This section of our site is intended to be an entertaining tutorial on how to detect the slick marketing of marginal trading strategies. You may even recognize one or more snake oil salesmen that we've modelled after.

We intend to add new segments whenever our lawyers permit us ... probably when Hell freezes over, I guess. Exposing tricks of the trade without obviously implicating specific individuals or firms is important in this age of excessive litigation. Thank you for your patience.

A thought provoking advertisement in a popular magazine for financial investors posed this question:

If you had a system that made a million dollars in 3 years, would you be passing it out for $300? No? How about $3,000? Still no? What would you sell for $3,000? Probably something "less" spectacular. Way less. So if your goal was to sell copies of a marginally performing system, how would you promote it?

Here is one chapter from an underground textbook:

How to Sell A Worthless Trading System

PART 1: Product Name

You could give your system a truly heartpounding name, like the "Holy Moses' Apocalyptic Market Masher". But that might appear a little over-the-top. You would also be limiting your audience to those who know what "apocalyptic" really means, as very few would be motivated to trade on judgement day.

Instead, create a more subtle, sophisticated name that conjures up some combination of the following notions:

• RARITY (use words like secret, just discovered, just revealed, confessions, ...)

• POWER (use words like market crusher, market masher, steam roller, ...)

• ACCURACY (use words like precision, pinpoint, exact, target, ...)

• PRODUCTIVITY (use phrases like money machine, profits factory, ...)

• INTELLIGENCE (refer to ancient civilization: King Solomon, Atlantis, Stonehenge, ...)

• SCIENCE (refer to high school math: Squares, Angles, Symmetry, Pythagorus, ...)

• UNIVERSALITY (combine astronomy and acoustics: planetary harmonics, cosmic vibration, ...)

• SUPERNATURAL (refer to mythical symbols: Holy Grail, Face of Buddha, Excalibur, UFOs, ...)

• ELITIST ( Cream of the Crop, Diamonds in the Rough, Crown Jewels, Family Jewels, ... )

So, what name would you give this marginal trading scheme? Click here for a suggestion.

PART 2: Promotion

The next step is to promote it in ads and juicy mailing pieces with a glowing chart sandwiched between pictures of (wealthy) W.D.Gann and (genius) Albert Einstein. After all, how could anything but quality appear between these two men?

After trading for only 6 months and flush with more money than you can possibly spend, its now time to share with everyone your amazing discovery ... for a fee, of course. And by the way, mention you are not in it for the money. You merely want to level the playing field so the common man can get his share of wealth. And to reinforce your claim, state in bold letters "NO PROFESSIONAL MONEY MANAGERS". (As if any of them would even consider!)

Also, nobody likes being left out of a winning pack. Suggest your system will place users right within the winners circle:

Profit with the big guns on Wall Street!

Include exciting (yet legally meaningless) charts, such as the one shown here. On the envelope print "My Miracle Trading System". In your letter, build a story stating any combination of the following . . .

• you were broke and had to sell your car and foreclose your home

• your spouse and kids left you

• penniless, you spent much of your life searching for the hidden secrets

• you kept spotting recurring patterns in the markets

• you eventually "cracked the code" and discovered the missing fifth (or sixth) dimension

(This riveting novel could become a best seller.)

Lastly, there is the small matter that you probably haven't spent any real money testing your system, you only ran it on historical data and optimized the crap out of it to get great results. So you will need to insert a disclosure on that fact, along with other warnings. The best place to print it is at the very end of a long promotional piece. By the time your victim ..um.. reader gets to it, he will be so hyped it won't matter. Also, use a tiny font size so he will have to strain reading it. Here is an example ...

PART 3: Phone Calls

Tell inquiring callers you already sold 50 copies of this system to intelligent investors with only 10 remaining, wait, ... sorry, make that 9 now remaining, and that you are too busy to chat because you are monitoring a roomful of eggheads coding up improvements and eight phones are ringing off the hook. With heart pounding, beg the caller to come to his senses and snatch one of the last few remaining copies for the modest price of only $3,000. Of course, all sales are final and your credit card number pleeeeeez . . . . .?

If they hang up, call 'em back ... again ... and again. Offer a demonstration disk for only $99. (You can make a lot of money selling just demos.) Offer snippets of trading periods where the system was near perfect. Persistence eventually wears down resistance. (Children learn that almost immediately.) And if they ask too many questions, respond by saying Mr. X is such a world reknown genius, it would be rude to ask him such simplistic questions. Once they feel guilty and/or ashamed, it's an easy sell.

Remember ...
any trading system will make you lots of money, ...
if you sell enough of them.

PART 4: Epilogue

With all satire aside, and to be fair, there are honest people selling decent trading systems that do work! But will it work for YOU? Can YOU handle the way it trades, or will your nerves and trading account be shattered finding out?

The market of financial trading systems is like any other: there is good stuff and then there is, well ... everything else. If you really want to BUY a trading strategy, here is one simple test you can do to defeat all high pressure, deceptive sales tactics ...

Will the seller provide a broker's statement
showing the most recent 200 consecutive trades
called by the strategy?
.

If the answer is anything but "Yes", walk away.

This title suggests rarity, power, intelligence, uniqueness, science and universality.

It also suggests what made their empire so strong: . . . these guys were cornering the maize market, trading futures contracts in that little room at the top.

The secret? Their calendar (shown below) reveals market cycles that took them centuries to isolate and analyze. And now, you too can benefit from this wisdom of the ages!

Archeological evidence suggests their trading prowess was second to none! However, it also suggests a reason for the collapse of their entire civilization: . . . no back office. Already, archeologists are requesting grant money to investigate this fascinating hypothesis.

OK, back to the main story.