Mindful Trader is a data-driven swing trading platform that provides stock and option picks with the goal of generating long-term wealth.
Quick Summary:
Mindful Trader is a swing trading platform that provides subscribers with stock and options trades. The platform was built using a proprietary statistical algorithm that was back-tested using over 20 years of market data.
Overall Rating:
Tools & Features:
Ease of Use:
Price:
PROS
- Skin-in-the-game
- Simplicity
- Fast Communication
- Tells you upfront when to exit trades
CONS
- No integrated alert system
- Pricey
- No chatrooms/broker integration
Price:
$47/mo
Features:
Backtested quantitative stock and option picks
Stock and Options Education
Daily trading commentary
Mobile App:
No
Current Promotions:
None listed
What is Mindful Trader?
Mindful Trader is a stock and option-picking alert service focusing on swing trading. Swing trading is a trading style that generates profits from small to medium price movement over a short period – typically a week or less.
Mindful Trader was built on the premise that using rigorously back-tested statistical strategies can generate wealth through stocks, options, and futures trading.
The platform was founded and built in 2020 by Eric Ferguson, who has over 20 years of stock trading experience. He spent over 4 years and $200,000 of his own money developing the statistical tools used by Mindful Trader. He has a degree in Economics from Stanford University – his pedigree is legit.
How Does Mindful Trader Work?
Mindful Trader is a stock and option-picking alert service focusing on swing trading. The deployed trading strategy is based on a proprietary quantitative strategy developed by Eric using 20 years of backtesting. Without getting too specific, Eric employs an array of rigorous statistical tests to identify stocks, options, and futures that meet his investing criteria.
As a paid subscriber, you will get real-time access to all of Eric’s positions so you can follow along, including when he enters and exits his positions.
Unlike day trading services, which require you to be glued to your computer, Swing Trading provides more flexibility to take advantage of stock picks. And like most people who have busy lives, the flexibility swing trading provides is unrivaled.
One helpful feature not available in many other stock picking services is that you will know the exit parameters up-front. Other stock picking platforms often tell you the entry point – but will only notify you when you are exiting the position – increasing the opportunity for errors and unnecessary stress.
At $47 a month, subscribers get access to all of Eric’s trades, plus educational resources about stock and option trading.
I really like that Eric emphasizes that using the Mindful Trader platform is not a get-rich-quick scheme, and you should probably practice with paper trading before executing using real capital.
How Do The Trade Alerts Work?
Below is a theoretical of how a trade may play out using Mindful Trader.
- A Stock is Watchlisted: Before a trade is executed, most stocks start on Eric’s watchlist, which are positions that are close to their entry point. The watchlist includes: the watch date, ticker symbol, potential entry price, profit target, and stop loss.
- Trade is executed: Once a trade is executed, it is added to the Main Account page, as seen below. The site has no direct alert features, but you can set up alert features through third-party apps like Watchete.
- Holding Period: Swing Trades are typically held for a week or less.
- Sells: Once a trade reaches its profit target or stop loss, the position is closed out, and P&L is generated.
The process is fairly straightforward, but you need to get comfortable to ensure you are following the alerts properly.
Upon reviewing the trade activity, most of the positions are long trades, and he appears not to have taken a short position since 2021. Furthermore, most of the options trades appear to be call options, with no put options or advanced options strategies.
Who Should Use Mindful Trader?
Mindful Trader is GOOD For:
Swing Traders: If you’re a swing trader – Eric is your guy. I’m not aware of anything other swing trading services available.
Data-Driven Traders: This stock alert platform could benefit you if you like Eric’s analytical investing approach.
Mindful Trader is Not Good For:
Long-term Investors: Given the short nature of the trades, it is not good for long-term investors. You are likely better off with a buy-and-hold strategy.
Risk-averse Investors: Swing Trading is a risky strategy, plain and simple. Mindful Trader is not right for you if you cannot stomach the downs.
There are 8 key components to Eric’s trading strategy that, when combined together, create a cohesive trading strategy that aims to give subscribers a statistical trading edge.
Trading Strategy Explained
Many of the techniques described below are common statistical approaches used by professional traders (at banks and hedge funds). However, they often have teams of people crunching the numbers. It’s pretty impressive that this was created by one person.
Raw Edge: This means that the back-tested strategy must work regardless of the specific criteria used, such as a profit target of 3.6%. P.S. He could probably think of a better adjective to describe this.
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.
Monte Carlo Simulation: The Monte Carlo Simulation Eric runs performs 10,000 different random variations of the ordering of the transaction profit results from the backtests.
Statistical Correlation tests: The service conducts statistical correlation tests to ensure that individual strategies within the portfolio are not too closely correlated. This process diversifies the portfolio and shields it 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 the expected parameters.
Account for 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.
