Overblown claims or what

I finally got around to running one of the trial services through it's paces with regard to their historical trades...these are not backtesting trades but the actual trade numbers from the website

I was amazed and astounded!

I did not go back to the beginning of the service but I used 2009 data to date. I ran the opening price and the closing price then created a column to be able to adjust the position sizing had a winning trade count column as well as one column for the account balance based on my loss allowance and another based on the service advisory to sell.

For the purposes of the test I made a few assumptions, which are not valid in real life but serve the purpose for the spreadsheet and save me a lot of data entry time. Chances are these fudge in favour of the service trades except #4.... actually, if I did not adjust for commissions then this would have given more winners but would not change the bottom line net profits...or losses as the case is likely to be.

1) The trades may not have occurred concurrently...my smaller account may not have been able to carry all of the trades that may have been running at the same time...then again it may have been able to. I just didn't check.

2) I did not stop the sheet when my account hit zero, I traded into the negative numbers.

3) All the trades were executed at the prices given.

4) I only counted a trade as a winner if the after commission profit was greater than zero.

Putting this altogether leaves me with a not so warm fuzzy feeling.

Total trades = 111, 56 winning trades, 12 greater than a 100% return.

$5000 account
MLA = $120 (not including commissions)
Position size = 1 contract
today's balance = $4,009
MLA = suggested exits
today's balance = account closed after 62 trades

$10,000 account
MLA = $120 (not including commissions)
Position size = 1 contract
today's balance = $9,009
MLA = suggested exits
today's balance = $3,521

$10,000 account
MLA = $120 (not including commissions)
Position size = 2 contract (the win rate goes up to 62 once two or more contracts are traded)
today's balance = $10,196
MLA = suggested exits
today's balance = account hits zero at trade 110

$20,000 account
MLA = $120 (not including commissions)
Position size = 4 contract
today's balance = $22,570
MLA = suggested exits
today's balance = $618

The claim to fame was, on average, 1 money doubling trade every 9 days. We should have seen 20 doubles not 12. That gets better. The number was changed recently to every 6 days which should produce 30 doublers.

????

If the win rate for 2009 was worse than 2008 then how could this average go up?

Sometimes I just have to shake my head.

The worst of it was there are two guarantees, one is for 90 days for a full refund if I paid the annual membership fee. The other was a pro-rated credit based on a quarterly subscription. I thought it was full money back or I would have anted up for the one year to secure a money back guarantee... at least they goofed and had to extend my membership so that now when I cancel I am dealing with 4 months, not three.

As far as the service is concerned, all of what is proposed is not much different than I was doing myself as it involves mostly technical analysis based on a certain group of pre-selected stocks. I was not paying attention to news but this one tends to do a bit of speculative guess work and news front running.

Jeff.