I'd be very cautious. I dug up some reviews of companies such as 5 Percent Per Week and it seems some people lost everything.
5percentperweek is even more dangerous. Selling weekly condors 3-4 days
to expiration and getting 5-6% every week gives you false sense of
safety. When the market makes a move, you have no time to adjust and
70-90% loss is almost inevitable. Source: http://www.stockgumshoe.com/reviews/5-percent-per-week/
well i think it takes the fun out of investing - but i was curious if anyone does it and consistently makes good money...my first inclination is that it'd be easy to get screwed
To answer the first question about experience using a newsletter and autotrading: 5percentperweek and absolutely & unequivocally AWFUL!
I can say that when profits are good...they're good. But as ftpblast said, you get a false sense of safety. After last Friday, I decided I will NEVER autotrade with 5percentperweek again.
The portion of my portfolio dedicated to the autotrading took about a 94% loss, which could have been DRASTICALLY reduced had they closed the open positions in the morning for a loss of 7-10% or had they used stop-losses.
The trade manager(s) knew the positions needed to be exited and disclosed that the prior day (Thursday) to the newsletter subscribers and autotraders; they suggested to wait until the next day (Friday) to exit the positions and kept autotrade positions opened. It appears that the trade managers got an early start on the long 4th of July weekend and forgot about their clients and left the trades open: no exit positions were placed in the morning prior to the release of economic data, no exit positions were placed after the release of economic data (losses early on could have been mitigated to about 40-75%), and no updates or communications to clients throughout the day. I emailed them throughout the day for status updates and I received no response (in the past I received a response within minutes of contacting them).
For autotraders, inexperienced traders/investors, and traders/investors not near a computer to monitor the positions the result was PURE devastation to the portion of the account dedicated to autotrading or signal releases from the newsletter. It was pure negligence.
Come to find out after some frantic reviewing for their credentials online, they are not registered investment advisers. To my understanding, the SEC requires newsletters that offer autotrading to be registered investment advisers.
"Generally, the SEC considers firms that publish investment newsletters and that also engage in “auto-trading” to be investment advisers."
I'm sure some other autotrading newsletters manage positions with more care and caution, but I CANNOT recommend this newsletter for risk moderation and loss mitigation of open positions - an important component to options trading. If you decide to use them be sure to monitor your trades and use your own, educated discretion when to exit the positions - or, of course, contact your own registered investment adviser for any investment advice.
Remember, no one care more about your money than you...and maybe the IRS. Be careful, be cautious, and be sure to consult an investment professional if you have any questions about a security instrument, an opened position, etc.
Comments
Follow commentsLawrence-Lugar posted March 27, 2011 (03:55PM)
ftpblast posted March 27, 2011 (04:34PM)
godspeedj posted March 28, 2011 (01:21PM)
well i think it takes the fun out of investing - but i was curious if anyone does it and consistently makes good money...my first inclination is that it'd be easy to get screwed
cycle posted June 29, 2011 (03:35PM)
anyone out there using this service ? how do you like it ?
brownUpennTrader posted July 05, 2011 (06:23PM)
To answer the first question about experience using a newsletter and autotrading: 5percentperweek and absolutely & unequivocally AWFUL!
I can say that when profits are good...they're good. But as ftpblast said, you get a false sense of safety. After last Friday, I decided I will NEVER autotrade with 5percentperweek again.
The portion of my portfolio dedicated to the autotrading took about a 94% loss, which could have been DRASTICALLY reduced had they closed the open positions in the morning for a loss of 7-10% or had they used stop-losses.
The trade manager(s) knew the positions needed to be exited and disclosed that the prior day (Thursday) to the newsletter subscribers and autotraders; they suggested to wait until the next day (Friday) to exit the positions and kept autotrade positions opened. It appears that the trade managers got an early start on the long 4th of July weekend and forgot about their clients and left the trades open: no exit positions were placed in the morning prior to the release of economic data, no exit positions were placed after the release of economic data (losses early on could have been mitigated to about 40-75%), and no updates or communications to clients throughout the day. I emailed them throughout the day for status updates and I received no response (in the past I received a response within minutes of contacting them).
For autotraders, inexperienced traders/investors, and traders/investors not near a computer to monitor the positions the result was PURE devastation to the portion of the account dedicated to autotrading or signal releases from the newsletter. It was pure negligence.
Come to find out after some frantic reviewing for their credentials online, they are not registered investment advisers. To my understanding, the SEC requires newsletters that offer autotrading to be registered investment advisers.
http://www.sec.gov/investor/pubs/autotrading.htm
"Generally, the SEC considers firms that publish investment newsletters and that also engage in “auto-trading” to be investment advisers."
I'm sure some other autotrading newsletters manage positions with more care and caution, but I CANNOT recommend this newsletter for risk moderation and loss mitigation of open positions - an important component to options trading. If you decide to use them be sure to monitor your trades and use your own, educated discretion when to exit the positions - or, of course, contact your own registered investment adviser for any investment advice.
Remember, no one care more about your money than you...and maybe the IRS. Be careful, be cautious, and be sure to consult an investment professional if you have any questions about a security instrument, an opened position, etc.
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