Sharpe Ratio: Eric checks the Sharpe ratio of the backtested returns of his portfolio of strategies over time. This ratio indicates how consistent the returns could have been by comparing the annual rate of return to the standard deviation of those rates of return. The smoother the distribution, the better.
For example, The Sharpe Ratio is looking for consistent profitability, not 11 months of negative returns and 1 month of positive returns.
Daily Trading Commentary
Subscribers also get access to daily trading commentary provided by Eric. You can also view past commentary on the Mindful Trader website.
Erice provides a high-level update on the markets and provides color around his positions, including any newly closed or open positions. As a subscriber, this commentary helps me keep a pulse on the market and review Eric’s trading positions.
Educational Resources
Mindful trader subscribers also have access to stock and options education developed by Eric. Most of the educational resources are YouTube videos, which are technically available for free. I have watched a few of his basic options videos, and they are fairly easy to follow and not too long.
Mindful Trader educational resources include:
- Stock and Option Videos
- Options Calculator
- Resources about Eric’s Stock Strategy
Returns
Understanding the returns can be kind of tricky. But Eric posts returns across 3 different accounts.
Mindful Trader has 3 types of accounts: 1. Main Account – which is primarily stock trades with some options trades, 2. Options Account – This account is dedicated to options trading. This account might have more potential risk and reward than the Main Account, 3. Double Down Account.
Eric is transparent when it comes to his returns. He doesn’t only highlight the accounts with “good” returns, but also highlights accounts with lower returns. Eric highlights the risk involved in his strategies, and I certainly appreciate his transparency – he quickly points out that this is not a get-rich-quick scheme.
Options Account Returns: -8.2% Since May 2021. All of the options trades are swing trades. Eric lists all the options trades, including ticker, date closed, exit price, and profit. As you can see in the image below, the performance is extremely volatile, and less than stellar. At one point, the returns were as low as -50% and as high as +17%.
Double Down Account Returns -4.1% since inception. The Double Down account shows all the positions, too. This account has stocks and options. The account has a lower trade volume but a larger back-tested edge. As you can see below, the double-down account has had some success, touting returns as high as nearly +21.69% at one point. Like the Options Account, there is also extreme volatility in the performance of this strategy.
Main Account Returns: -48.2% since April 2023 (inception) comprised of equity, options, and futures trades. Not great returns, but it’s a risky strategy. It’s not an apples-to-apples comparison, but during that same time period, the S&P 500 returned 0.82%, according to Y Charts. Furthermore, if you are a subscriber, you view every trade Eric has made since inception.
Eric does note some general commentary about his performance, but it seems quite outdated (from 2021).
User Experience
Signing up for Mindful Trader was an easy experience, and I could sign up in a few moments. You can use a PayPal account or credit card.
Once you’re signed up, you can immediately access all of Eric’s trading data and strategy.
The website is simple. However, the website user interface feels quite outdated – serious 2009 vibes. But Eric’s a math guy, not a website designer – so I can’t knock him for that.
One drawback I noticed is that you cannot download the historical data into an Excel spreadsheet – again, not a huge deal – but most stock-picking sites offer that functionality. They could find the lack of functionality slightly annoying. Additionally, there is no chatroom functionality to talk shop with other subscribers – again, a feature many other stock-picking platforms provide.
On a positive note, Eric is transparent and provides details for every trade made since inception, including the details.
I also found navigating between the 3 types of accounts confusing, but maybe that’s because I am new to the platform.
PROs and CONs Explained
Let’s look at the PROs and CONs of Mindful Trader to help you decide if this platform is right for you.
PROS
Skin-in-the-Game: Eric trades with his own money – he has skin-in-the-game. There’s no theoretical portfolio like some other stock-picking services.
Transparency: Eric has winners and is not shy about his losers. He doesn’t claim subscribing to his service will make you a millionaire in 30 days.
Fast Communication: If you send Eric a message, he’ll reply to you very quickly. I sent an email, and he replied within 24 hours. That’s quick for a one-man shop. See below:
CONS
Price: $47 per month isn’t cheap.
No Integrated Alert System: Unlike other stock picking platforms, there is no integrated alert system to notify you of new trades. You will have to use a 3rd party app like Wachete.
No Chat Rooms: There’s no way to communicate with other subscribers to talk shop or discuss recent trades.
Price and Value
At $47 per month, Mindful Trader isn’t cheap, especially compared to some more established stock-picking services like Motley Fool. However, there is no long-term commitment – you can cancel anytime, no questions asked. There are no hidden fees, and there is one pricing tier, which doesn’t force you to make a decision about what the “best value” is.
- $47 per month includes: All Stock and Option Picks, Trading and Market commentary, and Stock and Option Tutorials.
