Some Sobering Stats

[Predictor 11]

I thought I'd share this.. some sobering stats on success in the futures industry.

 

http://www.cftc.gov/ucm/groups/public/@lrenforcementactions/documents/legalpleading/enfprotradingcomplaint120711.pdf

 

My approximate summary -- read the report for particulars.

 

Pro Trading/Regan brought in nearly a million dollars

 

Regan traded on a simulator -- never placing real traders.

 

None of his nearly 130 traders advanced above level 1

 

None of PTC's commodity traders a net profit of at least 2k (required to advance to level 2)

 

Between 2009 and 2010 the 36 commodity futures sub accounts traded lost 78,557 and no sub account earned a net profit

 

Cumulative net profits of the best traders were only between $13 and $200

Edited July 15, 2012 by Predictor

[onesmith 10]

RR incorporated as Pro Trading Course LLC.

so why is RR personally named as a defendant?

 

Can the facts supercede and nullify liability limits? Are the disclaimers worthless?

[MightyMouse 12]

The stats do not tell us anything that was not known before. A trader will lose money from time to time to time. Someone who is not a trader will lose money most of the time or all of the time.

 

Regan was the vendor supreme. He took down almost $1 million in just over a year and never traded a dime. Gotta love it!

[Predictor 11]

Did you read the report? 130 some traders tried to make money in the futures and forex, and not a single one made money. I think that is important.

 

I don't see why you would call these students, dedicated enough to pay for training, and highly motivated to achieve payouts as not being traders. They obviously weren't successful traders but they had a huge motivation to succeed. Doesn't anyone find it odd that not one, even by chance, made any money?

 

I bet if we were allowed to open up 130 random futures accounts at a retail brokerage firm that we'd see a similar story.

 

I'd like to see what the rules they had to follow were. If anyone knows the payout charts or the rules then I'd like to see that.

 

Full Disclaimer: I'm a trader and trading education vendor.

 

The stats do not tell us anything that was not known before. A trader will lose money from time to time to time. Someone who is not a trader will lose money most of the time or all of the time. ...

[DbPhoenix 42]

They obviously weren't successful traders but they had a huge motivation to succeed. Doesn't anyone find it odd that not one, even by chance, made any money?

 

One, I don't find it odd that no one made any money, particularly if they were doing no more than they were told (see below).

 

Two, I question their alleged "huge motivation to succeed". If anything, they appear to have had a huge motivation to pay somebody to tell them what to do which, it is assumed (on their part), would then in turn result in success. But this is no different from the thousands (millions?) of others who link up with others in some way or other to learn to trade like somebody else using somebody else's method or system or whatever rather than work to understand the basics of just what it is they claim to want to be able to do.

 

The gullible are always looking for the easy way, the shortcut, and there's no shortage of those who are more than happy to sell it to them.

 

Db

[MightyMouse 12]

Did you read the report? 130 some traders tried to make money in the futures and forex, and not a single one made money. I think that is important.

 

I don't see why you would call these students, dedicated enough to pay for training, and highly motivated to achieve payouts as not being traders. They obviously weren't successful traders but they had a huge motivation to succeed. Doesn't anyone find it odd that not one, even by chance, made any money?

 

I bet if we were allowed to open up 130 random futures accounts at a retail brokerage firm that we'd see a similar story.

 

I'd like to see what the rules they had to follow were. If anyone knows the payout charts or the rules then I'd like to see that.

 

Full Disclaimer: I'm a trader and trading education vendor.

 

What was the huge motivation to succeed?

 

They were looking for jobs and got scammed into the fantasy of easy money/security/independence/etc. They were there a year. They had unrealistic expectations and quit.

 

About 1 or 2 made money. that is pretty consistent with the expectation that almost everyone loses.

[Predictor 11]

There were 2 reasons they had a high motivation for success. First, they did pay for training. Regardless of the quality of training received, they made an investment of both time and money which shows a relatively high level of motivation.

 

Second, they were guaranteed to get a payout if they were profitable and they had charts (and belief) that showed how much they could make. Obviously, many probably just copied the leader but I'm pretty darn sure that at least some of them tried to make their own thing work. Not a single one succeeded.

