It is easy to claim that if you follow my system or learn my technique, you'll get investment/trading return of 100% within 6 months or make RM100,000 within 2 months etc.
Look at the back-test Performance Summary on FKLI 10-month period using standard trend following strategy, 350% return ! ! ! But can it really stand the test of time ? The law of big numbers ?
But the truth is, investors will have to do fact checking / due diligence on those claims on their own. Now that is the tough part. How many retail investors ask for 10 years statistical back-tested performance summary of the strategy claim by the system / course seller ? How many want to know about the risk-adjusted return of the said system / strategy ?
After Madoff's case, the best is to find out the strategy being used and do the due diligence by performing statistical back-testing on your own. Then ask yourself, is it possible to get such a high return with so low risk ? If it sounds too good to be true, it usually is ! But how many retail investors actually can do that ?
Greed and ignorance will always come with a big price tag eventually. I have tested many trend following / reversal or range and volatility systems and their variant strategies and I hate to say that I have yet to find one strategy that will give me Compound Annual Growth Rate (10-year period) of more than 25%. Of course if I curve-fit enough or select a short period that favors the particular strategy, I could easily get 100% return within 2-3 months time. But what is the point ? You will be cheating yourself !
No one plans to lose their money in investing or trading but losers usually have no plan and succumb to their feeling or can't stick to their plan because they second guess or don't have confidence trading their plan as they don't know how to find or develop a trading strategy that will match with their personal character. Learn to verify claims by doing back-testing on your own !
But the truth is, investors will have to do fact checking / due diligence on those claims on their own. Now that is the tough part. How many retail investors ask for 10 years statistical back-tested performance summary of the strategy claim by the system / course seller ? How many want to know about the risk-adjusted return of the said system / strategy ?
After Madoff's case, the best is to find out the strategy being used and do the due diligence by performing statistical back-testing on your own. Then ask yourself, is it possible to get such a high return with so low risk ? If it sounds too good to be true, it usually is ! But how many retail investors actually can do that ?
Greed and ignorance will always come with a big price tag eventually. I have tested many trend following / reversal or range and volatility systems and their variant strategies and I hate to say that I have yet to find one strategy that will give me Compound Annual Growth Rate (10-year period) of more than 25%. Of course if I curve-fit enough or select a short period that favors the particular strategy, I could easily get 100% return within 2-3 months time. But what is the point ? You will be cheating yourself !
No one plans to lose their money in investing or trading but losers usually have no plan and succumb to their feeling or can't stick to their plan because they second guess or don't have confidence trading their plan as they don't know how to find or develop a trading strategy that will match with their personal character. Learn to verify claims by doing back-testing on your own !