- Month-to-Month contract
- Cancel Anytime
Best Alternatives
1. Motley Fool
- Why it Stands Out: The Motley Fool Stock Advisor shines with its specific stock recommendations, backed by detailed analysis and a strong track record of performance. This valuable feature aids investors of all levels to identify potential investment opportunities in the stock market. While Alpha Picks has had tremendous success, Motley Fool Stock Advisor has been around for many years, making spectacular bets on the largest tech stocks.
While Motley Fool isn’t a stock alert service like Mindful Trader, their returns are legit, so I thought it was worth noting. - Returns: +462% since inception
- Best For: Both novice and experienced investors who appreciate guidance on stock picks and investment strategies
- Pros: Provides specific stock recommendations, offers in-depth reports, and a solid track record of performance.
- Cons: Requires a subscription; not all recommended stocks may suit every investor.
- Price: $79/year
or read our complete Motley Fool Review.
2. Stock Market Guides
- Why it Stands Out: Stock Market Guides identifies stock and options trading opportunities that may have a historical track record of profitability.. Their trade alerts put the historical performance of each trade setup at your fingertips. Unlike MIndful Trader, this platform offers real-time alerts. However, they don’t actually trade their own money.
- Best For: Swing Traders looking for real-time trading alerts
- Pros: Real-time trading alerts, Pre and Post Market Hours alerts
- Cons: No skin-in-the-game, Stock, and Options Alerts require separate subscriptions, do not tell you when to exit trades
- Price: $49/month
- Current Promotions: None listed
The Bottom Line
The thing with these stock picking platforms is that traders and investors expect to see immediate results “I canceled after my 2nd month because I lost money.” Making or losing money in the market in 2 months is pretty much a coin flip, but I guess that’s the nature of the beast.
As the founder says, if you expect to become a millionaire overnight, you probably shouldn’t sign up for Mindful Trader. Most people probably sign up for a month or two, either make a little money or lose money – and then opine on whether the platform is worthwhile.
Based on what I have seen through my subscription, Eric is transparent and appears to be an honest guy. He thoroughly explains his trading strategy and highlights that they can certainly make money and lose money – which, in and of itself, says a lot about his stock alert platform and ethical tendencies.
If you’re into swing trading and can afford the $47/month subscription, why not give it a shot. But, if $47/mo is a lot of money for you, and you don’t have the capital to risk, you’re probably better off saving your money.
Frequently Asked Questions
What is Backtesting?
Backtesting is a finance concept to test how a trading strategy would have performed using historical data. By doing this, investors and traders can gauge the effectiveness of a strategy before applying it in real-world scenarios. This process helps identify potential risks and rewards, allowing for better-informed decision-making. Backtesting answers the question: “If I had applied this strategy in the past, how would it have turned out?”
What is Swing Trading?
Swing trading is a type of trading strategy aimed at capturing gains in a stock or other financial instrument over a period ranging from a few days to several weeks. This approach is based on the idea that short-term movements, driven by supply and demand dynamics, can be identified and leveraged for profit.
What’s The Difference between Swing Trading and Day Trading?
Swing Trading and Day Trading sound similar but are different trading strategies. Day Trading is when a position is held for less than a day, sometimes minutes. Swing Trading, meanwhile, is also a form of short-term trading, but positions are often held for a week to a few days.
Our Review Methodology
Investing in the right financial products is crucial for achieving your financial goals. That’s why our review methodology is designed to give you a comprehensive understanding of various investing platforms and tools. Here’s a breakdown of what we focus on:
Tools and Features
We dig deep into the suite of tools that each platform offers. Whether it’s automated investment features, tax optimization, or specialized charting tools, we evaluate how these features contribute to smarter investing decisions. We ask questions like:
- What is its main offering, and how does it compare to its peers?
- How effective are the risk assessment tools?
- Are there any value-added services like educational content?
Price and Value
Price matters, especially when it comes to investing, where every penny counts. We analyze:
- Subscription fees
- Hidden Charges
- Price compared to the overall value received
We’ll let you know if the platform gives you the most bang for your buck.
Ease of Use
User experience can make or break an investment platform. We assess:
- Interface Design – Is it intuitive and easy to use?
- Mobile app availability and functionality
- Customer Support – where applicable.
Nobody wants to navigate a clunky interface when dealing with their hard-earned money.
Stock Breakdown
Good investing is rooted in great research. We examine:
- The quality of stock analysis tools
- Returns on an absolute and comparative basis
- Availability of real-time data
- Depth of research
We check if the platform provides actionable insights to make informed decisions.
How We Do It
- Hands-On Testing: I signed up for Mindful Trader to provide real insight. This is how I give my unique perspective. We’re unlike some other sites where they simply rehash marketing materials.
- Customer Reviews: What are other users saying? We look at reviews and customer feedback to gauge public opinion.
- Comparative Analysis: Finally, we compare each platform against competitors regarding features, pricing, and user experience.
