I hope you’re well and are managing to survive the office party season. I’m gearing up for the big one… the Market Maven office party is going to be huge. Confirmed attendees are myself, Mrs Market Maven and my trading partner (the cat). I’ll let you know of any salacious gossip.

Lots to talk about today, so lets start with something topical…

Last week I wrote about avoiding illegal collective investments schemes and by coincidence Bernard Madoff’s illegal ponzi scheme has hit the headlines over the last few days.

Madoff’s ponzi scheme

A ponzi scheme is a scam whereby investors send over money on the promise of great returns. The money isn’t actually invested, but squirreled away or stolen. To survive, the scheme needs a constant flow of new investors to repay the original investors. Amazingly Madoff’s scam lasted 20 years and was only found out because investors wanted to pull out too much money too quickly.

A good friend at the FSA spends his life fighting such illegal schemes, many of which seem reputable on the surface to many people. Remember, if someone offers to manage your money and they are not FSA authorised to do so, have nothing to do with it. With unauthorised investment schemes you run a very high risk that the ‘forex fund’ you are investing in is actually little more than a ponzi.

Another red light is the results being claimed. Madoff never claimed massive profits, but monthly returns were remarkably stable, too stable in fact. Losses are a natural consequence of trading, they are like a business expense, you can’t operate without them. So when evaluating a trading system be very wary if results that are too consistent (As with FAP turbo)

I hope in another quarter of a century we do not forget the lessons that should be learned from the current debacle. Judging by the current state of affairs, I’m not entirely confident that we will. The biggest ever ponzi scheme was presided over by Jon law, the Scottish economist who sparked the Mississippi bubble in 18th Century France. Neil Fergusson covers this and more in his great book The Ascent of Money. Nearly 300 years later another ponzi scheme hits people who didn’t ask difficult questions because of the returns supposedly being made.

For me it underlines the importance of taking control of your finances. Whether this means actively short term trading or choosing your own low cost index trackers over expensive managed funds, there has never been a better time to increase your financial intelligence.

20 places left for Roxy’s next seminar

Since July Roxanne Cross has been taking a small group of traders through her methods every 6 weeks. I went along to the first seminar and was impressed with Roxy’s energy and enthusiasm. But the seminar is just the start of the learning process.

Trading is an activity, so there’s no use learning something in theory and not putting into practice. What really sets Roxy’s training apart is the ‘doing’ part. The training really starts after the seminar and this is where Roxy seems to come into her own. I’ve seen some fantastic feedback from some of the people who went on the first course around 4 months ago.

Each training cohort is made up of just 25 people and the session on January the 25th session has 20 spaces left.

Roxy’s training program gets the thumbs up from me. Here’s a testimonial from one of the July group:

“I attended Roxanne’s introduction seminar on 25th July, how time flies! I have spent a small fortune over the last five years on various schemes, hoping make a living income with the intention of ‘giving up the day job’ – all money down the drain. So, when you advised me about the ROXY Trading course, it took me a while to think it over, but eventually went for it because of your recommendation and guarantee. I am now pleased to report that after two and a half months, Roxanne’s course and intensive follow-on training has proved to be literally the best thing since sliced bread. Roxanne’s strategy for trading on a spread betting platform actually works and how. In return for exceptionally good experienced based advice, Roxanne expects the student to follow instructions to the letter and if followed, results do happen. What is required from the student is a willingness to learn, patience, and complete concentration while trading. Roxanne is absolutely dedicated to helping people improve their lot and she has rightly earned the respect of the whole class who attended the training seminar. I would whole heartedly recommend the ROXY Trading course.”

PH. Guildford

System round up

Lots of systems being tested and examined at the moment. Here’s a quick summary of what’s going on. I don’t have time to go through all the systems I’ve my eye on, so I may have missed some that might interest you. If you want me to take a look at a system or have any feedback, do get in touch.

FAP Turbo It’s early days with my testing, but it has so far been positive. A number of you are also testing it, so please also keep me up to speed with your progress.

I’m willing to give this a fair trial, but my expectations are very low given the previous disappointments released by Markus Leary. I strongly advise anyone testing to not move beyond a demo account until you have a good couple of months under your belt.

Short term results may seem good, but consider this….

Their historical profit graphs are remarkably consistent, perhaps too consistent. This is not a ponzi scheme, but anything that has such a smooth diagonal profit curve is danger of being too good to be true in my eyes.

