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gordon@xxxxxxxxxx wrote:
>
>
> My brother in law is very interested in signing up for the program published
> by Ken Roberts. As my b-i-law lives in Canada and I live in Australia I am
> unable to see the material to make any meaningful comment. Has anyone used
> the material - results - observations - any comment would be appreciated.
> Thanks
> Gordon Pelletier
>
If your brother in law is at all knowledgable about commodities and
tech. analysis just tell him the basic KR course says trade rectangle
consolodations (narrow sideways channels) and 123 (failure swings) where
the #1 point is one year low. He is also a big fan of 50%
retracements. That really is the gist of the course. And, believe it
or not, not much more detail is provided than that.
If he is not that knowledgable send him to a book like Robert Rotella's
Elements of Successful Trading. AFter he has an intro to both futures
and risk control, then if he really wants a simple system (but lacking
in specifics) Ken Roberts course is not all that expensive as systems go
@ $200.
Following is a more extensive "review" that I sometimes post to
misc.invest.futures in response to questions there. Having done such a
bad job with a small account myself, I have strong views about vendors
such as Roberts sending people off with inadequate information.
***
In short, Ken Roberts basic course is short on substance (lots of hype
to encourage you to trade) and terribly short on information on risk
control. It is expensive for what you get. The hype you don't need.
In fact you need someone to tell you that this is a serious endeavor,
not to encourage you to trade without thinking. You can get most if not
all the introductory information free at:
gopher://gopher.gsa.gov/00/staff/pa/cic/money/futures.txt. That leaves
only the technical system, discussed below.
There are several introductory books which sell for about $30 which can
be obtained from Traders Press or other outlets.
I bought the course and a 1 year extension on the newsletter/hotline. I
did not contact the course counselors much or at all so I can't tell you
if their information addsmuch value or not. Even though the hotline had
occassional losses (as will any technique) there were no significant
losses shown in the newsletter in the 15 or so issues I received. This
was possible because the charts were always a couple weeks out of date,
so the winners could be cherry-picked. In my opinion, this did a great
disservice to the students. Beginners need to know there will be
losses, and how to manage them so that they do not wipe out the
account. Instead TWMPMM attempts to convince the newcomer that they are
being told some secret that will immediately catapult them to the
position of being able to compete with people who have done this for
years and participants with vast resources for research and information
and, probably more importantly, adequate capitalization. It is almost
universally accepted that it is very difficult to succeed with a small
account. There have been a couple surveys done that demonstrate that.
The techniques presented in TWMPMM-I are rather UNsuited for a small
account because they require a fairly high risk per trade using the
stop-losses suggested by the course.
So, the intro could be gotten elsewhere cheaper and better. The hype is
actually bad for you. What about the technical system. Well, it's not
actually a system. A system must include rules for entry and exit from
losing or winning positions. The entry system is simple - only 2
patterns used which can be an advantage or disadvantage (simplicity vs.
more limiting). However, these patterns are not tested historically and
in fact, are not specific enough for such testing. The 2 patterns are
public domain patterns, namely rectangles (which he calls narrow
sideways channels) and failure swings modified by a qualifier that the
low or high be at a one-year low or high. He calls the latter pattern a
123 pattern. A 123 pattern is a one year low, followed by a swing to a
higher pivot, followed by a decrease to a low that is no lower than the
first one. It looks like a W (or "double bottom") exept the second
bottom might be higher than the first. He then suggests buying when the
price breaks above the #2 point (the middle of the W), and putting the
initial stoploss below one of the bottoms. The rectangle is what is
sounds like: sideways movement with lows (and highs) of the swings
roughly equal. These 2 patterns are worth knowing about. But when the
time comes to apply it, he wimps out: he does not define what exactly a
123 is: how many days between points?? For a rect., how narrow? The
problem with this lack of specificity is twofold: the techniques really
can't be tested to see if they are profitable if they are not defined.
It leaves uncertainty in how to apply it.
Compared to other technical systems (usually computerized)
TWMPMM is
cheap. But it's neither complete, specific, or tested enough.
However, it may be worth $195 to get a simple system to start with. But
be prepared to supply lots of details and testing yourself.
To get additional information on options, entering with the
trend, etc.
you are asked to buy additional products at $95 - 195 each or to attend
a much more expensive seminar. This is in direct contradiction with his
original claims that everything you need is in the first course.
Mr. Roberts apparently steers course members to a brokerage
which he
owns. This brokerage charges very high rates. It is not at all clear
that a small account can survive at all, let alone if they are paying
$100 per roundturn when other full service brokerages charge $40-65 or
so.
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