Cool Trader Pro Review: Robotic Stock Trading?
Cool Trader Pro was launched early January 2012 and is based in the US state of Florida.
For some reason the provided Cool Trader Pro corporate address in Florida appears to be rented virtual office space. In the company’s FAQ videos, reference is made to a “company headquarters” being located in Scottsdale, Arizona.
Heading up the company are co-founders Edward Barsano (founder), Cary Flanders (CEO), Sunil Wadhwa (President) and Nick Rausch (COO).
Edward Barsano is the creator of the software suite Cool Trader, which the Cool Trader Pro opportunity revolves around.
Cary Flanders appears to have a stock market and loan industry background:
Prior to CoolTraderPro , Mr.Cary Flanders is the Co-Managing Partner of Robotic Trading Systems LLC., where he is responsible for day to day operations and the development of Automated Capital Systems Hedge Fund.
Prior to Robotic Trading Systems, Inc. he was a partner in Help Arizona Realty where he oversaw the day to day operations of the buy, rehab and resell of short sale negotiated homes for Real Estate Investors.
Prior to Help Arizona Realty he was a branch owner of Great Southwest Mortgage (“GSM”), a residential loan origination office. In his tenure with GSM his branch closed and funded over $500,000,000 in residential loans over a 7 year period.
Nick Rausch also has a background in finance and robotic trading,
Nick Rausch is co-founder and managing member of Automated Capital Systems a private hedge fund located in Palm Beach, Florida General Partner and the Investment Advisor.
He has also served as a co-managing partner of Robotic Trading Systems, LLC (“RTS”) since April 2011.
Leaving Sunil Wadhwa to bring the MLM component to Cool Trader Pro, with a purported 25 year history in the MLM industry. In researching Wadwha’s MLM history, I’ve seen his name tied to Prepaid Legal, Amega Global, Bidify and the Trump Network.
Read on for a full review of the Cool Trader Pro MLM business opportunity.
The Cool Trader Pro Product Line
The Cool Trader Pro MLM opportunity revolves around the sale of subscription for the Cool Trade software suite.
Cool Trade is owned by “CoolTrade Inc”, of which Cool Trader Pro founder Edward Barsano is the CEO and President of.
The simplest way to map out this relationship is to consider Cool Trader Pro to be a marketing division of CoolTrade Inc, who also own the Cool Trade software.
As for the Cool Trade software itself, it’s marketed as a “fully automated trading” software suite. Here’s how Cool Trade is described on the official company website:
The automated trader starts by itself in the morning, picks the stocks (based on your rules) and loads them into your watchlist.
Using patent-pending technology, it then monitors the market and your trades, adding and removing shares as needed to scalp profits 100% on its own.
Not being a finance guy I can’t really comment on the viability of Cool Trade but it has been around since 2005, with the company claiming to count “thousands of traders in 35 countries” as subscribers.
I do note in the company FAQ that they state unless you have $25,000 or more in your trading account, you are limited to 3 “round-trip” trades (buying and selling stocks in a single day) in any five-day rolling period (SEC rules). How severely this impacts the profitability of Cool Trade subscribers I’m not sure, but it sounds pretty restricted (unless you have over $25,000 to play with).
Subscriptions to Cool Trade are sold via the Cool Trade website for $3990 USD a year.
Via the Cool Trader Pro MLM opportunity, Cool Trade software subscriptions are $3500 for the first year and $125 a month thereafter.
The Cool Trader Pro Compensation Plan
The basic premise behind the Cool Trader Pro compensation plan is that each sale of the Cool Trade software generates $1500 in commissions, either paid out directly to the affiliate that makes the sale or split amongst them and their upline.
Before we get into that though we’ll start off with the commission qualification requirements of the opportunity.
All Cool Trader Pro affiliates must pass up the commissions of their first three sales, or two sales if they purchase a subscription to the Cool Trade software suite.
This effectively means that Cool Trader Pro are using a 3up MLM compensation structure (the commissions on the first three sales are passed up and is required before an affiliate can earn commissions).
After a Cool Trader Pro affiliate has qualified for commissions, they are then paid out according to membership rank:
- Associate – $500
- Senior Associate – $1000
- Director – $1100
- Senior Director – $1200
- National Director – $1300
- Executive Director – $1400
- Vice-Presidential Director – $1450
- Presidential Director – $1500
Qualification for these membership ranks is determined via the use of a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of the structure with each personally recruited affiliate placed directly under them (level 1):
Each of these personally recruited affiliates forms a new “leg” and theoretically there are no limitations to how wide a unilevel compensation structure can be (how many new affiliates are recruited).
If any of the affiliate’s level 1 recruits go on to recruit new affiliates of their own they form level 2 of the original affiliate’s unilevel team. If any level 2 affiliates recruit new affiliates they form level 3 and so on and so forth.
