Discussion in 'Professional Trading' started by rcanfiel, Oct 31, 2007.
POLL: If not profitable yourself, what would you pay monthly for a reasonably profitable system?
Depends on how many signals it generates per month. Wouldn't spend a dime on a trade-a-month sys.
Another question might be: "If you have a system that works, why would you sell it for a couple hundred bucks a month vs. putting your assets and time into making $20K per month?" Just kidding, LOL.
But on a serious note:
The way our people pay for systems is either A) based only on profitable trades, or B)They buy complete automated programs that can be tweaked very easily as market conditions change. or C)They "rent" workable programs from developers by the month. Bear in mind B and C are not necessarily "systems" but more programming of workable strategies. A is also able to be tweaked by the user on a daily basis, and allows for automatic entry and exit, and/or auto entry and manual exit.
I would pay One-And-Ten.
A hedge fund or a CTA would charge me Two-And-Twenty. Some of that is a fee for access to their super miraculous wizardly strategies for trading, and some of it pays for the grunt work of data collection, system operation, order execution, back office accounting, and so forth. For simplicity assume the fees are evenly split between the strategies and the execution, voila. One-And-Ten.
However, if the price were One-And-Ten, I'd want some kind of strong evidence that the product has performed well in the past, before risking my money in the future. The same kind of evidence I'd want when investing with a hedge fund or a CTA: an audited, real-money track record.
That is a widely asked question, LOL or not
A lot of people wonder why anyone would sell signals to a system that works. From what I have seen, the predominate honest reasons seem to include:
1) Some people are programmers, more than traders/risktakers. Pulling in money for one's work is what they seek.
2) Some people like to teach. Trading can be a lonely profession, and having subscribers gives them a connection and/or satisfaction in assisting others.
3) For a relatively small trader, system lease fees are a nice diversification. Everyone has drawdowns at some point, and some system fees can be a counterbalance.
4) In very liquid markets, it is additional income, with little impact to ones own trading.
I suppose there are others, but that is what I remember from some conversations.
I am suprised by the results!
Currently I have a 8.4 ratio out of a 10 day average of profitability, yet it still amazes me the willingness to pay a high rate for a successful service. If there really is any!?!?!
I guess I am old school.
Just to clearify my daily $ ratio is based on hundreds not thousands of dollars.
I am not looking to get greedy rich so I set """my""" goal for an average of 1000 a day based on a 30 day average, of course sometimes I well exceed it and some times underperform...Yet I am positive every month so far.
The funny thing is that I 99.9% of the time don't ever hold a position over night even though I should. I personally just do it for my own self satisfaction of the current market uncertainy and to sleep well.
the question was "if you are not profitable yourself."
developing a profitable strategy is *not* the hard part. executing it consistently is.
i doubt anyone could have enough trust in a strategy they didn't develop and/or test themselves to stick with it during the inevitable rough patches.
That is a good observation. Some would blow up even with a really decent system
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