SteadyOptions is an options trading forum where you can find solutions from top options traders. TRY IT FREE!

We’ve all been there… researching options strategies and unable to find the answers we’re looking for. SteadyOptions has your solution.

Can You Really Turn $12,415 Into $4M?


I came into excellent article by Peter Brandt on Drawdowns and Scammers. Peter explains why most long-term profitable traders spend the vast majority of their trading careers either in a drawdown or recovering from a drawdown. Any slick promoter who tells you different is not dealing from a full deck.  

Trading Drawdowns
 

Peter Brandt explains:

 

"There is a statistical concept known as the “underwater curve.” The underwater curve plots the time periods when new all-time high NAV levels are being registered (represented by “0” on an underwater curve) and the time periods in which drawdowns are either underway or in recovery back toward new all-time NAV levels.

Most successful long-term traders are underwater the majority of time. Welcome to trading!"

 

You are in a drawdown state 80% of the time and of that, you are in a severe drawdown state (greater than -20%) 67% of the time

 

Did you know that Warren Buffett has had multiple 30-50% drawdowns in his career? Yet he is considered one of the greatest investors of all times.

 

False claims by wolves in sheep’s clothing

 

Peter continues:

 

"Successful market speculation is one of the most challenging endeavors one can pursue. Yet, promoters of get-rich- quick-and-easy schemes run rampant in the email and internet worlds. If they are not registered with the SEC, FINRA or the CFTC/NFA or are not personally managing assets of investors they are free to make exaggerated claims. Their advertising is extremely appealing and enticing. Many of these training and trade signaling services claim to have REAL trading track records. But, as far as I am able to determine, none are willing to provide an attestation or audit letter from a national or regional auditing firm that has reconciled their IRS tax payments for trading profits, brokerage statements and bank deposits with their public claims."

 

This is so true. Here are some of the claims I have seen from those promoters:

  • I turned $12,415 Into $4,155,000 trading penny stocks.
  • 2,062% Weekly Option Gain.
  • Turn $3,000 Into $100,000 in 4 months.
  • I made 29,233% in 12 months trading high flying Internet stocks.
  • We averaged 127.16% Per Month trading credit spreads.
  • We guarantee that our options trading strategies will make you profitable every month.
  • 99% of my recent 326 stock picks have been winners.
  • Trading $150,000 into $650,000 in 8 months.
  • How Jack turned $250 into $16,000 in Just One Month.
  • +9,651.04% day trading return since Jan. 4 2016.

 

Of course none of them has ever provided any proof of those returns. As Bloomberg article correctly concluded, their self-promotional strategies have made them richer than trading ever did

 

Some of those guys claim they live in mansions worth tens of millions, trade tens of millions in their personal account, but at the same time sell trading advisories for $50-100/month. Does it make sense to you? Many times they specifically mention (in fine print) that their performance based on "HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS". Does it mean anything when they don't actually trade?

 

Red flags to Watch in Alert Services

 

Moneyshow listed 10 Red Flags to Watch in an Options Alert Service. Here are some of them:

  • The service doesn’t have any losing trades.
  • The service won’t show you their closed trades.
  • The trades have huge risk.
  • The service inflates their ROI numbers.
  • No detailed track record is posted.
  • The performance is not based on real trades.

Here is another HUGE red flag:

If the promoter keeps bragging that he lives in a multi million mansion, drives a  Lamborghini and has a private jet, run away. Really successful traders are modest and humble. They don't need all this BS.

 

There are also a lot of ways to inflate your track record numbers, as I described in my article Performance Reporting: The Myths And The Reality. Some of them include:

  • Basing performance on "Maximum profit potential".
  • Calculating gains based on cash and not on margin
  • Presenting "Cumulative return".
  • Holding losing positions indefinitely.
  • Resetting past returns after a large drawdown.

And more.

 

Those who want to find out more details about some of those scammers, I highly recommend reading real and objective reviews by Emmett Moore from tradingschools.org. Emmett also describes how some of them game the system and make their profits look real. Fascinating read, highly recommended. 


SteadyOptions lists all its trades on our performance page, winners and losers. The details of all trades are available on the forum with screenshots of our fills and can be verified with historical prices.
 

Van Tharp says successful trading/investing is 60% psychology...only 60%? Humans desperately want to believe there is a way to make money with no or little risk. That’s why Bernie Madoff existed, and it will never change.

