I try to provide posts on here to explain the realities of stock and option trading. The stock market is hard, takes practice/work, and there are no magic “bullets”. There are thousands of stock picking services, stock newsletters, and stock analysis using all types of strategies. Some are worth it and many are not. Some are nothing but hype and some are not.
Over time the longer you trade or invest, the more you realize that most stock picking services are not worth it. The REAL stock picking/analysis services are honest in their approach and tell you that you will suffer losses and they will have losing trades. Every trader or stock investor will have losses but it’s how you manage those losing trades is what makes a trader successful or not.
The problem I have with all the stock gurus, stock picking services,etc….that make crazy claims like 90% winning stock pick ratio or 5000% return in 18months is that you have to look at how a stock picking service actually calculates is returns, for example :
Some provide picks after the close and calculate returns based on closing price that day but if the stock gaps up at open no one could have actually bought that prior day closing price so the returns would be inaccurate. (this is especially true with illiquid or penny stocks)
Some stated returns assume you take every single trade which if they recommend 20 stocks a day is probably not realistic especially if you are already fully invested with their other recent picks.
Some returns assume you buy the same dollar amount of every trade no matter if its a $0.05 penny stock or a $80 blue chip stock….so if a $0.05 cent/share stock goes up 2cents then they claim a 40% return when most people wouldnt put the same amount of money in a penny stock as a $80blue chip stock.
As you can see it is important to be skeptical with any stock picking service that claims returns that sound too be good to be true (because most times they aren’t real)
Yes, there are some traders or investors that have an above average ability to pick winning stocks but most successful traders make a profit because cause they control losses and manage winners.
Some of the best traders ever had lots of losing trades but it was how they managed those trades that made them successful.
So be skeptical, read the fine print and see if you can find other people who haven’t written reviews about using the service.
I would like to create a section on this website with feedback from any visitors here, that would like to provide feedback on any stock picking services or newsletters.
If you have any experiences you would like to share please leave a comment here at bottom of this post or click “contact” on this site and I will add you comments for each service/guru you have feedback on.
If you ever want to see a great site with some independent analysis of various stock picking services, then check out CXO Advisory