 

I disagree that any of these traders were profitable. I don't call $200 profitable. I call that break even. I'm not surprised at the % of the traders who lost.. just that not a single one made any money.

 

I'd like to see what rules they were trading under (and avoid them). I.e their risk limit per day.. did they have to use ultra tight stops.. that sort of thing would be very interesting to see.

[MightyMouse 12]

There were 2 reasons they had a high motivation for success. First, they did pay for training. Regardless of the quality of training received, they made an investment of both time and money which shows a relatively high level of motivation.

 

Second, they were guaranteed to get a payout if they were profitable and they had charts (and belief) that showed how much they could make. Obviously, many probably just copied the leader but I'm pretty darn sure that at least some of them tried to make their own thing work. Not a single one succeeded.

 

I disagree that any of these traders were profitable. I don't call $200 profitable. I call that break even. I'm not surprised at the % of the traders who lost.. just that not a single one made any money.

 

I'd like to see what rules they were trading under (and avoid them). I.e their risk limit per day.. did they have to use ultra tight stops.. that sort of thing would be very interesting to see.

 

You could say that losing 200 is breaking even too, but it gets counted into the losing accounts as a losing account.

 

Maybe all of them tried their own thing and that is why none of them made money. Perhaps the system really does work.

[SIUYA 11]

There were 2 reasons they had a high motivation for success. First, they did pay for training. Regardless of the quality of training received, they made an investment of both time and money which shows a relatively high level of motivation.

 

Second, they were guaranteed to get a payout if they were profitable and they had charts (and belief) that showed how much they could make.

 

based on this, all those who invest in Nigerian scams have a high motivation for success.:helloooo:

 

The end result is that they were conned, and I think its a a long bow to assume they were highly motivated.

They may also may just have been, desperate, or gulible or rich and bored, lazy and looking for a quick turn key solution, or plain stupid........

 

It is always an interesting read and as in everything you only need a few people to make the con work. As for the numbers of losers....well IMHO, it probably says more about those people who believe that the power of positive thinking alone will get them success

[johnw 10]

I find there are no conclusions to be drawn from the OP that connect 'The Art of Trading' and the success of Traders to Regan.

 

It is just another sad story of a Conman and his stupid Followers ... please note I did not use the word 'victims' because being a victim of your own stupidity is not a crime... well not as yet, but with the continuing erosion of self reliance and self responsibility I would not be at all surprised to wake up one morning and read that the Law now permits a person to sue themself.

 

The very occasional person who wants to become a Trader and has the emotional capacity to do so successfully, begins his/her journey from a point of self assessment.

Nowhere does self assessment even remotely include any acts of stupidity.

[karoshiman 10]

Haven't read the document, just the statements here.

 

Don't think you can gather their motivational level from their payment only. Sure, there was some basic motivation to succeed, hence, the payment. But was that motivation enough to do more than the educator told them to do? I guess not...

 

Anyway, I have to admit that I am surprise as well that none of them was able to make a $ 2k profit in a year...

[SIUYA 11]

.... I would not be at all surprised to wake up one morning and read that the Law now permits a person to sue themself.

.......

 

I tried to get my accountant to allow me to retrench myself. At the time there were certain taxation advantages to their final payouts when someone was made redundant.....alas he did not allow me to do it.

[johnw 10]

I tried to get my accountant to allow me to retrench myself. At the time there were certain taxation advantages to their final payouts when someone was made redundant.....alas he did not allow me to do it.

 

I quite understand .. it is a bugger really... particularly if you win in court and then refuse to pay, all the while providing your own legal team on both sides.

 

But don't lose heart SIUYA, I have every confidence (or lack of) that things will change soon.

 

When we pause to consider for a moment that Greece Ireland, Portugal Spain and Italy are guaranteeing almost 40% of the EU loans in one form or another, to themselves as they bravely try to borrow their way out of debt, then it becomes obvious that the Politicians are capable of anything, providing that it meets the stupidity criteria.

[Obsidian 10]

....

