watch out for this stock market scam! // options scams forex scams binary options scams investing welcome to looking at the markets withdavid moadel and today we're going to talk about something that well i'm notnecessarily going to call it a scam because that's a really strong word butit's something to really look out for whether you're trading stocks optionsfor x commodities binary options whatever it is you'll see advertisementson the internet all the time and if you
stock quote apple computer, do a go google search you'll certainlysee these its automated trading programs or auto traders sometimes they're calledrobot traders auto traders algo traders automated trading systems whatever theywant to call it they have many names for it and basically the idea is that youjust sit back and let the robot or
program do the trading for you you don'teven have to do it and i've seen claims of huge massive profits if you pay for aif you pay for a in auto trading service or program and you have to wonder isthis too good to be true well let's explore it a little bit andi'm going to use some information i found from a few websites that i foundand if you want to visit these websites the web address is right here on theaddress bar and this is of as of tuesday august $year 16 2016 this is from thefinancial review website and i think it's a good introduction i'm just goingto read a little bit of it and i wanted to give him credit so it's fromfinancial review online and it says get
up turn on the robot go to work comehome turn off the robots collect the moneyit's a traders dream unfortunately the hard reality of thearms race in algorithmic trading means this scenario is slipping further awayfrom the individual traders realm ok and that's a quote and you know whatwhat they're trying to say here is that you know maybe robotic or algorithmictrading might work for hedge funds and large institutional traders but that'svery different from what they're going to try to sell you the the individualinvestor or retail investor what you're going to get is some program that if itgoes you know if the price of a stock or
binary option or our commodity or foryou know currency if it goes above a certainprice it's going to automatically by and if it goes below a certain price it'sautomatically going to sell or whatever and it's yet the promises that it takesthe emotions out of trading and you know it it is something that's automated soyou don't have to watch it all the time it just does it for you but is it reallyfor retail investors well according to this article fullyautomated trading is the province of the well resourced and fully dedicatedtrader this generally limits to the field of hedge funds and investmentbanks alright the general principle that
drives much automated trading isrepeatable behaviors that deliver profits more often than not the problemis that successful strategies are repeated and copied until the prophetprofile flattens 20 meaning you won't make any money anymore or a negativeexpect expectancy which is a nice way of saying saying that you're going to startto lose money after a while alright so you don't count on thisworking for you for any length of time and please whatever you do if you feellike you must invest in auto trading software which i do not personallyrecommend but if you feel like you must don't just walk away from it and let itdo its thing and not watch it okay
because the last thing you need is forthat your profit profile to flatten to zero or negative or a negativeexpectancy which is a nice way of saying that you're going to start losing moneypretty soon if you don't watch it and and then if you have to watch it all thetime then is it really automated i mean maybe it is but the whole allure of theautomated trading programs is that you don't have to watch them so if you haveto watch them all the time then what's the point here's from the wall street journalhere's the website web address if you want to go there
and an article here explicitly statedexplicitly states beware of training programs most smallinvestors also should avoid automated trading programs that promise hugereturns in a short time . short time . these programs also known as expertadvisors or ea's so be aware of that phrase you know you might want to runthe other way if you hear that phrase they execute trades in milliseconds andmay raise even greater risks for unsophisticated investors alright then they they mention a fewparticular ones and they mention how its yet theseretail programs try to be similar to the
ones used by hedge funds they they canautomatically execute trades when specific parameters such as price levelsor hit all right that that's all it does isunemotional and when it reaches a certain price it's probably going to buyyourself okay yeah and it mentions the hidden dangersas market dynamics change or news alters trends these programs often collapse atsome point the programs that advertise huge returnsand short periods are likely to crash and burn the fastest computer programcomputer programs that shows smaller but steady or gains over long periods arethe best bets all right but even that i
personally don't recommend them ifyou're looking for small but steady gains there are much better ways to doit and in my opinion then just just leaving it to a computer program thatsomebody's selling to you all right and here's an example from the binaryoptions black list and there's the web address for that and they mention aparticular particular program auto trading program and yeah i'm not goingto mention the name of the program necessarily but because you know i idon't know if it's a good program or not i cannot speak to that but here'ssomebody just an example who started with some money
a hundred seventy six dollars you maynot sound like a lot of money but maybe to this to this person it is a lot ofmoney and then 29 short trades later just loss after loss after loss andturned it into twenty-five cents at twenty-five centsbusto okay all that money got pretty quicklyso you don't want that to be you and it was not difficult to find horror storiesabout these auto trading systems i just wanted to give you an example andinterestingly enough sometimes these can look very benign they can look harmless here's trade kings website which is abroker and i don't have a particular
problem with tradeking as a broker i i ilike their low commission structure and and low fee structure you know thatthat's all fine and good but i was very surprised to see them you know recommending an auto tradeservice here it says trade kings auto trade service enables you to activateautomated are automatic trading in your account based on the recommendations ofinvestment newsletters was pretty surprised to see that i i would neverbase my trading there are automated based on what investment newsletters sayyeah i mean come on you have to do your own due diligence you have to payattention to the markets yourself don't
just leave it to people who writenewsletters i mean i don't know we accept tradinginstructions directly from the newsletters you specify then the autothe orders are automatically executed according two parameters that you preseton your account when you activate your auto our auto trade program willautomate will automatically execute order orders sorry based on your newslettersrecommendations you don't have to watch the market allday if you don't want just leave it to the experts
i don't know i'm not gonna lie i havenot tried this service so i'm not going to recommend or not recommended butpersonally i it's not something that i have subscribed to you know i-i-i don't automate my trades based on what somenews letter writers recommend so yeah that that's just my opinion on it alright so yeah again i'm not sayingthat these are scams are not scams i'm not going to recommend or not recommendany particular program but personally i can tell you what i do and do not do andi do not use any automated trading programs if i'm going to put my moneyreal money into a trade or an investment
i'm going to research it i want to knowabout the company i want to know what's going on in the news overall i want to look at the priceaction i want to see the chart just to get an idea of what you know what thetrend is where it's going it does it generally go up does it generally godown over time is it you know what's what's the price rangeis it expensive right now is a cheap right now relative to the general pricerange that it goes in these are questions i want answers to before iinvest in anything in the stock market or options market oranywhere else
alright so if you'd like more help withthis or if you just want to put a trading plan together because that'ssuper-important feel free to contact me anytime my name is david modell moa dl and youcan contact me by email at david modell @ gmail.com and if i could prevent evenone person from making a huge financial mistake in losing their money blowing uptheir account as they say based on you know some poor decision that they madeor just handing over their decisions to somebody else who might lose money ontheir behalf if i could prevent somebody from doing that then you know i'vereally achieved what i wanted to with
this and if you like this video pleasegive it a thumbs up on youtube leave a comment subscribe to my channel andyou'll be able to get access to the educational information that i put outthere so thank you so much for watching this i really appreciate it and i hopeto hear from you soon
