Mindful Trader was created because its founder, Eric Ferguson, wanted to design a better swing trade alert service. He did just that with Mindful Trader, which focuses on trades that have a statistical, quantitative edge.
What is Mindful Trader?
Mindful Trader is a stock picking service that focuses on swing trades. Swing trading is a form of short-term stock trading with a goal of capitalizing on short- to medium-term price increases. Eric developed the service using 20 years of data and statistics. Subscribers receive stock trade alerts whenever Eric makes a trade for himself, from his actual trading accounts…with his own money.
Eric graduated from Stanford University with a degree in economics and even scored a perfect score on the math section of the SAT. He launched the service because, despite his background in economics, he initially lost money in the financial markets when he started trading. He began looking for a service that suited his needs, but much to his dismay, he couldn’t find one.
Eric found that there were no good trading services out there that fit his preferred trading style that were research-backed and the service wasn’t based around just making a sales pitch. He wanted something better—something that was backed by research and with a track record of success.
Thus, Eric started Mindful Trader to fill the role he found had been lacking.
There’s a lot to admire about Mindful Trader, starting with the founder, Eric, and his unwavering commitment to providing a quality trading service. Here are some of the aspects we particularly appreciate:
Steadfast Focus on Trading: Over the years, Eric has remained consistent in his approach, concentrating on what he does best – trading. His primary focus isn’t marketing his service or making extravagant promises; instead, he dedicates his energy to identifying profitable trades based on rigorous data analysis. This level of dedication is quite rare in the trading world and certainly adds to the appeal of Mindful Trader.
Simplistic Website Design: While some may find Mindful Trader’s website a little outdated, we see it as refreshingly simple and straightforward. It’s easy to navigate and find the information you need without being distracted by flashy graphics or unnecessary fluff.
Authenticity and Transparency: Mindful Trader is a breath of fresh air in an industry often cluttered with over-the-top sales language and gimmicks. There are no pop-up discounts as you navigate away or pictures of luxury cars and lavish lifestyles used to lure in potential subscribers. Instead, what you get is genuine, straightforward information about the trading service.
Focus on Service, Not Sales: One of the most compelling aspects of Mindful Trader is Eric’s focus on providing a top-notch trading service rather than being a skilled salesperson. He doesn’t use high-pressure tactics to draw you in; instead, his trading results speak for themselves. This approach suggests a high level of integrity and a commitment to his subscribers’ success, which is exactly what you’d want if you’re following someone’s trades.
In short, we admire Mindful Trader’s no-nonsense, data-driven approach and its emphasis on service over sales. The simplicity and authenticity of Eric’s offering truly stand out in the trading service landscape. It’s clear that his priority is his subscribers’ trading success, which is precisely what makes Mindful Trader such an appealing choice.
Mindful Trader Trading Style
Mindful Trader uses a statistical, data-driven approach to trading. In other words, it’s not just based on what’s hot or what interests him at the time. If you sign up for Mindful Trader, you will be copying the style of Eric, but you will find he is quite thorough in his approach.
This video is a bit technical, sure, but what really stands out is the fact that Eric has run more than 5,000 sets of code. From there, he has gotten it all the way down to a dozen or so code sets that drive his statistical approach.
Imagine the amount of time it must have taken to test that many sets of code! Well, he has 20 years’ worth of returns data available, so that should tell you something.
Eric still uses multiple strategies to buy and sell stocks that “creates diversity, lowers risk exposure, and can compound returns better.” And he tests all of these strategies against his 20 years of data. Each strategy must be successful regardless of the profit/loss criteria.
Each strategy is tested with the Monte Carlo method, which means he uses random sampling of data to model the probability of different outcomes. He uses more than 10,000 different variations during these tests.
Mindful Trader Returns
In an investment world often clouded by complexity and ambiguity, Eric from Mindful Trader continues to carve a distinct path. The last six months have been another testament to his unique investment strategies and financial wisdom.
Eric Ferguson’s trade performance in this period has been nothing short of impressive, particularly with his stellar achievements in the ‘Extra Options Account’.
The ‘Extra Options Account’, which is geared towards options trading, yielded an outstanding total positive return of 43.1% over the past half-year. This performance is a testament to Eric’s proficiency in options trading, showcasing his ability to navigate volatile markets and capitalize on opportunities.
His strategy has led to profits that significantly outpace the average market returns, making his approach a compelling one for those looking to maximize their returns.
Meanwhile, Eric’s Main Account, which focuses on individual stocks, also turned in a solid performance with a 4.1% total return over the last six months. While this figure may seem modest in comparison to the Extra Options Account, it’s important to consider the relative stability and lower risk associated with this type of investment strategy.
