Online Trading System

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By searching "Options Trading System" as an exact phrase in Google you will receive over 40,000 results. Because of the leverage that the options market provides, this market has became one of the most popular among speculative investors. So, it's not a surprise that many online services offer advice - options signals, trading newsletters, market overview, automatic trading systems, auto trading buy/sell alerts and much more that can be used to trade on the options market.

The question is how can a trader choose the right one from such vast number of the services available. Remember, there is no service in the financial world that will take responsibility for the money you lose on the market. You may find big investment companies, registered investment advisors, however each of them will show you the disclosure statement where it states black on white that you are fully aware of the investment risk and you are the only one who is responsible for trading decisions.

Below you will find three simple questions that should be answered before subscribing and dedicating your money to a particular online trading system:

1. Does the online trading service allow you to auto-trade signals (newsletters) with any online broker?
   
   If not, then WHY?
   
   Is it because online brokers refuse to auto-trade signals that are not clear, or perhaps refuse to do so because the alerts are not executable, or because they received complaints from the traders that the service trade history does not match the real signals... Many traders would say: "I don't care why they are not autotradable. If there is no broker who trusts them, I do not trust them either." And this trader would be right. There is no sense analyzing, evaluating and investing your money with a service that is suspicious from the outset.
   
   You will find a list of the major online brokers who provide autotrading at
   http://www.qqq-options-trading.com/support/autotrading_brokers.asp.
   Simply, go to the broker, find the list of the services that are autotradable and start from there, rather than analyzing 40,000 results from the Google search.
    
2. Is the history of the past trades available for performance analysis?
   
   A trader should be able to review a system's trade history. If the traders' history is not available or it's difficult to locate on the web-site or it's presented in a format that is not suitable for analysis and tells basically nothing - then the reasonable question could be: WHY? Is there something to hide?
   
   Without a trading history it's difficult to correctly evaluate any trading system. A trader will not be able to answer the simple questions, such as what is the average price of the used options, how long the system stays in the position, how many trades were opened at the time, what options expiration is used, what min amount could be invested, what is the system performance and much more...
   
   The history of the past trades should be accessible and easily located on the home page. The history should be represented in a format suitable to analysis. It is especially useful if the service already provides statistics similar to
   http://www.qqq-options-trading.com/signals_QQQQstat.asp
   as well as it additionally provides calculated semiannual and annual returns.
    
3. Are options signals monitored by an independent third party?
   
   At the current moment you may find several well known independent third party services that for a small membership fee will provide you with detailed historical track record of the different online options trading systems and advisory services they track. As a rule these services have an agreement with different online "advisory" services on tracking their records and any trader may easily check and compare the past trades on the subject if they were changed in order to hide some lost trades. Some of these services not only track the trades but may provide you with detailed statistic numbers for each particular trading system.
   
   Again, if you do not find the name of the online advisory service you are interested in on the list, you may ask WHY?

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