The first thing that pops into my head is if this system is so good why are they willing to share it for the lowly sum of $350 or $19.95 per month or some other cheap price. Of course, some of them will move the decimal point to the right and increase that front number, but not to worry - it is sold with a money back guarantee! Does that guarantee cover any losses I may incur if I rub their magic lantern and trade what the genie says? I don’t think so.

Should anyone desire to put his toe in the water here are some questions that are a must for any advisor:

1. Are the figures shown actual trades or is this hypothetical? If it is hypothetical stop right there. Total BS. Accept only actual trade numbers.

2. What is the minimum size account needed to take all signals?

3. Are stop loss orders employed? Never buy any tout sheet that does not have a built in protection.

4. Is slippage and commission figured in?

5. If all trades were made for the past year what was the starting amount and the amount in the account at the end of the year? Then subtract slippage and commission.

6. What was the largest single loss?

7. What was the largest continuous drawdown (loss)?

8. How many winning trades? And average profit?

9. How many losing trades? And average loss?

10. Are they willing to refer a few clients who are using your method with their permission, of course? (Get references.)

It has been my experience that traders will not receive an answer or might get a form letter saying their method is proprietary information and cannot be given out. Hogwash. We know where you can put that letter.

Ask to see their model account. Surprisingly the Securities and Exchange Commission does not require these hucksters to maintain such an account. I'd like to see such a regulation passed; there would be a lot less of these methods and systems sold as most of them would go broke.

If they are able to prove out their method to the trader’s satisfaction he might want to try their system; however, if the buyer does not plan to follow every trade as outlined in the method then it should not be bought. Don’t try to outsmart the system.

Before any investor sends money make them prove with documentation exactly what they are selling.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know. Copyright 2006 All rights reserved.

Copyright 2006 Albert W. Thomas All rights reserved. Author of "IF IT DOESN'T GO UP, DON'T BUY IT!"