We are all bombarded by countless mass mailing vendors who tout miraculous trading systems that will make us rich beyond our wildest dreams. Even on internet we get our share of hype from scrupulous vendors preying on innocent victims.
Many readers fall prey to this hype and give up some of their hard-earned money for worthless information. The more experienced traders know that touted systems rarely produce the promised results and simply ignore them. I have witnessed many hot arguments over such offers, and the typical response have been *if your system is so great, show me statements of your own account*. The *show me your statement* response is often used when it comes to challenging a system vendor, an account manager (CTA), or anybody that seems to claim any kind of success in this industry.
But is this really a valid line of questioning?
Here are a few thoughts about the *show me your account* issue:
A) Even if the vendor provided us with his personal account statements, and those statements did indeed prove that the vendor is actually making money with his system, odds are extremely low that the buyer will be able to use the product successfully. A cynical person once said *give the average trader tomorrows newspaper, and he will still lose*.
B) If the vendor admitted he is NOT trading his own system, does that mean the system is worthless? Not neccessarily! A buddy of mine once learned a trading system from a mentor. This technique made him unbelievable money through the years. Later on, he found out that his mentor was unable to trade successfully himself. He couldnt handle the emotional aspects of trading. But his method was, and as far as I know, still is valuable.
C) Should an account-managing CTA trade his own account? If you had $200 million of other peoples money under management, and you receive a fee of 25% of your clients profits, would you trade a few contracts for your own little account? I doubt very much that the likes of Paul T.Jones, John Henry or Richard Dennis trade their own accounts.
D) Will a trader who trades well for himself, trade successfully for others, and vice versa? Not neccessarily. I know traders who do well with other peoples money, but get too jittery when their own money is on the line. On the other hand, there are traders who do well for themselves, but when it comes to taking responsibility for other peoples money, they freeze.
E) Would you make your account statement public? Would you make your account statement public if you had done poorly? Most likely not. Would you make your account statement public if you had made millions? I know I wouldnt.
Someone once used the following analogy to my comments above: There are violinists who are masters of their art, and there are violin teachers who taught these violinists how to play, and there are composers who write the music for these violinists. Each one of them is good at what he does, but dont expect them to do the others tasks equally well.
We have a similar situation in trading; we have those who trade for themselves, we have those who trade for others, we have those who design trading systems, we have those who fill our orders, those who write books, those who teach.
Each of these tasks requires different skills and aptitudes. Some individuals excel in more than one of these areas, but we cannot expect them to excel in all areas.
I am not trying to defend any system vendor here with these comments, nor my own course methods and/or emails. I am merely trying to make you think.
Good trades to all.