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The “Copy Trading” Fallacy

The “Copy Trading” Fallacy

“COPY TRADING”

Greetings dear traders!

One of the newest, and most dangerous, platforms (weapons) of financial suicide involve the use of what has become know as “copy trading.”  The actual results from copy trading are abysmal from an empirical standpoint.  Moreover, they dangerously place a trader, once again usually the unwary trader who is new to the markets, into false beliefs that are often the result of material omissions on the part of those that tout these platforms. 

For every trade in leveraged markets there is one winner and one loser.  When the costs of trading are taken into account, leveraged trading is actually a negative sum game.  By this I mean that for a particular price movement in a market the loser losses MORE than the winner gains.  This is due to the fact that all platforms have a financial incentive to entice trading itself and rarely reveal that 50% of the traders that use their platform will, in fact loss money ON EACH AND EVERY TRADE.  A topic that will be saved for another blog entails the indisputable fact that THE MORE YOU TRADE THE MORE YOU LOSE…PERIOD. 

The actual trading results of supposed “Copy Trading” platforms are also highly unreliable and very easy to manipulate.  In the forex market, as well as in crypto currencies, a trader can easily make one successful trade appear as if it is 10 or even 100 successful trades by merely changing the the purported leverage used or the size of the actual position taken.  This is not uncommon and many of these tactics have been exposed but rarely publicized.  THE END RESULT IS THAT THE PERFORMANCE IS NOT REAL. 

Moreover, the identity of the trader being copied is usually, and dubiously, hidden.  The upshot of this fact opens many perilous doors to the unsuspecting trader.  If you take notice, you will observe that most of these traders have very small purported account sizes and use odd user names much like that you would find on a gaming or seedy dating service.  THERE IS SIMPLY NO WAY TO KNOW IF THAT SAME USER HAS MULTIPLE USER NAMES AND ONLY TOUTS THE TRADES THAT WIN!  In this instance you are not only following an unscrupulous “trader” but one that is not a winner but in fact a  LOSER!

78% of all traders lose money.  “Copy trading” has done nothing to change those statistics and has if anything made those statistics even more gloomy. 

Remember that the platform that these products are available on usually involve dealers.  A dealer has an incentive to see you place trades.  Regardless of whether they win or lose they are compensated by the mere act of trading itself so the motivation to tout this type of product is also something to be very cautious of.  OF CRITICAL IMPORTANCE IS THAT ONCE YOU ARE ON AUTO PILOT THEY CONTROL HOW MUCH YOU TRADE AND HENCE HOW MUCH THEY MAKE! 

You may get a trader that makes a few good trades and when those results decline what happens is that investors who were duped into thinking that riches were on auto pilot begin following multiple traders with the hope of finding the allusive Lamp of Aladdin.  This auto pilot approach will lead the aircraft you are trading on into a tail spin that you cannot get out of and will lead to a lethal financial crash.   

Unless you follow The Wizard, particularly when it comes to leveraged investments, you will most likely fall into that unfortunate category.  As a member of a company I am so proud to be a part of I have witnessed a predictive ability that is simply unmatched.  The Futures Wizard will not be out predicted nor will the success of our publication be rivaled. 

No other service manifests their predictions before they occur in a manner that cannot be refuted.  The reason they don’t should be obvious. 

MOST IMPORTANTLY NONE OF THOSE SERVICES PROVIDE ANY TYPE OF GUARANTEE LET ALONE THE UNPARALLELED GUARANTEE OFFERED BY THE WIZARD.  

Joining platforms where the overall failure rate is 78% or greater is not trading  like a WIZARD!

After all I have seen I would be remiss if I did not conclude with a seemingly bold statement: 

FOLLOW OR FAIL   PERIOD…

 

Stay strong, live well, and have the wisdom to Trade like a Wizard!

Daniel J. Leboeuf- Senior Editor- “The Weekly Wizard”