The 90 Percent Club If you've been around investment circles long enough, you have undoubtedly seen ads for stock, futures, forex or commodity systems, services or newsletters claiming a 90% or greater winning trade rate. This, of course, makes the approach very enticing. I mean, seriously, how could you lose money if you win 90% of the time? In other articles, I've provided the math behind how to really evaluate a system, which includes winning percentage, average win and average loss, so I won't repeat it here. Instead, I'll focus in on the 7 ways someone can claim a 90% winning rate, and what you should watch out for: 1. Mr. Hindsight This person can point to any chart, and identify his buy and sell points with absolute precision. Usually recognized as an expert in his field of analysis, he can create stunning buy and sell signals for past data. Problem is, he usually can't do it going forward. ADVICE: Ignore past "predictions," and only follow Mr. Hindsight in real time. You'll soon see his true ability. 2. Ms. Vague Her market predictions are akin to reading the works of Nostradamus. She'll say "the market will be up today, unless GDP figures are disappointing." After the numbers come out, the prediction can be made to fit the outcome - "well, the numbers were only somewhat disappointing" or "other forces overpowered the market, so even though I was right, the market fell." ADVICE: Turn off financial TV shows, since this is where Ms. Vague and here cohorts lurk. 3. Mr. Sneaky This guy will have an ad that states "95% winning closed trades." Sounds great, BUT it usually means that 5% of his trades are currently open losers, usually big losers, that he has held onto for a long time. ADVICE: Make sure all open trades are disclosed, too. Treat open and closed trades as the same. Don't fall for the "this losing trade can always come back and be profitable" ploy. 4. Ms. Quick Exiter In and out like a flash on winning trades, Ms. Quick Exiter will typically have losses 5-10 times her winners. But, she gets a lot of winners, and she wants to dazzle you with winning percentage. ADVICE: Look at total net profit. You probably will see a losing strategy, even with a 90%+ winning percentage. 5. Mr. Liar If Mr. Liar can do anything to cheat, he will. In the past, he has stuck all his losing trades in one account, put all his winners in another account, and of course, only shows you the winning account. But, he has many other tricks up his sleeve, certainly more than I can name here. ADVICE: Track his trades in real time. Make sure they are specific and detailed enough so they cannot be misinterpreted. 6. Mr. Long Term "The stock market will rise," says Mr. Long Term. He is absolutely right, if you don't pin him down on time. It may take 100 years, but stocks will eventually rise. But, the first 99 might wipe you out. Long term forecasters hope you'll forget their predictions if they are incorrect. ADVICE: Treat any prediction, especially long term ones, with extreme suspicion. The fact is most experts are just guessing. 7. Ms. Really Can Do It A rare and exceptional talent, this person is the real deal. No gimmicks, no tricks - just super high winning percentage and super high profits. ADVICE: Ask yourself "why would this person sell me their amazing secrets for $79, when if she is so good, she can trade and make unlimited amounts of money?" Answer: No one will ever sell you the ultimate key to trading success, and if they did, it would cost a lot more than you could afford. So, now you know the seven members of the 90% winning trade club. Avoid these folks, and you'll almost certainly become a better trader. About Author:  Kevin Davey is an award winning private futures, forex and commodities trader. He has been trading for over 19 years. In each of the years 2005-2007, Kevin achieved over 100% annual returns in a real time, real money, year long trading contest, finishing in first or second place each of those years. Kevin maintains a website, http://www.kjtradingsystems.com, where you can find useful free information on trading. Also, visit his site and learn how you can follow Kevin's trades as they happen. Copyright, Kevin Davey and http://www.kjtradingsystems.com. All Rights Reserved. ________________________________________________________________________ Reprint Rights: You can freely reprint this article in its entirety, provided that it is reprinted without modification, and that the "About Author" information is also included. Return to Article Page

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