So the blog is one day old and already we have had a few requests asking us what does a newsletter or service have to do in order to get a passing grade from us. We felt it was a good question so we figured we would get it out of the way right now.
The first thing that we require is that the returns are positive. We don't require home runs but we do want a positive return over a one year or longer period. Yes, we understand that everyone has a losing month now and then and occasionally even a losing quarter. As long as these losses are relatively small we are OK with it and in fact expect it. Any trader or service that claims to never lose is full of shit. We have been in this business for long enough to realize that losses happen, it's how traders deal with the losses that counts. This brings us to our next point.
A newsletter must have solid risk controls. If the people writing the newsletter do not practice risk management then they can not be expected to outperform. We can't stand writers who double down time after time because they are "right." The market is right not you. If you don't use portfolio level risk management, industry risk management, and individual position risk management you are a fool and should not be writing an advice letter to anyone. Position sizing, stops, and just general risk structuring are all very important concepts for any would be successful trader to understand. If the writer doesn't use it then we find it almost impossible to take them seriously and an even harder time following their trades.
Finally the letter or service must have a logical and consistent thought process. If they are changing their methodology every day, week, or month then we are left asking what on earth is their edge? We don't always agree with our approved list of services but we do like that they are consistent in their thinking and trading process.
If you have any questions please e-mail us at InvestmentNewsletterReviews@Gmail.com
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