Buying a Trading System/Indicators

Discussion in 'Trading' started by SimpleMeLike, May 26, 2016.

  1. Simples

    Simples

    This is really like discussing wether the goose lays gold eggs or not.

    1. Trading is risky, can cost you more than you planned for and generally require much effort and mental energy. Selling products can leverage people skills, plus reducing costs and risks by dumping your trading risks unto your customers. In a funny way, selling trading systems is just another way to dump shit on the next greater fool, just as in ie. stock markets. Generally speaking, selling means you're trying to get rid of something in exchange for something more valuable..

    2. Instead of asking, why shouldn't people sell their successful trading system, ask why would they do it? It should be clear that the system is not a perfect money-machine, despite any claims, and that if you do not yourself compensate for its deficiencies, you are indeed relying on hope, blind luck and the self-sacrificing goodness of others. It may be comforting in the short run, but deluding oneself often leads to more pain later.

    3. One answer could be to get access to more capital faster, but if so, maybe this isn't such a successful get-rich-scheme as you may be expecting and dreaming of? Annual returns of 10% may be fantastic results to some, but not for your meager accounts, etc. So you need to consider your entire risk-profile. Then the chances drops that an off-the-shelf solution can provide what you seek. Besides alot of education is required just to become a proficient customer of such types of products and services.

    If I were a potential buyer, I would look for continuous accountability, services, regular maintenance, draw down guarantees, full expectancy from back- and forward testing, performance profiles/history and strategy documentation. The requirements would be so long and harsh that the cost would most likely not meet my account size. Any possibility for magical profitability would simply evaporate. So this exercise would in the end be less interesting than just buying a simple and automatic index fund. IOW, getting someone to prove their edge profitable above and beyond expected future market value, is probably more costly than the funds you have available, and just simply very improbable.

    It's very easy to find convincing examples why any system, even random ones, works so well, by careful hindsight selections. Association and pattern matching is fundamental to our brain functions, so is addictive and natural. What gurus and system-sellers rarely mention, is how many times those systems fail when applied to real world trading conditions and how to overcome this. Also they fail to mention how hard it can sometimes be to get proper fills and all the things that may go wrong during execution. It's like they do not possess rudementary trading knowledge, or just fail to mention such complications. Probably because unsexy stuff doesn't sell as well, or they really do lack practical trading experience. When applicable, these people don't really have your interest at heart at all, even despite the best of intentions!

    So they may sell you what they say they sell you, but actually, what you really need is something else and much more than they are willing and capable of providing. Of course you don't know this until you become more educated and experienced in trading. And that, is really core to their business model, knowingly or not!

    There is a golden goose. For most of us though, it's not in the financial realm and, by purpose and design, never will be. Don't neglect your goose though! :p;)
     
    Last edited: May 31, 2016
    #41     May 31, 2016
    Xela likes this.