risk compared to my first trade and please, guys, don’t fall for it. This strategy is definitely “NOT approved” and not recommended by me or by ThatSucks.com, in fact, I urge you to stay away from it and never believe any claims that this strategy works. If someone indeed had success with this strategy, it was because they were lucky. Pure luck, that’s all. Don’t be one of the many!
“For every idiot-proof system devised, a new, improved idiot will arise to overcome it.” – Pinocchio
The “Pinocchio” strategy, also known as Pin bar is one of the best ones around and it withstood the test of time. It’s being used in different forms since the early days of Forex and I actually backtested it for about 2 years, using the daily chart. The results were outstanding and the strategy is still a big part of my trading, with some modifications. The strategy is simple enough for a medium level trader to get it right and it doesn’t use any indicators. However, there are some guys that pretend they trade Pin bars and price action, but when I look at their charts, I realize their trading has nothing to do with the original Pinocchio strategy. I mean, a little modification is ok, but if you clutter the chart with 10 more indicators, you are not trading Pin bars. It usually all begins with an indicator and then the “improved idiot” starts to add indicators to filter out bad signals from the first one and soon the whole chart is full of lines and indicators and Pinocchio exits the building through the back door. The worst part is that when their accounts are busted, they blame the Pinocchio strategy and never realize how far from the original system they are. To read my article on the Pinocchio strategy, click here.
“The Genius Is Only Needed For The First Step” – The Lazy Day Trader
Yes, my friends, after the 60 seconds profit strategy, many more came. One of our “beloved” guru, expert, Shaolin monk of trading, the one and only Keith Jones, has decided to copy his system, and rename it… You see, the genius is only needed for the first step, now the fools continue, bringing us another ridiculous system. This one is even worse, because if I want to trade it I have to risk even more money, but it’s similar to the other one because it’s based on the same idiotic principle: by the fourth trade, you will have 100% chances of success…totally not true in my opinion.
Anyway, the thing I like the most about his strategy is when he explains that I need to place a certain amount of money on any given market and that “We call this a Trade”. What I get from this is that he assumes that all the people that will use his strategy have absolutely no idea about the financial markets and they are in need of an explanation of the word “trade”. Come to think of it, that is the profile of a guy that would use his strategy; only a naïve guy, with no market experience, would ever go close to a system like the Lazy Day Trader. Do I still need to say that the system sucks? …yes, I do: It utterly SUCKS – stay away! In fact, I’m not sure who the genius is and who is the stupid guy here: maybe Keith Jones is the genius and anyone using this strategy is the stupid one… Click here for the full Lazy Day Trader Strategy Review.
Part 2 – Evolution: Some Of Us Are Not Doing It Right
Remember, in the first part of this article, I talked to you about the evolution of a newbie. The fact is that nobody is born educated in the art of trading, but given enough work, I think anyone can become a trader in the real sense of the word. Well, you also need the right mindset and the reason why I am saying this is because there is a special breed of newbie that will eventually evolve into an idiot and once the years pass, he becomes more confident in his abilities, but in fact, he has learned nothing.
I’m calling this special character a “newbiot” because he remains a newbie, not knowing much about the mechanics of the market, with dreams of getting rich but he is also an idiot because he thinks that he is a seasoned trader just because some years passed since he started trading. The newbiot will always have an opinion about market direction or latest economic developments and of course, about every trading system, advising you on its performance or telling you what settings you should change to “fine-tune” it. The problem is that once you start asking questions like: “Have you traded it, or at least have you backtested it for a fair amount of time?”, the newbiot gives a stupid answer like “No…erm…but I know it works.” … How in the world could he know if it works or what parameters I should change if he didn’t even try it? Usually, this is my cue to start laughing…and walk away, remembering what a wise man once said:
“Never argue with a fool, people might not know the difference.” – Graphic Trend Analysis
Some time ago a guy recommended me a system called “Graphic Trend Analysis” which requires me to visually look for a trend, on the charts. I was thinking it sounds good; I like systems that go with the trend. Ok, what’s next? Well, that’s it: I Buy or I Sell according to the trend that I visually identified. Somebody really dared to call this a system or strategy and another newbiot recommended it to me…
Now, what was I to do? Start arguing with the newbiot…no way. He already had a high regard for himself and he considered himself a seasoned veteran of the trading business. He knew something about the increased probability of a trade to be successful if the trend is on your side, but he didn’t realize that the “strategy” he was recommending lacked the basic ingredients of a strategy. When exactly do I enter the trade? When do I exit it? How do I confirm that I am in a strong trend? All these questions had no answer, yet he wanted me to trade the… strategy.
“If idiots could fly, this world would be an airport.” – Momentum
Sometimes I really feel like I’m in an airport, surrounded by idiot traders. They are the ones that fly around from system to system, every time having a “Eureka!” moment, thinking they finally found the Holy Grail of trading before they even tested it. A good example is “The Momentum Strategy” that is based only on the Momentum indicator found on the Meta Trader 4 platform and some candle formations, but the exact candle formations are not described. I assume we must look for continuation formations since we are required to trade Bullish once the indicator goes past the 100 level and bearish once it goes below the 100 mark. Although not much more information is provided, you can find the strategy here. The picture they present show a nice winning trade, and a newbiot can easily mistake it for the Grail, but let me tell you, I have seen the Momentum indicator “hugging” the 100 level and coiling around it so many times that I can’t count…so they should land their planes and come down to Earth.
“If we learn by our mistakes, some of us are getting one great education!” – Duke of York
Yes…some of us are getting a great education by continuing to make mistakes such as using a strategy like “The Duke of York Strategy”; To be honest I find it mind-boggling to say the least. It’s much too complicated and you have to get the direction right twice; once when the price is going up and once when it comes down, deploying trades at four levels going up, one level at the top and four more levels when the price is coming down… I would never attempt that. It’s not because I don’t consider myself a pretty good trader, but why should I expose myself to a risk that is not necessary. On the other hand, a guy attending the courses of the “Newbiot Academy” would definitely go for it just to show off to his friends and brag about how he is using complicated and risky strategies because… he knows his stuff…
There are hundreds of good trading strategies out there. Moreover, there are thousands of indicators that can be combined to build your own system. There’s also something called a Demo account, which lets you practice and test your strategies. What all this means is that you don’t have to trust one trader or another when they say that a strategy is profitable. Try it, test it, see if it fits your trading style and never stop learning. But above all, fear the newbiot and stay away from him!