Some of the system’s parameters use a huge stop and small profit target. This means that in the short term you will make some consistent profits, but it takes just one or two big losers to ruin things. Call me cynical but you have to wonder why so many of these Expert Advisors released through click bank use such a strategy. Is it because such a strategy might lead to good results in the short term, which will take you past the money back guarantee period before things go wrong? Just a thought.

So far it seems the scalping strategy appears to be the better of the two. I’ve reports of big losses using the ‘long term’ strategy, though this varies from person to person. One guy has apparently lost 1300 pips so far!

I’ll keep you updated with my progress and the feedback of others. Maybe the cynical old bugger will be proven wrong. Maybe not.

FXProTrade http://www.fxprotrade.com is currently being trialled by my testing team and we’ll report back soon. November was very poor, but December has so far recovered all the November losses and some. I think we need more time before we can perform a definitive analysis of this system, but I am impressed by the way it has recovered the recent losses.

LSTrader http://www.lstrader.co.uk continues to go well and I’m impressed by Robert’s commitment to the cause. Results have been good and I look forward to collating the feedback from my testing crew.

Wealth Builder Wealth Builder was another system that we gave to the testing team first before being able to recommend. I put out an endorsement last week and so far, the feedback has been very positive.

Many people are commenting on how much they appreciate the daily emails from Neil which really help you to put the system into practice. It’s a simple system to get to grips with and Neil offers great support.

It gets the thumbs up from me.

Find out more here – http://www.canonburypublishing.com/wealthbuilder/

FX News Wiz http://www.fxnewswiz.com continues to go well and for once the reported profits are absolutely spot on. I’ll be doing a full review in the January edition of WRP.

The Wizard http://www.thewizard.com The Wizard’s forex and futures trades are continuing well. The trades can take a while to develop, but once a decent trade sets in, the wizards profit levels help you get the most out of it.

FX53 http://www.fx53.com has recently been taken off the market so Kevin can take a breather and deal with existing clients effectively. I’ve been impressed by Kevin and the FX53 set up since I first looked at it many months ago. It’s certainly been choppy over the last few months, but FX53 has still made profits by catching some huge moves. I’ll let you know when Kevin decides to open up FX 53 again.

London Rush I’ve had a member get in touch and tell me how well they’ve been doing following the http://www.londonforexrush.com/ system over the past few months. I’ll be taking a look soon, but any other feedback would be very much appreciated.

Free webinar from Phil Newton. Phil is one of the nice guys of the trading world and I will be reviewing his live trading website http://www.trading-strategies.info in the January edition of What Really Profits.

In association with FX Street, Phil is putting on a free two hour “kiss and tell” trading session live tomorrow from 11.00AM for two hours. Phil is a great guy and I highly recommend you tune in to what he has to say.

Give a little something back

This weekly column is dedicated to finding profitable trading programs & strategies to help start you on your path to trading success. However, with Christmas just a couple of weeks away, I’d like to use this column to spread a little festive spirit.

During a recession, people donate less to charities, while at the same time demand for their services can often increase. Charities do a great job, often on a shoestring budget. Many of the best charities put at least 80p of every £1.00 donation into front line services. That’s an incredibly efficient operating model.

Charities perform vital functions in society from helping vulnerable children to protecting endangered species.

Regular giving is the best way to donate. Just £3 per month via direct debit can really make a difference. Choose a charity that means something to you or that you can relate to.

You never know, the feel good factor might even help your trading!

My trades

Choppy stuff on the indices and my S&P 500 trades have been making little traction of late. I still have an upside bias in my trades, but we’re getting very little follow through. I won’t last, it never does.

I’ve been trading FX53 a lot more, focusing on the GBP/ USD with 5 minute charts and have enjoyed some good profits recently. There was a great 300 pip move that the system caught very well, though today’s chop has chipped into that a little. Overall it’s been a good week, but I wish the main equity indices would make their mind up in either direction.

This week’s hot trading buttons

The economic landscape will be dominated by the US interest rate statement due this evening. Analysts are expecting a fresh round of cuts from the Fed. Fed fund futures are currently implying a 60% probability of cut down to 0.25%, with a 30% probability of a cut down to 0.5%. On the same theme, UK rates are expected to push lower soon, and Wednesday’s MPC meeting minutes will help traders determinate the size of the likely cut.

Trading wisdom

“When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.”

P.J. O’Rourke