CROOKS, CON MEN, AND CHARLATANS
Long, long ago I received a letter from a frustrated trader. The letter began by saying “ I’m a desperate trader, desperate to succeed. I left my job eight months ago and was pretty optimistic I could make money trading. I have tired to do everything right. I bought the best computer, the best software, the best data feed, had a mentor on day trading the S&P, and spent hundreds of hours studying charts. The letter went on to discuss how he worked two jobs for eight years in order to accumulate a trading stake of $100,000. His S&P daytrading mentor also sold him a trading course for $2500. Sadly, this fellow’s $100,000 went down to $3400.
Much of this trader’s demise can be traced to his S&P day trading mentor. A vendor/mentor who has never traded profitably in his entire life. Even worse, some 20 years later he is still out there reeling in the suckers. I can’t think of an industry that is so infested with crooks and con men as the trading vendoring business. It’s a lucrative business as suckers are always drawn to the promises of instant and easy wealth. The charlatans are most prominent in complex (and worthless) methodologies such Gann, Elliot Wave, cycles, the stars and the moon, pitchforks, and more. Complex apparently is a great marketing tool.
Back in the early 90s I ranted and raved against the pretenders in Vendorville in Bo Thunman’s Club 3000 newsletter. It was a losing battle on my part. My only request was to have the dream merchant provide at least three to four years of real money brokerage statements to validate themselves. But no, traders want to believe as true that wish they want to be true. That is, that some ultra priced trading system, newsletter, video course, telephone hotline, seminar, mentoring program, or chat room is going to make them wealthy.
The stories I could tell…... So I will just touch on just a few. How about the fellow and his three thousand dollar day trading course. He held himself to the public that he traded for a living and his day trading course would allow you to emulate him. However, when the CFTC went to investigate some of his trading claims, they uncovered that he had lost money six consecutive years. Sadly, he was just fined $10,000 and he is still out there preying on the gullible, albeit no longer claiming he trades for a living.
At one of the seminars where I was a speaker, I ran across a frustrated trader who told me how he had lost over $100,000 trading the stock index futures. A nice guy and a really sharp fellow. So sharp he realized the money in this business isn’t from trading but pandering to the naïve. A couple years later he became a full fledged member of Vendorville selling an expensive day trading system. In checking on him recently I learned he has taken his vendoring to an even higher level selling even more “must have” trading tools.
Then there is the story of the long time promoter who markets a $10,000 S&P day trading course. The thrust of his marketing spiel was how he had been a successful trader for decades - and never had a losing month. Bruce Babcock did an expose on this trading wunderkind and uncovered that he had fabricated his trading background in order to market his courses. I spoke with a well known trading guru who trained this marketeer extraordinaire. He told me that far from being a long time successful trader, this vendor was destitute when he trained him.
Speaking of exposes, Forbes magazine did the end all and be all of exposes totally shedding one of the longest tenured in Vendorville. I won’t even go into all the lurid details. But this fellow hasn’t missed a beat and has a website selling just about everything under the sun from scores of books to
Then there is the highly respected seminar speaker with his highly complex trading system. The nicest of guys and someone who has been around for eons. I just saw on the Internet the story about how some sap handed over his retirement money of $190,000 to this vendor.. A few months later the account was down to $83,000 and closed out.
Lastly, beware of the trading forum experts and the creation of trading personas. I have seen this time and again the past 20 years. You get someone who appears on the trading boards and goes on and on about how expert of a trader they are. They have mastered the art of articulation and their knowledge of the subject seems beyond reproach. The more complicated their approach the more likely it appears to the minions to be the real thing. After a time, these Pretenders suddenly announce they will be marketing their trading secrets, either visa a chat room or a hotline or some other endeavor. In the end, the only ones enriched are the scammers, never the scammees.
I could go on and on about the crooks and charlatans that infest Vendorland. If you want more details just check them out at the enforcement actions on the CFTC website.
