Mindful Trader was created because its founder, Eric, 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.
Mindful Trader is best for:
Those who don’t have time to do in-depth research
The stock market can be a chaotic place. There are few better examples of this than 2020, which saw both unprecedented declines and gains in the market. I know that when I saw all the madness unfold, it made me want to pull everything out of the market.
And I was not alone, as the stock market declined 34% in just 33 calendar days in 2020. That was the largest drop over that period in the stock market’s history, which doesn’t happen unless huge numbers of investors are panicking.
Fortunately, services like Mindful Trader can help. While it can’t prevent the stock market from seeing huge declines, it can help you make better trading decisions. Mindful Trader provides picks and focuses on swing trading.
If you have mostly been investing in index funds and perhaps investing in a few individual stocks here and there, you may not be familiar with swing trading. This review will help better explain what they are and how they can help you make better, more profitable trades.
Eric, who runs Mindful Trader, has had a 146% median return rate in back tests over the past 20 years. That’s pretty fantastic performance, so we’ll also break down how exactly he got there and how you can do the same.
What is Mindful Trader?
Mindful Trader is a stock pick 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.
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 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.
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
And now to the good stuff. After all, what you really want to know is what kind of returns you can expect, right? Well, we’ve got you covered.
Eric provides 20 years of performance data to show that he knows his stuff. His median annual return for the past 20 years is 146%. In other words, that’s his median return per year.
Of course, things have not always been so rosy. The Dot-com bubble didn’t treat him so well, and it looks like 2020 is similar due to COVID-19.
Mindful Trader Annual Returns:
Even in Eric’s down years, he still had positive returns—6% and 8% in 2001 and 2002, respectively. And his return in 2008, during the Great Recession? 72%.
That’s quite impressive considering those are his “bad” years. Most passive investors hope for a long-term average return right in that range. His approach isn’t exactly passive, but he does all the data-crunching for you—all you have to do is execute the trades when he posts stock picks.
Eric also provides a running list of his real daily returns for each of the past 6 weeks. The list is updated daily so you can get a full sense of what to expect.
He is also transparent and honest about the fact that past performance doesn’t guarantee future performance. That being said, his 20 years of returns are certainly encouraging.
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.
Stoploss: This is a basic tool all active traders use. 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 at a certain 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.
Is Mindful Trader Right For You?
As with any service, Mindful Trader won’t be the best choice for everyone. Here’s who it’s best for:
Those who want to maximize returns but don’t have the time/risk tolerance/capital needed to day trade
Those who prefer a data-driven approach
Overall, Mindful Trader provides solid performance in the form of easy-to-follow stock picks. Eric is honest and transparent and has 20 years of data to prove his approach works year after year.
If swing trading is your cup of tea, so, too, might Mindful Trader.
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.
Bob Haegele is a personal finance writer, entrepreneur, and dog walker. Bob has been writing about personal finance for three years and now manages several personal finance sites, including The Frugal Fellow, Modest Money, and Blooming Wealth. You can also find him contributing to popular websites such as Yahoo! Finance, MSN Money, and GOBankingRates. You can see more of his work on Muck Rack and Contently, or connect with him on LinkedIn.