Trading Systems: Don't Get Duped - Part 2

Hi, Brian McAvoy with InsideOutTrading.com here and on YouTube I'm known as Trader Brian. Today I decided to post this video. I did get some feedback on the first one and if you haven't watched it, go ahead and check it out. Anyway, as far as the trading systems, as far as not getting duped, being able to filter through the bs, there is another part of the problem that I didn't cover in the first video and I do in this one. And here's the problem. I had another reader send me an email and here was his comment. Your video was very good. However, what you did not explain was how to get a system to test without paying the purchase price. Being able to test the system before purchasing would be the best way to ascertain whether the system is worth the money. Now it's true, but it just doesn't happen hardly at all on the Internet where you can get something to test it out for a while before buying it. Certain software applications you can, but with trading systems generally not. So with that in mind, what's the solution? Well, the solution is before you buy it, first thing you want to look for is do they have a guarantee? If they don't have a guarantee, really think twice about getting it. That makes sense. As far as a guarantee, you want to have at least a 30 day guarantee on it, preferably 60 days or more. Are they giving you good information or just a bunch of hype? They need to be giving you enough information that you can make a reasonably informed decision. And not just a bunch of hype. If they're just flashing a bunch of pictures up there, mansions and piles of cash and fancy cars and all that kind of stuff, if they're just pushing your emotional buttons, that's a huge red flag. Make sure they've got good information on the page. The next thing is, are they available for support? If there's no name on the page, big red flag. If it's only an email or a support desk, that's okay. Ideally they'll have a name, an address, a phone number or an email. But you want to have reasonable contact information so you know that you're dealing with a real person and a real business. And the contact information is a good sign right there. If it's not there, big red flag. I would probably not get it if there's no contact information, at least no name. Now your end of the deal is, is what you're looking at, is it aligned with what you've chosen for the direction that you want to Go anyway, if you're a futures trader and you've established yourself pretty well, or a stock trader and you've heard that there's a lot of money being made in Forex, really rethink your decision. That's where a lot of people run into trouble. I get calls on a regular basis and emails where that's what people have done and it's really messed them up. Forex has its allure, but if it's not broke, don't fix it. If what you got is working, don't go changing horses in the middle of the race and make sure that you really do. Like I said, what you're looking to do is really within reason and aligned with where you're going. Anyway, that's your end of the deal. Now what to do with it. Let's say everything that I just listed checks out. You decide to go ahead and get it. Once you have it in hand, you'll want to first immediately go ahead and test it, preferably do some back testing. Ideally, also go ahead and jump into your demo account. Don't trade it with live money yet, but jump into your demo account and test it out for a few weeks, see how well it does. Now, the main thing is you want to review the backtesting experience or your demo account trading. What you're looking for is, does the system test well? Can you trade it well and comfortably, or are you seeing. You've got a lot of questions. There are some gray areas, some things that aren't very clear. Maybe some stuff where the decision points are very subjective or they're just not covered. That's an issue. If it trades well and you're comfortable with it, you like it, then you want to evaluate the results. Are the results better than what you've benchmarked? What you currently have? Is it a step forward from where you are now? You're only going to find that by evaluating the results. And no, I don't mean the results didn't make money. It's three weeks, we're back testing. That's kind of iffy as far as if only you're looking at, or if you're only looking at making money, then that's kind of iffy. You want to look at the other metrics because you need to know how things line up. The metrics tell you what makes the bottom line. Then you have the question, do you keep it or not? Here's where. Again, it's your responsibility to do what's right. If they gave you decent information on the page, they've got support. They answered your questions and they really did deliver on what they promised you. Then don't ask for a refund, even if you choose not to use it, because that really wouldn't be right. They gave you good information, they didn't hide anything. You made a decision to get it. Fine. If they didn't deliver on the promise though, if it didn't, like I said, if what they promised you just wasn't fulfilled, then it's fair for you to ask for a refund because they didn't deliver on what they promised. The main thing is act with integrity and if you made a decision to go ahead and go with it, if, if you got value out of it, if they delivered on a promise, then fine, let it be. If not, get a refund, because that's fair. Now, quick review on what you want to look for. The metrics that are going to tell you if this system is worth pursuing or not. And moving forward with you want to look at the winning percentage coupled with the profit to loss ratio. Do not only look at the winning percentage. That is really irrelevant. 90% winners doesn't mean anything if 1 out of 10 losers wipes you out. The profit to loss ratio has to be there along with the winning percentage, your average return per trade so that you can look forward to things. The maximum drawdown. This one's really huge when you're doing the testing and you run the metrics. Because if the system is good and it makes money and all that kind of stuff, but it will experience drawdowns that you just really have a hard time stomaching and working through, then it probably isn't a system for you. If it's too far outside your comfort zones, it's going to mess you up. Now the real rewards, risk. This is another one. This is the gray area for a lot of people. How do I know what the real reward is on a given trade? By running the metrics, you can find out what the real reward to risk is on the winners, the losers, and overall very valuable information to know. And of course your return on information, return on investment and the other metrics. These are the things that you need to have in hand. Now you've heard the phrase, don't let friends drive drunk. Well, the reason that I'm making these videos and I've put together the resources I have is I'm looking out for you. Trading can be great or it can just really wreak havoc on your whole life. I feel that it's part of my duty in looking out for you as somebody that cares about you, to impress upon you, do these things when you're buying something and with your trading in general, these are the things that you need to do. Analyzing your trading system and getting the metrics is just so huge. I feel I'd be remiss if I didn't do my best to impress upon you the importance of doing it. Because it's not a game, it's your money. It's real money and there's a lot at stake. Go ahead and go to Insideouttrading.com TPA and get the trading performance analyzed or at least take a look at it and you'll see that, yes, this is the information that you really do need to make good, informed business decisions that will keep you moving forward and not backward. When you go to the page, you'll see, yes, I show you everything. Everything. How to use the sheets, what's involved, what you need to do, the information that you get out of it. Everything's there. Last thing is, do share this video with your friends. If you know of other people that are trading or thinking about getting into trading, this is really good, helpful information. Like I said, I'm just looking out for you. I want you to enjoy trading and get the most out of it. I want it to be a plus in your life. Do the same thing. Pay it forward with your friends. If you know that, like I said, you know of other people, share this video with them. Tell them to come check it out. It's worth a few minutes. So again, Brian McAvoy with InsideOutTrading.com on YouTube, I'm known as Trader Brian. Cheers, Sam.