 

Best luck with your investments.

 

Related articles:
Can you double your account every six months?
How to Calculate ROI in Options Trading
Performance Reporting: The Myths and The Reality
Why Retail Investors Lose Money In The Stock Market
Are You Ready For The Learning Curve?
Are You EMOTIONALLY Ready To Lose?

Trading Drawdowns by Peter Brandt

Winning Trades and Losing Trades by Peter Brandt

 

Want to learn how to trade successfully while reducing the risk? 

 

Start Your Free Trial

 

 

What Is SteadyOptions?

Full Trading Plan

Complete Portfolio Approach

Diversified Options Strategies

Exclusive Community Forum

Steady And Consistent Gains

High Quality Education

Risk Management, Portfolio Size

Performance based on real fills

Try It Free

Non-directional Options Strategies

10-15 trade Ideas Per Month

Targets 5-7% Monthly Net Return

Visit our Education Center

Recent Articles

Articles

  • How To Start: Options Basics

    Today might just have the smallest gap between Wall Street and Main Street we’ve ever experience.  We’ve come a long way when it comes to common retail traders access, affordability of trade commissions, options trading education, research and analysis services, and, finally, some progress in accessibility of technology for options traders.

    By Drew Hilleshiem,

    • 0 comments
    • 100 views
  • Investors Are Not As Smart As The Media Thinks

    Over the last decade there has been a substantial rise in proclamations such as “investment advisors are useless,” “manage your own assets,” “don’t pay for financial advice,” and other similar sentiments. 

    By cwelsh,

    • 0 comments
    • 110 views
  • Should You Close Short Options On Expiration Friday?

    Options traders spend a lot of time trying to figure out the perfect moment to open a trade; but little attention is devoted to the other side of the transaction. When should you close? This applies equally to long and short positions. However, one aspect of short timing concerns expiration Friday.

    By Michael C. Thomsett,

    • 0 comments
    • 311 views
  • 8 Strategies For High Volatility Markets

    Trading in high-vol environments requires a different approach from low-vol markets. Here are 8 strategies to improve your trading and help you to survive in high volatility markets. They are very different from strategies in low volatility environment.

    By TFCAB,

    • 0 comments
    • 157 views
  • Selling Options Premium: Myths Vs. Reality

    Selling Options Premium refers to certain set of strategies that involve net selling of options, as opposed to buying premium where you are net buyer of options. There are a lot of myths and misconceptions about Selling Options Premium. This article will explain the basic concepts and debunk some of the myths.

    By Kim,

    • 0 comments
    • 651 views
  • Combining Momentum and Put Selling (Updated)

    In February of 2017, I wrote an article about combining together the concepts of momentum and put selling. You can find that article here as prerequisite reading. With this post, we'll look at how the strategy presented has done since then, along with some additional implementation ideas.

    By Jesse,

    • 2 comments
    • 482 views
  • Options and Invisible Risks

    Entry and exit timing is crucial to successful options trading, without doubt. However, one form of risk not often acknowledged is the risk of taking too many actions, too soon, and for the wrong reasons.

    By Michael C. Thomsett,

    • 0 comments
    • 500 views
  • The Volatility Option Trade In Alibaba

    This is why you have a Trade Machine membership. We can ride the evergreen patterns, and we have, for years. But when the market shifts, we need a minimum amount of data to adjust, and succeed -- now we will. This is our time.

    By Ophir Gottlieb,

    • 0 comments
    • 737 views
  • James Cordier: Another Options Selling Firm Goes Bust

    On November 1, 2018, a money manager named James Cordier from OptionSellers.com published an article on Seeking Alpha named Option Selling Opportunities So Good They're Scary. To me, this title alone would be enough to completely discredit the author and not trust him with my hard earned money.

    By Kim,

    • 10 comments
    • 4,959 views
  • Do You Have a Written Investment Plan?

    Meb Faber recently polled his twitter followers, and found that only about 25% have a written investment plan. Your investment plan should be based on your willingness (risk tolerance) and need (required rate of return to meet your long term goals) to take risk. 

    By Jesse,

    • 0 comments
    • 538 views

  Report Article

We want to hear from you!


There are no comments to display.



Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Add a comment...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

Options Trading Blogs