I am happy to report that we are making great progress with The Mad Day Trader, rapidly evolving the service to best meet the needs of the professional trader. We have already closed huge winners in soybeans (SM), the iPath Dow Jones AIG Grains Total Return Index ETF (JJG), and short Treasury bond (TBT).

It is not easy for me to translate "traderese" in plain English, but the readers say it's worth the effort. As of today, trader Jim Parker will be posting his open positions on the website, which will be updated daily. We have temporary parked them under the Global Trading Dispatch menu tab under "POSITIONS" (just click here). Things will migrate further once we refine the product.

While the Global Trading Dispatch focuses on investment over a one week to six-month time frame, Mad Day Trader will exploit moneymaking opportunities over a ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.

Mad Day Trader uses a dozen proprietary short-term technical and momentum indicators to generate buy and sell signals. These will be sent to you by text message and email for immediate execution. During normal trading conditions, you should receive three to five alerts a day.

As with our existing service, you will receive ticker symbols, entry and exit points, targets, stop losses, and regular real time updates. At the end of each day, a separate short-term model portfolio will be sent to you and posted on the website.

The new service will generate long and short-selling signals for a range of widely traded exchange traded funds (ETF's). These include stock indexes (SPY), bonds (TLT), (TBT), foreign exchange (FXY), (FXE), (FXA), commodities (CU), (CORN), energy (USO), (UNG), and precious metals (GLD), (SLV). There is also a special focus on the leading hot stocks of the day. This will be followed up with a series of educational webinars that will be an important resource for the serious trader.

The Mad Day Trader service will be provided out of Chicago by my old friend and industry veteran, Jim Parker. Jim is a 40-year veteran of the financial markets and has long made a living as an independent trader in the pits at the Chicago Mercantile Exchange. He has worked his way up from a junior floor runner, to advisor to some of the world's largest hedge funds. We are lucky to have him on our team and gain access to his experience, knowledge, and expertise.

I have been following his alerts for the past five years, and his market timing has become an important part of the "unfair advantage" that I provide readers. The time has finally come to offer Mad Day Trader as a stand-alone product.

A trading service with this degree of success and sophistication normally costs $20,000 a year. As a client of The Mad Hedge Fund Trader, you can purchase Mad Day Trader alone for $2,000 per year or $699 per quarter. Or you can buy it as a package together with Global Trading Dispatch, which we call Global Trading Dispatch Pro, for $4,000 per year, a 20% discount to the full retail price. Give yourself the unfair advantage you always wanted and buy the combined package.

As part of the initial launch, I will send out Mad Day Trader free to all current paid subscribers of Global Trading Dispatch until June 21st. That will give you the opportunity to decide if the new service can enhance your trading performance. When the free service expires, we will send you a link to purchase a full subscription. There will be no automatic billing of current subscribers.

Part of the deal is that I want to hear from you on how we can improve Mad Day Trader to make it more user friendly and coherent to better meet your needs. Sometimes, a couple of old warhorses like us forget how much our specialized language is incomprehensible to the outside world. Just send us an email with suggestions to support@madhedgefundtrader.com.

Much of the recent buying of stocks has been generated by hedge funds panicking to cover shorts. Convinced of the imminent collapse of Europe, the impotence of governments to do anything about it, and slow economic growth at home, many managers were running a maximum short for the umpteenth time, and were forced to cover at a loss. Meet the new dumb money: hedge funds.

When I first started on Wall Street in the seventies, you heard a lot about the ?dumb money.? This was a referral to the low-end retail investors who bought the research, hook-line-and-sinker, loyally subscribed to every IPO, religiously bought every top, and sold every bottom.

Needless to say, such clients didn?t survive very long, and retail stock brokerage evolved into a volume business, endlessly seeking to replace outgoing suckers with new ones. When one asked ?Where are the customers? yachts,? everyone in the industry new the grim answer.

Since the popping of the dot-com boom in 2000, the individual investor has finally started to smarten up. They bailed en masse from equities, seeking to plow their fortunes into real estate, which everyone knew never went down. Since 2007, the exit from equities has accelerated.

I bet the average individual investor is outperforming the average hedge fund in 2013 by a large margin. Look no further than the chart below, which shows and average return by hedge funds, compared to and S&P 500 index gain of 16%.

This takes me back to the Golden Age of hedge funds during the 1980?s. For a start, you could count the number of active funds on your fingers and toes, and we all knew each other. The usual suspects included the owl like Soros, the bombastic Robertson, steely cool Tudor-Jones, the nefarious Bacon, the complicated Steinhart, of course, myself, and a handful of others.

The traditional Wall Street establishment viewed us as outlaws, and believed that if the trades we were doing weren?t illegal, they should be, like short selling. Investigations and audits were a daily fact of life. It wasn?t easy being green. I believe that Steinhart was under investigation during his entire 40 year career, but the Feds never brought a case.

It was all worth it, because in those days, if you did copious research and engaged in enough out of the box thinking, you could bring in enormous profits with almost no risk. I used to call these ?free money? trades. To be taken seriously as a manager by the small community of hedge fund investors you had to earn 40% a year or you weren?t worth the perceived risk. Annual gains of 100% were not unheard of.

Let me give you an example. In 1989, you could buy a leveraged warrant on a Japanese stock near parity, for $100, that gave you the right to own $500 worth of stock. You bought the warrant and sold short the underlying stock. Overnight yen yields then were at 6%, so 500% X 6% = 30% a year, your risk free return.

Most Japanese stock dividends were near zero then, so the cost of borrowing was almost nothing. The position effectively created a high yield synthetic convertible bond. If the stock then fell, you also made big money on your short stock position. This was not a bad portfolio to have in 1990, when the Nikkei stock index plunged from ?39,000 to ?20,000 in three months, and some individual shares dropped by 80%.

Trades like this were possible because only a smaller number of mathematicians and computer geeks, like me, were on the hunt, and collectively, we amounted to no more than a flea on an elephant?s back. Today, there are over 10,000 hedge funds managing $2.5 trillion, accounting for anywhere from 50% to 70% of the daily volume.

Many of the strategies now can only be executed by multimillion-dollar mainframe computers collocated next to the stock exchange floor. Winning or losing trades are often determined by the speed of light. And as the numbers have expanded exponentially from dozens to hundreds of thousands, the quality of the players has gone down dramatically, with copycats and ?wannabees? crowding the field.

The problem is that hedge funds are no longer peripheral to the market. They are the market, and therein lies the headache. How are you supposed to outperform the market when it means beating yourself? As a result, hedge fund managers have replaced the individual as the new ?dumb money?, buying tops and selling bottoms, only to cover at a loss, as we witnessed today.

When markets disintegrate into a few big hedge funds slugging it out against each other, no one makes any money. I saw this happen in Tokyo in the 1990?s, when hedge funds took over the bulk of trading. Volumes shrank to a shadow of their former selves.

How does this end? We have already seen the outcome; that investors flee markets run by hedge funds and migrate to those where they have less of an impact. That explains the meteoric rise of trading volumes of other assets classes, like bonds and foreign exchange.

How About 2% and 20%?