reveal your strategy?

Discussion in 'Strategy Development' started by elit, Nov 6, 2006.

  1. elit



    No just kidding!

    I have never really understood why you shouldn't reveal your strategy, because then other traders could exploit it, or trade it themselves, and you would thereby lose your "edge"? How?

    I understand that if you found a real "holy grail" that would always make money - no matter what - then you would probably do best in keeping it a secret.

    But say you have a pretty good strategy, that makes nice profits that lets you buy your ferrari etc. it's not the real holy grail but it makes you good money. If you shared your strategy on the internet, what would happen really?

    There are tens or hundreds of thousands of securities one could trade, and millions of traders/investors with different strategies, based on everything from hundreds of TA methods, to Fundamental analysis, to dartboards, to hunches, to wives, to pure stupidity and so on. Would it really matter if a number of traders would see yours?

    Of course I'm hesitant to enclose my own strategies, but I rather think this is something I've been told not to do, ever....

    For the record, this is not a thread where I beg to get your strategies, rather to understand this phenomena.
  2. Best you get the ball rolling then
  3. elit


    Like I said, it is not a thread to hear your strategies but to understand why you should give it out.

    Like I also said, I'm hesitant because I've always heared you should never give your strategy to others. I have never gotten an explanation why.

    There, it's rolling again...
  4. Some of the reasons a trader might give out their system are:

    1. It doesn't matter, it's based on commonly known information, not proprietary info.

    2. It has an expectation of less than 50% wins ... many trending following systems are also common known, they also have an expectation of less than 50% and required good money management to actually succeed.

    3. He/She has developed a superior system, and no longer trade their old system.

    Now, just reverse the above listed examples and you would see why a trader would not give out their system.


  5. It's pretty simple actually. Some strategies and markets can only handle so much volume. ER2 is one of the them from my experience. If enough people know what an individual is doing then you won't be able to get filled at your price. Make sense? Also some one with a bigger account would know where you would buy, know your stop and may just wait to pounce on you, fading every trade you do and busting your stops to get a runner. #1 is much more likely than #2.
  6. Hello elit

    I have seen traders share their strategies when approached in the right way. I don't think it happens often but there are examples. Knowing that this is true I have to suggest the following;

    You may want to prepare yourself for the possibility that on an individual basis, people find you to be an irritating little bastard and therefore do not want to reveal their strategies to you.

    I am so glad you kept the ball rolling.

  7. elit


    Again, I was not looking for any strategy here.

    I'm sorry and apologize if you or anybody else find me irritating. If you could please be so kind to point out what I do that is irritating, so I can improve my behavior. I might sometimes may express myself in a little strange way, but that is because I'm not native in english and sometimes don't find the right words.

    I also like to ask questions. They may be irritating and silly for some of you, but for me they are part of learning. I assume everyone here have some point in time been a beginner or newbie, sorry if you resent beginners now that you are elite.
  8. elit


    Thanks JJ.

    I would presume that most traders use "commonly known information", if they don't develop their own indicators. But how you combine indicators, interpret them and use them in action will naturally differ.
  9. elit


    Yes, I understand that those are good enough reasons. However I presume that liquid markets, say nasdaq 100 or DJ30 have so much liquidity that if I tell people of my strategy where I buy when price closes above a 30 day MA it wouldn't matter that much.

    I have also heard that TA is self-fulfilling prophecy, that it only works because so many traders use it. :confused:
  10. Well as regards your reply.

    First you did not read the comment carefully.

    I did not say that I found you irritating. What I did say was that you should be prepared for the possibility that others find you to be an "irritating little bastard" (my edit).

    Before that I said that I have seen traders reveal their strategies if approached correctly.

    One gets the impression that you live in a bubble somewhere on the face of the earth, and that you have not had much contact with humanity..If you really want to understand "why" I suggest you move to or just visit New York City, and pose this same question to passersby on the sidewalk, at one of the local bars, or at a police station. I am sure that the friendly and helpful citizens of New York City would be glad to discuss this with you until the sun vaporizes.

    All the best

    #10     Nov 6, 2006