Going public with a system ruins it?

Discussion in 'Trading' started by Martini, Feb 23, 2005.

  1. Martini


    I just read a review for a book on Amazon and a reviewer wrote:

    I've heard this several times before; is it true? It seems to me that contradicts something else I've frequently read, that being on the winning side of a trade is about being on the side of the bigger crowd. If more people were using your system, wouldn't you be making more money?
  2. Of course it's true !!
    it'S just basic stuff, market inefficiencies are quickly corrected when lot of people try to exploit them, it's the law of diminishing returns

    imagine you have a gold mine for yourself
    then, everybody knew about it and instead of one, 100k people were trying to get their gold at the same time....
    that's why quants get paid huge salaries..if they find only a small inneficiency that lasts a couple months....they've already amortized themselves for the rest of their careers
  3. cable


    Going public with a system ruins it?

    Take heart, it was probably worthless before it went public.
  4. No, it is not true. There are no secrets in the market.
  5. jbt


    Right on Random.
    I can give 10 people the same trading strategy and 9 of them will still lose money because its human nature to amend abridge and reinterpret.

    The value of listening to trading ideas from others is to expand your own creativity, not to lazily piggyback on another human beings intellectual capital.

    Truth number one as Random says is there are no secrets in teh market.

    Truth number two is there is no easy way to make money.

    Be my guest - enjoy my ideas, "the edge" will not dissappear if you do since it never existed in the 1st place :).

  6. I don't think its true because most people can't follow any instructions. The whole theory assumes you are going to have a crack team of quants competing with you. It is just not true, just like all the logical crap you learn in business school and later find out makes no sense.
  7. Why are so many people (supposedly traders, if not service providers) from various web sites or forums publicly promoting their (claimed to be very profitable) systems/ methods, expecting others to follow? :confused:
  8. I have conducted a few experiments with my own proprietary systems/indicators. I have published the code for them both on ET and Trade Station forums. The idea was to measure the impact of many people using them on to the system's profitability. After 4 months of testing both systems showed zero change in their performance. The first system was distributed to over 400 people and the second one was used by over 1000 people (probably more because we counted only registered users). The very reason for this experiment was similar to the question posted by the originator of this thread. So far we have concluded that at least limited use (1000 users) has no impact on the system's performance. I understand that this experiment is far from being comprehensive but it gave us an idea for some further research.
  9. It seems to me to be absolutely unimaginable that it's true. I think that the reviewer who thought this probably misunderstood _several_ fundamental things about the markets.
  10. Because they're not even confident enough in their own system to put their own money at risk on it... :D


    they are looking for some kind of social image, like it helps them to feel "important".
    #10     Feb 23, 2005