I find surfing the Internet to be an emotional experience. I enter investing forums, looking to continue earlier conversations or to find a rookie's question to answer. Every once in awhile I come across angry people who post insulting replies to beginners who are eager to learn. Why would anyone do that? Someone comes for help and these angry souls bash them for not knowing the answers to simple questions. I find that to be very upsetting.
Happily, the majority of posters are helpful.
Currently someone is nastily criticizing me for teaching people to understand how options work, when he believes I should be teaching them to trade and make money. He has no clue that by understanding, the trader is well placed to earn that money on his/her own.
As part of my surfing, I visit many blogs. The blogosphere is becoming more relevant in our lives, because there are fantastic bloggers who provide outstanding opinion and analysis. Left wing, right wing, moderate – take your pick and you can find someone who has the ability to discuss politics in a rational manner – without anger or name-calling. Of course, there are also the angry, mean-spirited bloggers. I don't know what purpose they serve, other than to increase their own visibility.
As the newspaper business is sadly fading, there is an ever-increasing need for news sources and commentary. Bloggers are filling the void. The quality of those blogs ranges from outstanding to pathetic.
Many are blogs written with good intentions, but filled with misleading information. And that's as true in the investment arena as anywhere else.
Among my pet peeves are blogs that sell trading systems. Some make reasonable claims and some even provide documented (independent audit) of results. But, most make absurd claims, seeking to be paid large fees by the ignorant. And, as P.T. Barnum said: "There's a fool born every minute."
Via e-mail, I've
been in touch with someone who is literally down to his last few thousand
dollars and has reached retirement age. He currently spends his cash on lessons and
trading systems, looking, in vain, for a magic way to provide for his retirement. It's
too late. He cannot be saved. It hurts that this man is throwing away his little remaining reserves on an impossible dream.
I see too many bloggers telling readers that (for a fee) they can learn to have an 85% or 90% success rate with an income generating strategy. And if that's not enough, the claim is that it's easy to generate 10% per month, on a consistent basis. Of course these are not among the audited sites and the careless reader sends in the money and finds that the story is nothing more than selling far OTM put and call spreads – the iron condor strategy.
It is not possible to earn 10% per month with an 85% success rate. It's all a pack of lies. What I, and other reputable bloggers are trying to do is educate, entertain, and spread information that should be helpful to readers. Our intention is to help you avoid big mistakes, take a reasonable path when trading, and come out ahead of the game.
Can you imagine that someone who can earn 10% month after month would tell anyone the secret? Earning 10% per month multiplies your investment by a factor of 10 in just two years. $1,000 becomes one million in just 6 years (and one month), and one billion in 12 years (+ two months). Who would sell that information? No one. But the gullible buy it.
Here, at Options for Rookies, my objective is to show you how to use a fantastic risk reducing investment tool, the option. And the rest is up to you. I'll continue to discuss trading ideas, strategies and reply to questions.