Debunking Returns....

Debunking Returns....

521%, 691% and 1295% monthly profits that's what people have

made already trading this brand new forex system.

It's a unique & never before seen system to beat the market with

NO experience or NO skill required.

Ok this is one of these emails that I am sure that most of you just chuckle when you see it. Normally this email wouldn't even remotely get my attention but I gather that they still market this stuff because some poor sap or gambling addict (and there are a lot of them) believes that somehow you can reel off these sorts of returns month after month. 

Kind of like the options areas or binary field. Huge returns are easy as pie. 

Let's put things in perspective. Warren Buffet had returned about 19% per annum over the course of the decades that he has been an investor to his fellow investors. Comparitivly speaking and by industry standards a stellar number over time. 

Some remarkable hedge fund managers over time have done 20-40% per annum. Once again a remarkable achievement by industry standards.

I set a lofty goal for myself of doing around 36-50% per annum for myself and for those that follow me. For those unfamiliar with these numbers that is about 2-5% per month. Once again pretty good over time. 

Time is the key measurement that you need to look at. 

I am not insinuating that these returns did not occur but think about it for a minute. Could you do this month after month compounding your money this way? 

Do we know the risk involved to get returns like these? 

If you don't know how risk works the higher the return of investment the greater the risk that was taken to obtain it. That is how the hedge fund formula works.

So what it tells you is that extremely high leverage was likely employed. 

What do we know about high leverage. IT DOES NOT WORK. 

One study after another has been done to determine the effectiveness of use of leverage to add profits to performance and every one of the studies found that over the mid to long term leverage does NOT add to profits. All that happens is the swings between gains and losses increase and you likely end up with the same or less than you would have done had you employed conservative leverage. (read that last paragraph over and over until it sinks in). 

What about the binary option arena (which I might add I do not trade)?

There is NO binary options exchange which means that you are trading directly against you broker. What is the odds that you are going to be successful at their expense over the long haul? 

The simple answer is "you won't".

What about skill and knowledge? 

Do you think that they are important in managing your own money or others money? 

It is almost a ridiculously foolish question isn't it?