This return is on par with the general market performance and is a clear indication of Eric’s balanced and diversified approach.
What sets Eric apart, however, is not just his impressive returns but his level of transparency. The Mindful Trader offers an open book to his investment strategy, listing every single trade (options picks included) made in each account over the last six months.
This full transparency is truly refreshing in an industry where such openness is rare. Investors following Eric not only benefit from his financial acumen but also gain a valuable educational opportunity, learning from his trading strategies and decision-making process.
Overview of Mindful Trader’s Strategies
Mindful Trader’s strategies are meticulously crafted and thoroughly tested to provide reliable, profitable trading signals. These strategies are the result of years of rigorous research and careful application of statistical techniques. Let’s break down the key characteristics of these strategies:
Diversification: Mindful Trader’s trades span across a variety of stocks and options, covering numerous industries. This strategic diversification helps mitigate risk exposure.
Long-Term Backtesting: Every trading strategy undergoes extensive backtesting (historical data analysis) for at least 20 years. This ensures that the strategies are versatile and effective across various market conditions, from bullish to bearish and everything in between.
Raw Edge: Each strategy possesses a significant “raw edge”, meaning it isn’t overly reliant on specific conditions for profitability. The strategies are robust and demonstrate profitability across varying profit or loss criteria.
Monte Carlo Testing: Mindful Trader employs Monte Carlo simulations to assess the potential drawdowns of a strategy. It provides a stress test for strategies, simulating multiple hypothetical scenarios to identify worst-case outcomes.
Correlation Tests: The service conducts statistical correlation tests to ensure that individual strategies within the portfolio are not too closely correlated. This measure further diversifies the portfolio and shields against potential synchronized strategy failures.
Out-of-Sample Tests: To avoid overfitting, out-of-sample tests are performed. This means that strategies are not only backtested on one historical sample but also validated across different time periods to ensure their effectiveness.
Standard Deviation Tests: Once the strategies are live, their performance is continually monitored against their 20-year standard deviation lines from backtesting results. This helps ensure that the strategies are performing within expected parameters.
Commissions and Slippage: All backtests account for transaction costs and slippage (the difference between the expected price of a trade and the price at which the trade is actually executed). This leads to a more accurate representation of potential returns.
Mindful Trader Features
If you are going to pay a monthly subscription fee for a service, you probably want to be sure you are getting your money’s worth. Let’s take a look at what Mindful Trader has to offer.
Stock picks are the main feature of the service. You can expect to receive 6-8 picks per week on average, but that can vary quite a bit. Some weeks may not have any pick, while others you may see a double-digit number of picks.
Each trade alert has a few different parts to it. Here is what you will see when you receive an alert:
Bought or shorted. “Bought WMT” or “Bought ETN”: ticker of the stock he traded. Note that there could be times when it says “shorted” instead of “bought,” as he does short sell. However, most picks will be for buys.
Sale Price. After the “bought” or “shorted” indication is the sale price. This is the price he either paid or sold the stock for.
The target price. This is the price the stock must reach before his next action. If he just bought a stock, it must go up to the profit target before he can sell it for a profit. In the case of a short, the price must decline to the target before he can buy the stock back.
Stop Loss: This is a basic tool all active traders If the stock moves opposite of the direction he expects (and the opposite of the direction it must move to turn a profit), you can have a stop loss price. That will allow you to automatically sell (or buy) at a certain price to cut your losses, then move on to the next trade.
As you can see, the picks are simple, straightforward, and easy to follow.
Note that Eric sometimes deals in MES futures, which you can see in the snippet above (indicated by /MES). These are somewhat like trading in the S&P 500, but they use leverage.
This makes them riskier, and futures can be particularly speculative. If you aren’t comfortable with that style of trading, you could always ignore them; the other trades should still make the service worthwhile.
Mindful Trader Pricing
The cost of Mindful Trader is $47/month. That is more expensive than buy-and-hold services like The Motley Fool, but it’s less costly than day trading services such as Investors Underground. Expected returns for Mindful Trader fall in between those other services, too, so the pricing seems right on point.
Plus, Eric spent $200,000 of his own money developing the service, so you’re clearly getting a deal by comparison! Currently, there is only one monthly plan available.
Who is Mindful Trader Best for?
Mindful Trader is an ideal service for several types of investors and traders:
Swing Traders: The service is specifically designed for swing traders who look to capitalize on short to medium-term price movements in the market. Eric’s data-driven approach to finding swing trades provides a robust framework for these types of traders.
Busy Individuals: People who are interested in trading but lack the time to do the necessary research will find Mindful Trader extremely valuable. The service does all the hard work of data analysis and presents subscribers with clear, actionable trade alerts.