None of his nearly 130 traders advanced above level 1

 

None of PTC's commodity traders a net profit of at least 2k (required to advance to level 2)....

 

this sounds impossible, unbelievable :rofl:

[SIUYA 11]

this sounds impossible, unbelievable :rofl:

 

I was thinking about this myself, you would imagine at least one trader might have got lucky.........

if you think of the scenarios.....

 

if you had some early losses early on then it could be difficult to recover or even if you got to being a break even trader you still would not recover. Good luck would be unlikely to help dig you out of the hole.

If you were lucky and had some early gains (but not to the $2000 level) but the system was either rubbish or you really had no idea of trading then its likely you would have then proceeded to loose with subsequent trades.

Its a bit like a casino - as its often reported - if you dont have a system with an edge then the more you trade the more likely you are to loose, and not learn....as you loose more its harder to learn and recover.....its not until its all thrown out and you do the learning before committing money then you might have a chance.

Think about how many market wizards report that they made money early on and then blew up, until the worked out how to put things in their favour.....ie; luck eventually turns from good to bad, and hence the natural progression for traders is to loose.

[BlueHorseshoe 10]

Doesn't anyone find it odd that not one, even by chance, made any money?

 

Not necessarily . . .

 

If they were all following an identical rule-set in the same market, then whether there were 1 or 10,000 traders and accounts becomes irrelevant; they'd all be doing exactly the same thing. If the trade decisions were poor then the result would simply equate to a series of larger positions.

 

Assuming that this wasn't the case, then there is the possibility that some were notionally profitable and there was a theoretical edge to the way they were trading, but that in practice this edge was not large enough to overcome costs. The fact that they appear to have been daytrading makes this more likely.

 

One thing that I find interesting in the report is the repeated reference to adverts on CraigsList. Clearly this company's marketing was targeted more at non-traders seeking some sort of employment, as opposed to struggling/failing traders.

 

Another thing I find interesting is the difference between people's naivety and willingness to believe something, and their willingness to part with significant sums of money based on this belief. When I was completely new to trading I was certainly naive enough to believe that there was great value in the teachings of certain vendors, and yet I was never naive enough to part with thousands of dollars for tuition of any kind.

 

BlueHorseshoe

[MightyMouse 12]

I was thinking about this myself, you would imagine at least one trader might have got lucky.........

if you think of the scenarios.....

 

if you had some early losses early on then it could be difficult to recover or even if you got to being a break even trader you still would not recover. Good luck would be unlikely to help dig you out of the hole.

If you were lucky and had some early gains (but not to the $2000 level) but the system was either rubbish or you really had no idea of trading then its likely you would have then proceeded to loose with subsequent trades.

Its a bit like a casino - as its often reported - if you dont have a system with an edge then the more you trade the more likely you are to loose, and not learn....as you loose more its harder to learn and recover.....its not until its all thrown out and you do the learning before committing money then you might have a chance.

Think about how many market wizards report that they made money early on and then blew up, until the worked out how to put things in their favour.....ie; luck eventually turns from good to bad, and hence the natural progression for traders is to loose.

 

I would be curious to know what the transaction costs of the traders were. I suspect that there was a considerable amount of over trading occurring for the group which leads to high costs and, therefore, makes the group more likely to have losses. Over trading means you are taking losses and having small gains. Nothing wrong with the losses, but there is something wrong with the small gains. Small gains are what kill a trader, not lots of losses.

 

If you add back in the costs, if the group were experiencing something close to a random distribution of wins and losses the wins and losses would have been about the same.

[MightyMouse 12]

Not necessarily . . .

 

If they were all following an identical rule-set in the same market, then whether there were 1 or 10,000 traders and accounts becomes irrelevant; they'd all be doing exactly the same thing. If the trade decisions were poor then the result would simply equate to a series of larger positions.

 

Assuming that this wasn't the case, then there is the possibility that some were notionally profitable and there was a theoretical edge to the way they were trading, but that in practice this edge was not large enough to overcome costs. The fact that they appear to have been daytrading makes this more likely.

 

One thing that I find interesting in the report is the repeated reference to adverts on CraigsList. Clearly this company's marketing was targeted more at non-traders seeking some sort of employment, as opposed to struggling/failing traders.

