If you've been around the literature in this business long enough, you start to notice that new scams keep appearing. Then you notice that they are really just the same old scams, over and over. While they may vary in form and content, they all share one predominant trait: they just don't work in the market. Here are some of our "favorites."

Trading contests always seemed stupid to us. The winner may be a brilliant trader but could just as easily have opened several accounts and traded them against eachother in order to have one super account. For example, on day one the contestant might have half of his accounts long with maximum leverage and half short with maximum leverage. If the market rises, he closes the short accounts the next day, and reverses position on half of the long accounts taking them short. He keeps repeating this process until one account has been right every day of the contest. This process isn't cheap, but the payoff at the end can be lucrative. The contest prize may be small potatoes, but winning the contest practically guarantees a book deal, seminar audiences, and thousands of aspiring traders willing to pay for meaningless gibberish disguised as market expertise.

This one reappears in a lot of different forms nowadays. There are countless books about the "Warren Buffett method" of investing by people who have never worked for or with Mr. Buffett. They just use his name and claim that they are writing about a style of investing that Buffett made famous. The same goes for other celebrity investors such as Peter Lynch and George Soros. One scam artist even has a website that pretends to be about Soros' trading when the true purpose of the site is to link the visitor into something else. Another variant of these sorts of shenanigans can be found in sites purporting to be about W. D. Gann. First, Gann wasn't nearly as successful as people often claim. Second, he felt it important to keep his methods secret. Whatever techniques he used died with him. The same nonsense seems to surround the names of all successful traders and the problem is apparently here to stay.

One very popular website sells a very costly manual on a technique they call trend following. If you read their materials, you'd think that their clients constitute the management of the top hedge funds in the world. The site is littered with quotes, performance summaries and pictures of folks like Richard Dennis, Bill Eckhardt and Bill Dunn. What they leave out is that none of these men trade using the products this site sells. Even the idea of trend following as a method seems like a stupid ploy to us. Of course trading profits are the result of changes in price over time, otherwise known as trends. But did anyone not know this? Do they actually have clients saying to themselves, "Oh, price changes are a necessary condition for profitable trading?" The real embarassment is that the site's products are based on a system whose inventors have stopped using it decades ago.

There are countless seminars about trading but finally the "Teach Me" group has combined the trading seminar with the traveling circus. This group advertises using a late night infomercial where people blather on about how great the seminar is. Then the seminar comes to town and teaches total beginners how to become profitable technical analysis experts in a matter of hours. The tv program shows several happy couples walking out of the lecture hall after the seminar, talking about how they are ready to start trading as soon as they get home. Trading doesn't have to be hard, but if it were that easy, why would anyone waste their money on such stupid pursuits as medical school or oil exploration?

There are more types of scams than we could ever hope to keep track of but here is a short list of a few more:

• Anything that involves laying a spiral graph toy over a price chart
• Trading systems for one particular market such as feeder cattle or Euros
• A man in a cowboy hat selling a "powerful money manual"
• Option selling strategies
• Anything involving astrology or numerology
• Artificial intelligence or neural nets
• Newsletters about one particular stock
• Anyone claiming to be a "trading coach"
• System developers using online auctions as their main customer interface

Before getting involved with any product, system, newsletter or guru, ask the hard questions:

• Are product samples available for viewing?
• Do they have an impressive performance record?
• Can their materials be used without buying costly software?
• Do they explain how their system is supposed to work?

With iSigma, the answer to all of these is yes.