People purchase automated trading systems for many different reasons, but for most it's because they lack either the time or skills to make their own. Some trading systems are fairly complex and still require a fair amount of training and sophistication to be used successfully. Others, like the Doubling Stocks newsletter, take care of the stock picking for you rather than giving you a bunch of rules that you're expected to follow to pick your own stocks.
While Marl, the trading robot, has an average return of around 100%, hence the name of the newsletter, many people apply the stock picks incorrectly, fail to see the rewards, and then lose faith in the system. It's unfortunate because with a little coaching some of the trading systems, marl, can become the incredible money machines they're touted to be.
Through personal experience I have indeed found the stock picks from the Doubling Stocks newsletter to have an average rate of return of just over 100%. This is truly a incredible feat that is becoming legendary in the trading industry. Unfortunately, when some people read about these claims in the Doubling Stocks material they get caught up in the profit potential and fail to understand what "average" really means. They believe they're going to turn $200 in to $400 in their first week, then $400 in to $800 in their second week and by the end of the first month they've turned $200 in to $3200. Oh the power of compounding!
Reality check time! It's naive to think "every" stock pick will double your money. And average return is just that, average. If you expect to drop your entire bankroll on a stock pick then you're going to go broke very quickly. I know this sounds obvious once you think about it for a moment, but that's the problem, people get emotional about the upside potential and fail to (or choose not to) think about it. Who wants to let reality get in the way when they're having so much fun thinking about all the money they're going to make.
Fortunately, with a little reality check and some proper money management, you can reap the rewards the Doubling Stocks newsletter claims. When placing a trade, with any trading system, you need to be sure you can weather the storm when you have a losing trade or even a few losing trade in a row. If you get knocked out of the game because you've put too much of your bankroll on the line for a single trade then you won't be around for the good trades and it will be impossible to win at the trading game.
How much of your bankroll you put on the line plays a huge factor in your success. As a rule of thumb I suggest you never spend more than 20% of your bankroll on a single trade, and since you're never going to watch a stock drop to $0 before getting out, this means you're actually risking much less than %20 of your total bankroll. For some, this may seem like your defeating the purpose of "doubling", but in fact it's crucial for true success. These are not long term buy-and-hold investments. These are short term trades which carry a much higher risk, as well as a much higher reward. Although successful traders understand this, beginners often learn it the hard way. No worries though, with the compounding effect you're going to see rewards like you never imagined, as long as you play smart and stay in the game.
It's not uncommon to be sitting on a winning trading system or newsletter and not even know it because we're applying it incorrectly. Sometimes this is due to poorly written instructions, and sometimes it's because we've allowed the potential upside to cloud our judgment. Having a coach or guide to help fill in the gaps can often help us see more clearly and can make the difference between failure and incredible success.
Article source: Tom Sanders
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