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Ladies and Gentlemen,
Recently I saw several posts regarding advisory services for oex trades.
When you try to find the past performances of these services, they look
good. Beware, statistics, as you know, are exploited to mislead you.
For example, some strategies involve scaling into weakness. When you do
that, a good trade that works for you immediately lets you win the
percentage the advisory service said they won on one unit. But when a
trade goes bad, maybe you would have scaled into multiple positions, for
several units. This is just one of the ways the past performances may
be skewed. If you don't scale into weakness, the good trades may still
be losers, because the percentage gains are based on your average entry
prices. If the trade doesn't go in your direction quickly, your option
erodes even if the index moves your way. Bottom line is you need to do
your own homework to make a few dollars. Last week I did my own
homework and I still lost money buying calls. There are no shortcuts.
Best wishes,
James
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