Using this structure, Cool Trader Pro ranks its affiliates according to the following qualification criteria:
- Associate – join Cool Trader Pro as an affiliate for $149
- Senior Associate – make 2 personal subscription sales
- Director – make 4 personal subscription sales and count one from your downline, or make at least 2 personal subscription sales and count 10 sales from your downline (no more than 60% of counted sales can come from any one unilevel leg)
- Senior Director – make 6 personal subscription sales and count 4 from your downline, or make at least 3 personal subscription sales and count 20 sales from your downline
- National Director – make 9 personal subscription sales and count 6 from your downline, or make at least 3 personal subscription sales and count 30 sales from your downline
- Executive Director – make 12 personal subscription sales and count 13 from your downline, or make at least 3 personal subscription sales and count 50 sales from your downline
- Vice-Presidential Director – make 15 personal subscription sales and count 20 from your downline, or make at least 3 personal subscription sales and count 70 sales from your downline
- Presidential Director – make 18 personal subscription sales and count 32 from your downline, or make at least 3 personal subscription sales and count 100 sales from your downline
Director Fast Track
Cool Trader Pro affiliates are able to “fast track” their way to the Director membership rank by making three Cool Trade subscription sales within their first 30 days of joining the company as an affiliate.
Presidential Director Fast Track
Cool Trader Pro affiliates are able to “fast track” their way to the Presidential Director membership rank by either
- making 12 personal subscription sales and counting an additional 23 from their downline within 90 days of joining the company as an affiliate or
- having 3 unilevel downline legs (3 personally recruited associates) that have generated a combined total of 70 subscription sales (no more than 40% counted from any one leg) within 90 days of joining the company as an affiliate
As mentioned earlier, each Cool Trade subscription sales made by a Cool Trader Pro affiliate generates a $1500 commission, even if the affiliate making the sale is not ranked to earn the full commission.
In these instances, the remaining commission is passed up to the affiliate’s upline.
As per the commission payouts above, the way this works is that the affiliate making the sale is paid at their commission level. Then the system searches their upline for a higher ranked affiliate and once found, they are then paid the remaining difference according to their membership rank.
If this found affiliate is not a Presidential Director paid out the difference between the affiliate making the sale’s commission and the $1500 total commission, the system then searches again for a higher ranked affiliate until eventually a Presidential Associate is found and the entire $1500 is paid out.
Eg. If a Director sells a Cool Trade subscription they earn $1100. If their immediate upline was a Presidential Associate they’d be paid the remaining $400 difference.
If their remaining upline was only a Senior Director, they’d be paid only $100 (the difference between $1100 (Director subscription commission rate) and $1200 (Senior Director subscription commission rate)).
The system would then continue to search for a higher ranked upline to distribute the remaining $300 commission left and would do so until a Presidential Associate was found.
This might happen directly if the upline of the Senior Director is Presidential Associate ranked or incrementally until a Presidential Associate is eventually found.
Cool Train Bonus
The Cool Train Bonus is paid out to the immediate upline (the affiliate who recruited them) of any affiliate who makes their first three pass up sales.
The Cool Train Bonus is paid out irrespective of whether the immediate upline is qualified for overrides and is paid out at $250 if the upline has a Cool Trade software subscription and $125 if they don’t.
Cool Code Bonus
The Cool Code Bonus is an additional commission paid out on the passed up sales of a new Cool Trader Pro affiliate.
To qualify for the Cool Code Bonus Cool Trader Pro affiliates must recruit 2 new affiliates who have reached the Senior Associate membership rank (passed up three subscription sales commissions).
The Cool Code Bonus is paid out as follows:
- Senior Associate – $100
- Director – $125
- Senior Director – $150
- National Director – $175
- Executive Director – $200
- Vice-Presidential Director – $225
- Presidential Director – $250
Presidential Director Generation Bonus
The Presidential Director Generation Bonus is a $300 bonus paid out on each Cool Trade software subscription sale made by Cool Trader Pro affiliates.
A “generation” within the bonus is defined as the sourcing of a Presidential Director within an individual unilevel leg.
Eg. As a Cool Trader Pro affiliate, the affiliates found after the first ranked Presidential Associate in any one of your unilevel legs are defined as your first generation. The affiliates between this Presidential Associate and the next are defined as the second generation and so on and so forth.
Using this system, any sales made by affiliates in these generations (up to six) pay out a commission as follows:
- 1st generation = $100
- 2nd to 4th generation = $50
- 5th and 6th generations = $25
Joining Cool Trader Pro
The affiliate joining fees for Cool Trader Pro are not mentioned anywhere on the website at the time of publication.
Further research however reveals Cool Trader Pro affiliates advertising the affiliate joining cost at $149 upfront and then $29.95 a month thereafter.
Update 28th February 2014 – Cool Trader Pro still do not disclose the cost of affiliate membership on their website, however further research reveals it to now be free to join and then $19.95 a month.
First and foremost I’m going to clarify that I’m no stock or finance expert and my knowledge in this area is extremely limited. With that in mind I can’t comment on the usefulness of the Cool Trade software itself, other than noting it’s been around for a while and appears to have enjoyed moderate sales success prior to the creation of Cool Trader Pro.
