Black box trading is essentially a computer program designed to trigger buy and sell signals on investment instruments. There are strong arguments that black box trading is here to stay – and they are likely correct in that assumption – but the trouble is, they don’t work. Or, should I suggest, they do not work as effective tools to grow your account.

These computer models employ a unique logarithm or formula that gives an indication when certain parameters are met. Upon getting the indication, you would enter or exit a position. It is expected that the computer model would somehow know when those setups occur and  the trader takes advantage of the situation.

The problem is. those formulas are static and the market is dynamic. The fluidity of the market will eventually cause the constant formula to give an erroneous reading. Of course, no once calls the developer to say the market has changed and better update the formula. In fact, you do not know when this occurs until it is too late; the trader lost his/her investment. Too bad, so sad.

The trader often does well with these systems, developing an ever growing confidence and thereby entering with larger positions. When the inevitable happens, often times huge money is lost.

We have a black box ourselves in the Launch Pad Software. This program is designed to trigger a ‘once a day’ buy indication on SPY. It is very easy to use and with a standard 6% profit target, it most often is accurate, delivering your expected profits. However, the Launch Pad too, can miss the mark if the market behavior changes outside the parameters of the formula.

That said, we solved the issue of the inevitable error that will occur. When you subscribe to our Launch Pad Software, we insist you also study our e-book ‘Repairing Trades Gone Bad’. We are so insistent that we include this in every subscription. When you join the Launch Pad Software, you are charged $300, then your weekly rate of $100 is applied after 3 weeks, essentially guaranteeing that you accept this book. Of course, whether you read it or not is your own peril but we strive to engage everyone in managing their positions, regardless of how it is entered.

Just like you would never jump out of an airplane without a parachute, you should never trade without a solid technique to manage losers. If any guru ever tells you he never loses, know that he is lying to you. All traders experience loss.

Stay abreast of the market and your positions to experience long term financial gains. Our Launch Pad package comes complete with the tools you need to actively manage all your positions, turning your losers into winners.

No one does it better.

 

Head Trader Hugh

daytradespy.com

April, 2017

 

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