The Tiresome Forex Hype Fogies

Jul 12 2008

The problem in those looking to trade Forex is companies like the one I received an unsolicited email offer from on Thursday. The company is called City Pips.

By looking at its slapped together website it's actually run by SolomonFX - the company that I was skeptical about at the Los Angeles Traders Expo last month.

Solomon FX has been in business since January 2007 and at the Expo the presenters mentioned thy have taught a paltry 100 traders. Now, they're obviously looking for a new cash stream on the back of a signal system that has been "performing" for TWO months!!!

I think who do these guys think they are?!? Pretty audacious and arrogant.

It's demonstrated by some of their FAQ answers:

How Much Can I Make?
Trading is a risk, and as such there is never a guarantee of profit, but the signals that you will be sent have been known to produce up to 1000 pips per month.

Pardon me? "They have been known to produce up to 1000 pips per month" - that's 2 months!

What if I have never done currency trading before?
Our Quick Start videos will show you the basics of Forex, help you get a broker, show you how to navigate a trading platform, and show you how to place trades when you get a signal. The videos are taught in easy to understand language, and will lead you through step by step.

I've said this before and I'll say it again - trading is NOT for everyone. How does money management play into this? What about trading psychology when a trade is experiencing a major drawdown? And the what abouts can go on and on ...

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The problem that I have with this, is that industry wide we have a management of expectations problem. Now those who are new to trading or heaven forbid are induced because this opportunity sounds so good are going to expect over 1000 pips a month every month - and how long can that possibly last?

Quite honestly if I was going to go for anything like this, I'd much rather go for Kathy Lien and Boris Schlossberg's BKTraderfx service, which has gaining over 1400 pips SINCE JANUARY - which is still a very good and manageable return.

That's my weekend rant.

Tomorrow I'll share some of my thought on a live trading workshop that was held here in Vancouver by Pierre Charlebois yesterday.

Technorati Tags: solomonfx, city pips, bktraderfx, Kathy Lien, Boris Schlossberg

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07/13/2008 10:58AM

Yeah ive used BKTraderfx service and can recommend it too

http://www.coolpersonalchecks.com

darlene

07/13/2008 10:41PM

I've subscribed to countless "signal" systems and at the end of the day what matters is you. I've gone through my cycle of inflated expectations. Sure there's been some success with signals for me, but nothing that has really lasted - so far anyway - but I've really stopped actively "looking."

Joseph C.

07/13/2008 11:43PM

Looking at the Citypips website it looks as if they just kind of slapped it together. Hey everyones got to make a living and try to earn a buck right?

Samuel

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07/14/2008 04:24PM

I forgot to mention that Rob Booker also has a signal service too. Since October of last year he was grossed over 2400 pips ... again nice gains, but not outlandish like City Pips.

http://www.robbooker.com/signals/Rob_TradeAlerts1.htm

Harold

07/14/2008 10:02PM

A big Amen to this. I can respect Lien and Schlossberg- really smart people that know trading, including the psychology. The problem with any system tested over s short period is that if it seems to deliver a high performance the one thing I know for certain is that it is therefore suitable ONLY for the market as it was in those two months. And there are several different kinds of markets- which means that whenever the market shifts- say from a relatively smooth but ranging market to a highly volatile but trending one the first thing that will happen is that your once winning system will now eat you alive. I believe that every magic recipe system suffers from this defect. What wise traders-like Lien and Schlossberg- do is to operate with a system that takes market changes into account. But the trade off is always going to mean that your average net pips will decline in order to accomodate the needed risk management strategy.

Caroline anarch

07/29/2008 12:33AM

I have used a lot of signal services and the best one is also the most expensive one. i have been using " forex ring leader" i not sure what the web site link is so you will need to Google it. but the draw downs are normally less then 18 pips. and i do about 500 or better pips per month. and since i have been with them i have never had had a negative month. my cell phone rings i look at the alert details. i never second guess it pull the trigger. and repeat.

but this service is for money managers so if your just a part time trader and not serious about trading then stick with a cheaper $50 service. made for newbies.

Inma

08/17/2008 03:45PM

Hello Caroline!
I am interested in the signal services you are using.
Could you tell me a little more about it, please?
Could you give me any suggestions?
(excuse my not perfect english please).

Thank you very much
Inma

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