Trader Meetups (Part 10)

Until recently, I had only attended four different meetup groups.  In the name of research, I attended a new meetup group on February 28.

This meetup was held at the offices of the sponsoring company.  Three of the co-organizers work for this company.  The employee who greeted me described the company as “still a startup and many of us pull 14-16-hour shifts, which is why we have this Foosball table and Nerf guns… we like to have fun.”  The fourth co-organizer, John Doe (JD for short) works for a sister company.  He was the evening’s presenter:  a full-time trader who runs a premium service.  For $79/month, one can subscribe and get his trades.  Several employees (co-founders?) of the startup sat in on the presentation.

The meetup had over 20 attendees, six pizzas, three cases of pop and one case of light beer.  Oh–Crazy Bread too!  They spared no expense.  I would rate the provisions an A+ (red flag… remember what I said about “eat, drink, and be merry?”).

The presentation content was rich in smiles and cool optimism as many winning trades (types) were discussed.  JD started by discussing a five-indicator Bollinger Band strategy for intraday scans, which was illustrated using a single chart example.  He spent at least 30 minutes analyzing this one profitable trade, which helped to give the chart template a “holy grail” feel (pop quiz:  how useful is a sample size of one?).  He also talked about other spread trade strategies and smiled liberally when describing profitable endings like 50-100%+ trade returns.  Within the first 45 minutes, I really wanted to raise my hand and say “you make option trading sound like an ATM machine.”  I exercised staunch restraint.

Given a trade with so many moving parts (five indicators), I did ask JD how he backtested the Bollinger Band strategy.  He didn’t.  He said that he ran backtesting “a long time ago” but said that he now just runs his intraday scans, places the trades, and makes money.

Does this seem at all suspicious to you?  Why or why not?