PexPro

It is almost impossible to flip through the financial pages of any magazine or newspaper without coming across an advertisement romising instant wealth. This publicity typically features a comuterized System or an Investment advisor hotline that Claims to ave achieved spectacular results over the past few months or ven years. Normally, such Services specialize in the futures or ptions markets because these highly leveraged areas are in a lore obvious position to offer instant financial gratification. The uge leverage available to traders in the futures markets signifiantly reduces the time horizons available to customers. Conseuently, the number of transactions, (i.e., revenue for the brokers) > that much greater.

As a rule of thumb, the more money the advertisement »romises, the more you should question its veracity. History teils is that it is not possible to accumulate a significant amount of noney in a brief time unless you are extremely lucky. Moreover, f you are fortunate enough to fall into a Situation where the mar;ets act in perfect harmony with the System or approach that you lave adopted, you are likely to attribute your success to hidden alents just discovered. Instead of walking away from the table, rou will continue to be lulled back into the market, not realizing he true reason for your good fortune. You will inevitably fritter iway your winnings trying to regain those lost profits.

Consider the advertisement’s promises from another angle, f the System is so profitable, why are its proponents going to the :rouble of taking you on äs a client and servicing your needs? jurely, it would be less bothersome to execute a few Orders each iay than to go to the trouble, expense, and risk of advertising :he service. The answer is either that the System doesn’t work or, Tiore likely, that it has been tested only for a specific period in the most recent past. You, äs a prospective user, should focus on the likelihood of the method’s operating profitably in the future and not on some hypothetical profits of recent history.

Taken From : Financial Accounting and Its Environment