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Some highly recommended books

  #414 (permalink)

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justrandom View Post

This Review on Amazon doesn't agree that this book is worth spending time and money on.
Here is the review:
1.0 out of 5 stars If 0 of 5 stars were an option..., August 4, 2012
By
KCtrader

This review is from: Option Trading in Your Spare Time: A Guide to Financial Independence for Women (Paperback)
Would you buy a cookbook from someone who claims to be a chef, who clearly understands the ingredients and components of a good meal, but just couldn't make a delicious dish?

Here's my story. It was late 2010. I had about $10k to invest, but always thought I could do it on my own, without the need for a financial advisor. After all, if they understood markets, shouldn't they all be rich? I read books, articles, anything I could find to learn about how the markets worked and different approaches to investing. I discovered there are many "markets," but an even greater number of alleged strategies to extract money from those markets. I needed to find a niche. I came across this book and decided that the leverage afforded by buying calls and puts would provide the % return I was looking for on my small account.

After reading this book, I then came across one of Wendy's websites, which had a spreadsheet-type of document alleging that Wendy made over $100,000 in 2010 trading options.

At the time, I didn't question those results. It seemed trustworthy because Wendy seemed trustworthy. I then noticed she was trying out a new service where she would "auto-trade" accounts for 12 months using her "P3 squeeze" pattern, for a fee of $5,000. She would decide which trades to make and those trades would be executed in my account via auto-trade. If she couldn't turn a profit after 12 months, I would receive my $5,000 back. However, if my account grew 100% over that time period (i.e., turning my $10,000 account into at least $20,000 by year's end), she would get to keep the fee. It seemed like a sound investment. After all, Wendy literally wrote a book on options trading. I believed at the time that she could make thousands of dollars per month trading options. As a naive investor/trader, I decided to give it a shot. But I didn't want to sit back as a passive observer during those 12 months either. I was planning on tracking her trades to try and learn the "how and why" behind her trading decisions. I thought that I too could learn to be a successful trader and take over my account after those 12 months.

Much to my dismay, I never learned how to trade profitably over those 12 months from Wendy, because she rarely had a profitable trade. By year's end, Wendy's trading decisions resulted in a loss of almost 50%, nearly $5,000 on a $10,000 account. Lesson learned. Don't trust a "trader" without a proven track record of profitability from actual real-time trading, not hypothetical trading. Ask for copies of their brokerage statements. Ask questions. And always read disclaimers. If it seems too good to be true, it probably is. Common sense advice, of course, but greed is a very funny thing. It has the ability to make the most irrational decisions seem rational.

Despite the loss, I consider it to be a blessing in disguise. I've become a self-taught trader over the past two years, and I have traded my own account ever since. In my opinion, this book is a waste of money. There are many others written by traders with proven track records of consistent profits through even turbulent markets.

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