Looking at the Cool Trader Pro opportunity from an MLM business point of view, several potential issues arise.
First and foremost is the marketing strategy used by affiliates and the greater effect this might have on Cool Trader Pro in the long-term. Despite the claims in the Cool Trader Pro FAQ that they “are not responsible” for any claims their affiliates make yada yada yada, the simple fact of the matter is that as far as the authorities go, they are.
All MLM companies are responsible for the conduct of their affiliates and time and “we can’t control what our affiliates say or do” defense has, to the best of my knowledge, never held up.
Why is this a potential issue?
If we look at what the Cool Trade software actually does and how the company itself markets it, there’s a huge potential for advertising the merits of the software on projected profit returns via use of the software.
Here’s a snippet from Cool Trader Pro themselves, spruiking an affiliate promotion during prelaunch (late 2011):
Rarely, if ever, does a technology come along with the possibility to immediately impact your financial future.
We are now at that moment. And you are one of the fortunate few being extended an invitation to witness the future first hand!
Imagine going to Vegas knowing you are coming home a winner. Imagine knowing your football picks were winners every weekend.
Now imagine the most genius programmer, the technology guru behind Microsoft, who after retiring with millions, spent the next 12 years dedicated personally to writing over 5 million lines of code to develop the most powerful program ever produced to help make you money.
Simply turn on your computer on Monday morning and begin to change your financial future!
And you don’t even have to be there! It does it all for you. A fully automated, robotic, money machine.
An “automated robotic money machine” you say? Despite not being explicit in guaranteeing an income or ROI, the tone and intended attraction of the marketing pitch is obvious.
Infact I even found at least two Cool Trader Pro affiliates publicly making the following claims
- Cool Trader Pro is a Stock Trading Robot that has been averaging about 5-10% each month for the past 7 yrs
- (Cool Trade) averages 5-10%/month, sometimes more if extreme volatility occurs…can trade both buy and sell sides
- Made 20% profit in 20 minutes on Flash Crash Day!
- The Power of the Cool Trade Pro Software is to Deliver Risk-Free Automated Performance on ANY of SIX Major Stock Markets While Yielding Consistent Returns of 5-10% Monthly
These claims were made in early December and are still publicly viewable today, despite Cool Trader Pro claiming to have a “compliance department”. Of importance is the fact that these claims aren’t being used to market the software subscription but rather the Cool Trader Pro MLM income opportunity itself.
With Cool Trader Pro affiliates running around the internet marketing the ROI potential of the Cool Trade software to attract new affiliates, when combined with the Cool Trader Pro compensation plan there’s a huge potential red flag as Cool Trader Pro affiliates are paid out on the subscription sale to newly recruited Cool Trader Pro affiliates.
One of the big challenges Cool Trader Pro are going to face is going to be maintaining a healthy affiliate/retail customer (non-affiliate Cool Trade software user) ratio.
With both the company itself and affiliates heavily marketing the ROI and income potential of the Cool Trade software, and the fact that affiliates earning commissions on the sale of the software to new affiliate recruits only heightens the probability that Cool Trader Pro is going to be mostly made up of affiliate software subscribers.
Along with these internal consumption issues, income projections, quoted ROI figures and guarantees are also big red flags.
Marketing aside, the My Trader Pro compensation plan also actively encourages affiliates to buy a software subscription themselves. Without a subscription new affiliates are looking at passing up three sales commissions (to either newly recruit affiliates or customers) before they can earn anything.
With the purchase of a subscription sale themselves though, affiliates drop this pass up to just two sales.
Furthermore the “Cool Train Bonus” is inexplicably halved if affiliates themselves do not themselves purchase a Cool Trade software subscription.
I can’t see any reason for this (three sales is three sales right?) other than to incentivize Cool Trader Pro affiliates to buy a Cool Trade subscription themselves.
I think the bigger problem here is that without an attached MLM opportunity, it’s easy to sell the Cool Trade software on the merits of being an automated stock trading tool.
Add an MLM income opportunity that pays out $1500 a pop on the sale of the software, regardless of whether your selling to retail customers or recruited affiliates and how the software tool is marketed becomes much more important.
To be honest I don’t really see how this sort of software could be marketed other than on the merits of its income potential and tracked past performance, which is a problem in itself. Not to mention the fact that if a new affiliate is sold on projected incomes, ROI and guarantees and then actually loses money – that introduces an entirely different set of issues again.
Are Cool Trader Pro affiliates going to be able to resist selling the income opportunity on the basis of projected ROIs and income via the Cool Trade software?
Current research and perusal of Cool Trader Pro affiliate marketing blogs and sales capture pages suggests “no”.
The potential for legitimacy is there in ultimately how many affiliate subscribers vs. retail subscribers Cool Trader Pro affiliates attract, but for now I’d be thinking long and hard about getting involved with the My Trader Pro MLM opportunity at an affiliate level.
Update 20th October 2017 – On October 6th Cool Trade Inc., of which Cool Trader Pro was the MLM marketing division of, filed for Chapter 11 bankruptcy.