Tom Gentile is back with an oldy, but goody. The “Four-Day Profit Cycle” teaser has been around since last year, but it’s still going strong, as it talks about an interesting trading strategy that can make you “$1,050 richer in 15 seconds”.
Trading systems often make bold and outlandish profit claims, but Tom assures us that “we've never seen anything like this, and we will never it again”. If your curiosity has been piqued, keep reading.
Tom claims he can teach us how to make 10x our money in as little as 4 months using a unique technique, which starts with just one trade per week. Perhaps the first question we should be asking is: Can we do so, without a degree of risk so high that not even professional traders would be willing to assume it?
Gentile is a professional trader with more than 30 years of experience and is known as “America’s number one pattern trader”. He has been featured on Fox Business, CNBC, and Bloomberg. He is also part of the Money Map Press, a well-known publisher in the financial market. In the past, we have covered both trading system-based teasers, see What are “Super Options” and teasers by Tom Gentile himself, including a Fast Fortune Club review.
In this particular pitch, the author claims that only $150 is needed to get you started in the trading world and that his strategy could net many times this small amount. He also says that making money as a beginner trader is quite easy, as long as you just stick to the program he provides, and follow the rules he abides by.
Since we now know that the author specializes in pattern trading, a type of regulatory designation given to traders that execute four or more day trades over the span of a week using a margin account. Perhaps the author is teasing trading a particular type of securities, such as stock options or a speculative form of trading known as short sales?
What we do know so far, is that he premise of the strategy is when you invest your money, you should reinvest all your profits in order to get more returns, without ever withdrawing your money from your account. Although this may sound like a good idea in theory if it seems like you have a good thing going, there is an old adage when it comes to investing that says: “past results are no indication of future returns”.
In spite of this timeless wisdom, Tom attempts to make believers out of us with a few past examples and some disclosures.
The Sales Pitch
The entire “Four-Day Profit Cycle” presentation is a teaser aimed to promote Gentile’s most popular investment newsletter, Weekly Cash Clock, for $1,995 per year.
Those who are thinking of signing up will receive access to one new options trading opportunity every week, which can deliver 50-100% profits. Some of the other perks include a video course named The Essentials of Profitable Options Trading, where you can learn more about Gentile’s trading strategy, weekly cash clock alerts, videos, text messages, as well as weekly coaching webinars.
What in the World is The “Four-Day Profit Cycle”?
To start, Tom illustrates how an initial investment of only $5,000 could have turned into $52,455 in just four months of trading in early 2019:
Tom says that he relies on a “pattern” that he spots by studying stock charts. But, rather than actually studying chart patterns himself, he instead relies on a “proprietary tool” that he calls the Weekly Cash Clock. He says that “he's got a team of programmers working around the clock, tracking the precise price movements of the top 250 stocks”. It is the data gleaned from this that goes into the Weekly Cash Clock tool.
In Gentile's system, a pattern occurs when “three trading channels align.” These three channels are:
Once these all line up, he says he can then predict how the security being traded will move over the next few days and whether it will go up or down.
As we initially suspected, rather than trading stocks directly, Tom finds options associated with the stock he has identified and trades them instead. He states that “weekly options are designed to start, end, and distribute any profits back to you within one week.” If that weren't enough, Tom's system apparently also makes money in all market conditions.
The one big difference between Tom's system and regular, old options contracts is that his last for 8 days, while normal ones extend up to a month. Apart from this, the author is rather tight lipped about the inner workings of his options-based, pattern trading system.
So What is the “Four-Day Profit Cycle” He's Teasing?
Unfortunately, Gentile’s video presentation doesn’t tease anything but a potential proprietary trading system for those willing to subscribe to his newsletter. There are no details about any particular stock or options to trade or how to actually incorporate his system into your real-life trades.
He does however, break down the “four day profit cycle” into three fundamental components:
- You only have to make one trade per week. Tom will send you a trade recommendation every week.
- Placing your trade is easy, it will only take five minutes to execute and you don’t need to be an experienced trader.
- You will usually close your positions out in a matter of days (four days being the typical amount of time a trade will take).
If you follow his instructions to the letter, it will take around four months to grow your initial investment by 10x.
Generally speaking, options trading allows you to speculate on price movements, using leverage, without actually owning a stock. Despite claims to the contrary, this strategy is not the simplest in the world and also involves taking on a degree of risk which most non-professional traders/investors should not be taking on. The fact that Gentile’s system is employing a team of programmers to track the price movements of 250 stocks of the most popular stocks speaks to this.
This being said, Tom is an expert at options trading. So how much merit does his technical analysis-based system actually have?
Opportunity to Make 10x Your Money?
The author claims that “you can turn $5,000 into $50,000… or $10,000 into $100,000… starting with just one trade per week”. He also throws in the fact that “The Four-Day Profit Cycle performed 17X times better than the S&P 500 through the first eight months of last year” (at which time this teaser was initially released).
We hear about proprietary trading systems, primarily the high frequency-based institutional kind, that “beats” the market indexes all the time. The problem is, I personally have yet to see a short-term, retail trading system that is accessible by you and me, beat the market with any consistency for more than a short-term period of time, that typically lasts no longer than a few months.
Without knowing the inner-most details or long-term back test results of Tom's system, my gut tells me this isn't all that different from most retail trading systems, that promise big returns only to fall short of the hype.
Quick Recap & Conclusion
- Experienced pattern trader Tom Gentile shares his latest marketing video with us, called Four-Day Profit Cycle, which promises up to 10x returns with only one trade per week.
- In order to get access to all the details about this opportunity, you will have to subscribe to his newsletter, Weekly Cash Clock, for $1,995 per year. Keep in mind that there is no refund policy but Gentile and his staff claim that “if you fail to multiply your money by 10x in 4 months”, you get another year of subscription absolutely free.
- There is no specific stock or stock options being teased, just a proprietary trading strategy called the Weekly Cash Clock, so named after the newsletter of the title.
- Without more details or audited back-test results, we cannot rely solely on the claims being offered to us to recommended an options-based retail trading system.
Do you currently employ any short-term based trading system? What has been your experience/results with it? Let us know in the comment section below.