Re: BBC Money
agreed ....if we ignore any moral flaws in some (all?) of the schemes then those that get up and do will succeed more than those that just dream about it
The morality of these schemes is an interesting issue. If the scheme involves the sale of a product, then i would argue thats probably fair game. Its an undisputed fact that a small number of people have made significant sums from selling stuff !
A couple of buiness partners of mine have an aquaintance who made over 800 million dollars on a single deal back in the 80's and a great deal more money since. He charges 20K a pop for weekend seminars. His clients include CEO's of publically listed companies, and private entrapreneurs. Will the attendance at such an event guarentee business success ? what exactly is being sold here ? is that moral ? (his sales literature and marketing tactics for these seminars are no different from what you'll find at t2w most days of the week)
I have 2 aquaintances who both run property investment seminars. One has genuine experience, he originally built up a sizable portfolio of student properties, but as far as I am aware the more successful of the two has never owned a property in his life. The information sold via both companies is no doubt very similar, in one case its delivered by staff working for someone who achieved wealth via that route, and in the other, its delivered by staff working for someone who didnt. Is one seminar moral and the other imoral, they teach the same stuff and its an undisputed fact that some people made money from property ?
Its a real grey area.
I would however argue that the majority of trading seminars fall well within the boundaries of fraud. The overriding argument of course is that the key players in this industry have no track record in building wealth via this route. This morning, just for lulz, I looked at a bunch of random trades that I'd taken this year. I then asked the question, what would have happened if I had only taken the trades which met some particular criteria. Lets say for sake of argument I bought when stochastics where greater than some threshold value, or sold when stochastics where below some threshold value, or vice versa it doesnt really matter. The point is, within a few minutes of playing with some fairly common indicators I was able to generate a decent looking equity curve, that in reality is based on nothing other than curve fitting random chance. Will the same curve fitted system work next year... I doubt it, in fact I'd be more inclined to fade it
But lets say that I booked the Excel centre, filled it with 15,000 punters at £600 a pop, showed them the equity curve, and told them that I'd made 20 million trading that system. I think most would agree that thats clearly fraud , but promoting such an event, and making such unsubstantiated claims would be tolerated on most trading forums. Its no different to claiming I'd won the world trading competition. There's a whole industry based on selling backtested curve fitted systems, and in some case, they even go as far as modifying the sytem to screen out losing trades from the backtests !
However lets say that I'm a genuine trader, I read T2W for years, and I see Black Swan in CMC's latest promotional video, saying I should use MACD, RSI and Stochastics in a particular way. Lets presume that by using the indicators in the way he described I took pretty much the same trades as those from my curve fitted backtest, and by random chance, and only by random chance I increased my 25K account to 150K in a year. The point is, random systems do produce perfectly good equity curves from time to time. If I where to sell that information in the genuine belief that I have something of value, would that be morally acceptable. Is ignorance really a defense ?
Lets say I made 25 million in bonus's as a star trader working for Goldman Sachs, before retiring in my 20's. Is that down to random chance ?, is that because I was trading a trend following system at the time the markets where trending ?, if I'd started 5 years earlier or 5 years later would I have the same result ?. Is it moral to run seminars based on my publically audited track record ?
Lets take T2W as an example. They promote the illusion that the average mug punter can trade for profit. In doing so, they generate revenue from advertising, broker rebates IB fees etc. Is that moral ?
You could argue that their latest venture forex desk pretty much provides them with definitive proof that the majority of the membership are incapable of consistantly making a profit, and that the results from the competition are due to random chance. That argument is perhaps a bit unfair as most people who enter the competition do so to win, and you cant win by responsible trading, but if they where to ammend the rules, and transform the enterprise into a genuinely reponsible trading event, it would no doubt confirm that for the majority of participants, their returns are nothing other than luck. Even those trading with an edge are subject to the effects of radom chance.
Is that any more moral than some fradulant lifestyle coach promising to revolutionise your life by attending a £900 seminar
You might argue that reading T2W is free, but the consequences of taking advice offered here may cost a great deal more than £900 (in the most extreme of cases your wealth, your home, your wife and kids, and your life !) Its clearly not completely t2w's fault in such an event, but they are complicit.
I suppose the point is that everyones moral framework differs, and the providers of such seminars can usually provide selective cases to justify their actions. I suspect that even Mike Baghdaddy has a successful student somewhere
Talib Naseem has some very interesting perspectives on this sort of stuff.