Data-Driven Investors: If you prefer making decisions based on quantitative data rather than gut feelings or qualitative factors, Mindful Trader is a good match. Eric’s methodology is heavily reliant on rigorous backtesting and statistical analysis.
Learning Traders: Those who want to understand the rationale behind each trade will appreciate the educational elements of the service. Eric often provides detailed explanations of his trading strategies, which can be a valuable learning tool. A beginner trader could learn a lot from Eric.
Who is Mindful Trader Not Ideal for?
While Mindful Trader has a broad appeal, it might not be the best fit for certain individuals:
Long-Term Investors: If you’re a buy-and-hold investor who prefers to keep stocks for years or even decades, Mindful Trader’s swing trading approach may not align with your strategy. The service’s focus is on short to medium-term trades, which typically last a few days to weeks.
Day Traders: Mindful Trader may not be the best choice for day traders who make multiple trades within a single day. The service’s trade recommendations are based on swing trading, which involves holding positions for more than one day.
Risk-Averse Traders: While Eric employs risk management strategies, swing trading inherently involves a higher level of risk compared to long-term investing. If you’re uncomfortable with short-term market volatility or the possibility of losses, Mindful Trader might not be for you. That said, Eric trades in very popular, and highly liquid stocks. He is not a penny stock picker.
Mindful Trader Review – Final Thoughts
In an industry saturated with trading services, Mindful Trader distinguishes itself with its data-driven, transparent, and rigorous approach to swing trading. The service’s commitment to backtesting, diversification, and risk management, combined with a track record of impressive returns, makes it a compelling choice for many traders.
Eric’s methodology and knowledge about trading, grounded in extensive data analysis and statistical techniques, offers a level of robustness that is quite rare in the trading world. His commitment to transparency, evidenced by sharing every trade he makes, provides not only potential financial gains but also an excellent learning opportunity.
The service is not without its caveats – it’s not ideal for long-term investors, day traders, or those who are risk-averse. However, for swing traders, busy individuals, data-driven investors, and those keen to learn more about trading, Mindful Trader presents an exceptional offering.
The pricing, at $47 per month, may seem a bit steep for newer traders. However, considering the quality of the service and the potential returns, it appears to be excellent value for money. The fact that Eric has invested $200,000 of his own money in developing this system speaks volumes about his confidence in the service.
For those who resonate with its trading style, it represents a solid investment in your trading future.
Do you have questions about Mindful Trader and how it fits into your investment strategy? We answer the most important questions below.
By signing up for an account with Mindful Trader, you are not giving the platform access to your money or investment portfolio. No sensitive information is required to create an account, only your email address.
The core focus of Mindful Trader is data and providing swing trading alerts for you to emulate through your usual broker. Since the platform provides no access to your portfolio, Mindful Trader is perfectly safe to use.
Mindful Trader is a relatively new service, therefore there is currently no dedicated mobile app. Although alerts can be accessed via mobile, the platform isn’t optimized for mobile devices.
For the best experience, use the platform on your desktop or laptop computer.
Many similar platforms tend to focus on penny stocks. These are the stocks of micro-companies priced at mere pennies. Unfortunately, these are vulnerable to “pump and dump” schemes, therefore many swing traders are vulnerable to missing the rush and buying high.
As a result of these problems, Mindful Trader focuses on large-cap companies, which are less likely to experience wild fluctuations that could leave swing traders getting burned.
Stock alert services often focus on trades that require up-to-the-minute action. Miss the alert and you’re either left holding the bag or waiting for that next trade.
According to the Mindful Trader website, the stock alerts triggered utilize preset profit and loss points, therefore they’re extremely low-maintenance. Each trade lasts for about a week, so you don’t need to be glued to your computer to take advantage of Mindful Trader.
Other than signing up for the service, all you need is a brokerage account and some cash. Eric uses TD Ameritrade, but whichever brokerage you prefer will work. While it’s possible to emulate Eric’s strategy with less starting capital, he recommends at least $10,000 to start.
That might sound like a lot, but one thing to remember is that The Mindful Trader charges a flat monthly fee. Services that charge a flat monthly fee are almost always more beneficial the larger your portfolio is.
That’s because they aren’t charging a percentage of your portfolio, so how much you pay in fees never increases. Of course, The Mindful Trader isn’t managing your portfolio for you, so the flat fee makes sense.
Jeremy Biberdorf is the founder of Modest Money. After working many years in the website marketing industry, he decided to take on blogging full time and also get his finances headed in the right direction. Also check out his contributions to Equities.com and Benzinga.