When is a Forex Spam Site Not a Spam Site?

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If you follow me on Twitter, you may have seen a conversation that I had with another website owner. If you don’t follow me, I just wanted to go through it really quick because there is a good lesson at the end of it.

OK, let me take a step back and start with an important piece of information about myself and how it lead to to this conversation. I hate EAs. Actually, I hate black box EAs.

These are automated trading systems that are supposed to double your money in two weeks or some version of that bullshit.  The trouble is that they are “black boxes” or you don’t know how the system trades.  If you don’t know what a system is doing, how can you trust it?

Don’t get me wrong, I think it is completely possible to create an automated trading program that works.  Fund managers do it all the time and Trading Hero Ed Seykota was a pioneer.  However, you need to be able to understand why the system is making money.  There may be a fundamental shift in the marketplace that invalidates your advantage you and you need to be able to adjust accordingly.

So just to clarify, I have no problem with an EA…as long as they give you the exact system they are trading.  If it is just a black box EA, then I think it is completely worthless.  In addition, I think that they are detrimental to the credibility of the retail Forex market.

I wholeheartedly believe that Forex is the best market in the world for the at-home trader.  But these black box EAs turn many beginners off to a tremendous opportunity.  When they buy these EAs, they think they are “trading” when in reality, they are effectively taking stock tips from their hairdresser.

Then they lose all their money and say that Forex sucks.  No it doesn’t, it absolutely rocks!

The Conversation

That’s the background, so let’s get to the Twitter conversation.  I posted the results of my Wallaby EURUSD backtesting on Twitter and got the following response:

OK, that is just this person’s opinion.  It just depends on how much money you are trading.  I think I can make a living off 19% of $10,000,000.  Don’t you?  But if I was only trading $50,000, that’s a different story.

That sounds like they are trying to sell me something.  But whatever…let’s see who this person is before I comment.  So I checked the website listed in the Twitter profile. The first thing I do is check the About page.  Here is what it says:

So what do you notice right away?  No real name of the owner, no published trading results and a few typos (like the kind outsourced English-as-a-second-language workers make).  Other scam sites are also mentioned, which is generally a false validation of the site that it is written on.  To me, these are usually signs of a spam site.  But maybe not…

Then I looked at the articles.  At the top of the list are a few reviews of EAs.  On top of that, there is a “Trading Systems Reviews” page that looks like this:

Again, not that well formatted and the rating system looks arbitrary.  In the internet marketing world, creating a “review site” is a classic way to provide a comparison between different products.  The site gives the visitors so many choices that the visitor forgets that they don’t have to choose any of them.

This is fine if the ratings are based on the opinion of the author or ratings that they got from users.  However, many times, random ratings are applied just to sell products.  So at this point, I was starting to form an opinion about this person.

Then I finally read a few of the articles.  I actually skimmed them like I do with most things online.  From what I skimmed, I decided that the website is just trying to hock EAs.  There were only a couple of months of testing results…not much evidence on the reviews that I saw that would justify the rating.  That is when I got pissed.

I get this from time to time…spammers trying to tell me that my trading sucks when all they are doing is selling a crappy EA.  I am happy to talk trading with any trader and answer any question from a beginner, no matter now elementary or misguided (in my opinion).  But when spammers try to tell me that my trading sucks or they spout off some overused trading maxim like: “you should have stayed in the trade because the trend is your friend,” then I have a low tolerance for that crap.

So I wrote back:

Generally, that shuts most spammers up.  But this person kept coming.  My favorite was:

Then after a few back and forths, I realized that this person may be the real deal. Especially after this:

Whoops, now who’s the asshole? This person could just be saying that of course, but the fact that he/she took the time out to answer my questions leads me to believe that they are telling the truth.

A Closer Look

So I went back to see if I could have been wrong.  I read the reviews more closely and in each one, there was one line that said something like:

In this case, it says that the trading system is “well explained.”  Other Tweets went on to explain things like:

And

And finally

Fair enough.  I apologized for being harsh and I think we are cool now.

The Lesson

So what did I learn from this?  The next time I check out a site, I will investigate it further before making a final decision.  This is something that you should keep in mind too, especially when the site looks really good.  Take a few minutes to chat with the owner of the site via email, Twitter, phone or whatever contact means available.  Find out what they are really about.

The site I am talking about is called GreatTradingSystems.com.  After I got over this initial setback, it is actually a cool site.  One great feature is that is has an indicator repository.  There are tons of free indicators for MT4, MT5 and Ninja Trader.  I’m not promoting indicatoritis, but if you are looking for something in particular, this is a great place to start.

Anyway, that is when a spam site is NOT a spam site.  When it is misunderstood! Thanks for staying with me.

Suggestions For Improvement

To the owner of GreatTradingSystems.com…here are a few things that I would recommend to make your site easier to understand and give people a reason to follow.  I am interested in the development of automated trading systems based on my backtesting and if you are trading them for a living, your site could be a great resource.

Strictly constructive criticism, of course.  If was turned off, it’s a good chance that others are too!

• Write what you told me on Twitter on your homepage and about page.  The stuff about: you manually backtest and you don’t like black box EAs.
• In each review, explicitly say that you are only reviewing this EA because it gives out the strategy it is trading.
• Say that you trade for a living on your about page.
• Consider creating a pen name for yourself.  Even if you call yourself “Mr. X”, that is way more believable than what you have now.
• How about some Forex Tester indicators?
• Maybe give some resources on how we can create our own EA based on a system we already trade…programmers, steps, etc.

Small things, but I think it would make a huge difference.  Good Luck!

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