 

Another thing I find interesting is the difference between people's naivety and willingness to believe something, and their willingness to part with significant sums of money based on this belief. When I was completely new to trading I was certainly naive enough to believe that there was great value in the teachings of certain vendors, and yet I was never naive enough to part with thousands of dollars for tuition of any kind.

 

BlueHorseshoe

 

Your posts were much better before you were stripped of your awards.

[steve46 12]

I don't know if any of you have heard of Regan....he is a young guy who used to be on several webcasts daily from the CME floor. His commentary was for lack of a better word, simplistic, and many of his appearances were to promote his system (which I thought was similar to Larry Levins)...except for the pyramid scheme part....lol

 

Maybe its just me, but how could a person of presumably average intelligence think this up and not understand that at some point in the future it was going to blow up in his face?

 

Of course I think the same must be true of Madoff, Stanford, and any number of others in the past, all the way back to the original...a guy named Charles Ponzi

 

Charles Ponzi - Wikipedia, the free encyclopedia

[BlueHorseshoe 10]

Your posts were much better before you were stripped of your awards.

 

MMS reported me and the CFTC stripped me of the awards . . . Easy come, easy go . . .

[MightyMouse 12]

MMS reported me and the CFTC stripped me of the awards . . . Easy come, easy go . . .

 

It's good that the CFTC is watching someone.

[SIUYA 11]

I don't know if any of you have heard of Regan....he is a young guy who used to be on several webcasts daily from the CME floor. His commentary was for lack of a better word, simplistic, and many of his appearances were to promote his system (which I thought was similar to Larry Levins)...except for the pyramid scheme part....lol

 

Maybe its just me, but how could a person of presumably average intelligence think this up and not understand that at some point in the future it was going to blow up in his face?

 

Of course I think the same must be true of Madoff, Stanford, and any number of others in the past, all the way back to the original...a guy named Charles Ponzi

 

Charles Ponzi - Wikipedia, the free encyclopedia

 

Never underestimate the human mind and how it can justify anything to itself. ....how they are smarter, how they think they are doing nothing wrong, how its other peoples faults.

 

There are so many of these people prosecuted all the time, and its not just in finance. Think about the current libor and money laundering schemes the majors are caught in....is it that much different? Why is it that the wagons get circled around some people and not others - -- all too often even society justifies some of these things as normal. (if i recall correctly when the MF Global 'theft' took place people tried to defend what happened.)

 

I dont think he was done for anything like a ponzi shceme -more misprepresentations, miss selling and fraudulent solicitation. At least in a ponzi shceme you have a chance of getting something back.

 

Stick 1000 people in a room, some of them will look to bend/break the rules.......

change the rules, the same people will probably do the same thing......ie; its not the rules that need changing.

[timratliff 10]

No doubt, trading is incredibly difficult but some of us do make significant profits week in and week out. It took me 7 yrs of trading the e-minis to finally become consistently profitable but I am there now. I could write a book on the jouney. I've seen statistics that less than 5% make consistent profits day trading, but take heart, it can be done.

[bakrob99 11]

... I'd like to see what the rules they had to follow were. If anyone knows the payout charts or the rules then I'd like to see that....

 

I remember when Regan was touting his stuff. And I sat in on a few webinars. HIs rules were VERY loose. He used to look for "co-orelations" in the indices as I recall, and used a ridiculously quick (15 second( chart for trade "entries" Give me a break .

 

I took one look and said that there was no way I could trade like that with any chance or hope of success.

 

Apparently a few others agree.

[windsurfer 10]

The order, entered on May 29, 2012, requires the defendants jointly and severally to pay a $461,100 civil monetary penalty and restitution of $232,200. The order also imposes permanent trading and registration bans against the defendants and prohibits them from violating the Commodity Exchange Act and CFTC regulations, as charged.

 

Federal Court in Illinois Orders Defendants Richard C. Regan and Pro Trading Course, LLC to Pay More than $600,000 in Restitution and Civil Monetary Penalties to Settle CFTC Anti-Fraud Action