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Why vendors don't supply trading statements?


The first reason is they may not trade, but only teach.

The second reason is their performance (if they make any performance claim) may be poor and can't be backed up by statements.

The third reason is they don't have any legal obligation to do so (unlike mutual funds or regstered trading advisors).

The fourth reason is there is a greater risk of getting sued by unhappy clients who fail at trading using the methods they were taught.

The fifth reason is they don't have malpractice insurance (unlike doctors) to cover lawsuits.

The sixth, and indeed the most important reason, is the consumers in the market vendors serve don't demand them. If everyone refused to purchase the services unless they received statements, then vendors would comply or go out of business.

In other words, vendors are flourishing without having to supply statements. Consumers who vote with their wallets and not on straw poles are clearly saying the value statements provide is highly over-rated.

Good summary DayWalker - thanks.

Personally I don't agree with reason number 5 because fund managers also don't have malpractice insurance so I think that this point is irrelevant but some people may see a connection there.

This puts the ball in the consumer's court. If you buy into a trading service and don't ask for statements or don't get statements then you shouldn't expect the system to perform any better than the non-existent statements - i.e. not at all.

If you are looking at buying into a trading system then ask the vendor if you can see their statements. If they say no then ask "why don't you supply statements?" Then come back here and post the reply that you received from the vendor and the vendor's name. Perhaps we can create a list of reasons given by the vendors themselves for not providing statements.
quote:
Originally posted by day trading

Good summary DayWalker - thanks.

Personally I don't agree with reason number 5 because fund managers also don't have malpractice insurance so I think that this point is irrelevant but some people may see a connection there.

This puts the ball in the consumer's court. If you buy into a trading service and don't ask for statements or don't get statements then you shouldn't expect the system to perform any better than the non-existent statements - i.e. not at all.
If you are looking at buying into a trading system then ask the vendor if you can see their statements. If they say no then ask "why don't you supply statements?" Then come back here and post the reply that you received from the vendor and the vendor's name. Perhaps we can create a list of reasons given by the vendors themselves for not providing statements.


A word of caution: Getting statements with impressive results doesn't guarantee that you will replicate that peformance (unless the system is purely mechanical with an auto-trade feature), so don't get unhappy if your results differ and differ markedly. Also, statements don't reflect the the emotional element in trading and that, in the final analysis, is the toughest thing to conquer to achieve success.
This is true of any type of investment or trading. The usual "past results are no reflection of future results" provision applies.

However, if someone is claiming that they have been using a system profitably you need to verify that before you take the next step. i.e. get the statements before you sign up.

After that, if you are trading the same system as the trainer/vendor you should be able to match his/her gross results to the penny or else be able to easily explain why you didn't: Example: you were out to lunch and missed a trade.
On the other hand, if you don't get statements for any of the possible reasons in my first post and you decide to pay for the service, that doesn't automatically mean you won't be successful either.

As far as exactly duplicating results of the teacher, be aware that gross results can vary due to slippage and lack of fills. Electronic markets operate on a first in, first out basis. Remember you are competeting with all other market participants. That aside, your performance should be close to the teachers if ample time is given to put in your orders. Make sure to use a state-of-the-art platform such as Ninja, TraderX, or ICQ.

Whatever you decide to do, be diligent. Good luck!
You're right, it doesn't mean that you won't be successful however it will greatly reduce your odds of being successful. If you can't get statements from a vendor then the odds are stacked against you to a much greater degree than a vendor who provides statements.

Just remember that the odds of you succeeding are already not very good. You're making those odds way worse by selecting a vendor that doesn't provide statements.
quote:
Originally posted by day trading

You're right, it doesn't mean that you won't be successful however it will greatly reduce your odds of being successful. If you can't get statements from a vendor then the odds are stacked against you to a much greater degree than a vendor who provides statements.

Just remember that the odds of you succeeding are already not very good. You're making those odds way worse by selecting a vendor that doesn't provide statements.


You may very well be correct. Can you provide any articles or studies to support those comments that statements increase the odds of success? I love facts and they give credibilty.
You can extrapolate that from any criminal activity and related reports. The probability of fraud (and hence lack of success) rises when credible documentation is not provided.

Ergo: Lack of statements = higher probability of failure.
Not sure I agree with blanket statements without supporting documentation. Can you post a few links of criminal activity and related reports? That would be a value to anyone who considers joining a service.

I'll concede its less of stretch to believe that lack of statements might be a yellow light, but receipt of statements isn't hardly a green light.

Do you think references from existing students are important in an evaluation of this nature or should people rely on statements?

As I type this, I realize how academic this topic is in that so few provide statements. There is only one listed on this forum. It may all be moot.

I don't have time to look up references. This would be easy to do for anybody considering signing up for a service if they wished to check out my claim.

Have you ever signed up with a vendor?
Only free trials.

I've replied here: Linda Raschke