How much does a profitable method or strategy costs?

Discussion in 'Trading' started by PsychoTrader, Oct 31, 2007.

  1. Hi everybody

    Suppose I neither want to sell nor buy such a trading system. Just want to know how much a profitable method or strategy costs.
  2. Frankly speaking I am convincing someone to buy his trading system but we have no idea about the price.

    Now maybe someone help
  3. I would say a percentage of the gains

  4. IluvVol


    How much? Very easy. The discounted value of the expected future cash flows - profit margin. If it was more expensive you would not make money, if it was cheaper you would have an unfair gain. And by empirical evidence, system sellers are losers in the markets and cheaters when marketing their systems so the chance is higher you end up with less value rather than more, compared to what you invested in.

    According to this, most of the "systems" out there should be for free. ;-)
  5. But the gains relate to lot size which is different for everybody
  6. Profitable method is worth nothing without a profitable trader to apply it to markets.
  7. This guy isn't a system seller. I know him somehow and as I told you before I'm trying to convince him to sell his system to me. He is a very profitable Forex trader .
  8. Marketplaces provide a service known as price discovery to answer the question "what is the correct price".

    You might bid $ 5. If that bid is not accepted then bid $ 10. If that bid is not accepted then bid $ 15. If that bid is not accepted then bid $ 20. Keep raising the bid until you feel the item is overpriced or you do not have enough money to purchase. If there is no trading then quit and repeat the process later.

    The method seems to work well for trading crude oil futures, silver futures, corn futures, stocks, bonds, currencies, so maybe it works for trading systems too.

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    I think open outcry and colored jackets are optional in this case.
  9. Yes but it could be interesting for him to have percentage of your gains : this way he will diversify his risk because he will not take your losses (zero risk for him on your part)
    It depends on your initial capital but that could interest him ...

  10. I think most of traders are not profitable just because they don't have a profitable method make them to trust on.
    This is why they interfere and break the discipline.
    #10     Oct 31, 2007