that's very interesting, care to give some examples of such systems? myself i've been developing (equity) systems for about 3 years, yet i cannot see much advantage in subsecond executions. in my systems, having instant quotes & executions would definitely improve the P/L, but the difference would be negligible. - jaan
Well, from my perspective, we are not premitted to discuss our systems because basically, they work and we don't want to jeapordize the revenue of our company. The returns are basically amazing. Some systems are simple, some are much more complex. The best systems work on a basic level with no curve fitting. Enhancements, when done well, only limit your risk. Risk is the most important element. Profits are only a small piece of the pie. As far a successful systems, I disagree with an earlier post on a board where someone said that a 50/50 system mean't that the system was a coin flip. The reality is that a system that is 40% winners and 60% loosers can be incredible, when your average win is say $500 and your average loss is $20. Combine that with many trades a day.
hmap1, This is my personal view about trading systems or mechanical systems. If I were using one and it has amazing profits. I would not start a forum thread on the subject nor reveal the fact that I was using such. Simply, if it's such a well kept secret via you saying..."we are not permitted" and "we don't want to jeapordize the revenue"... why would you want to reveal the fact that you have such a secret? I think all traders that are trading successfully for a living regardless if its via mechanical or discretionary feel they know something that the other guy/gal doesn't know... or they feel they know what the other guy/gal knows but their much more efficient than the other person...in reference to discretionary traders. With that said...if I had a successful mechanical system that was the life blood of the company I work at or the life blood of my family financial well-being... you'll never see me mentioning it here at EliteTrader nor at any other discussion boards. Now...if I was a retired trader and wanted to market a successful mechanical system knowing it will no longer affect me because I'm no longer putting money on trade positions...that's an entire different subject. By the way, are successful mechancial systems usually sold to someone or are they developed by someone at a company or by an individual...and it's never marketed? Also, if it's sold to a company or individual...would there be some legal contract that stated it can never be shared with someone else? If such legal contracts are not the norm...wouldn't mechanical systems of such be jeopardize in their reliability. Maybe someone with a lawyer background or corporate law could better answer such a question. I brought this up because a guy I know (software engineer) designed something for a networking company that will make them more efficient and save their clients millions. He quit over another unrelated issue...now works for another networking company and his previous employer is suing to prevent him from sharing what he knows with the new boss. My analogy is this...isn't it the norm to have legal agreements between system developers or users not to share such info with someone else because it will or could affect their profits? I apologize if I take this thread in another direction...couldn't resist. Nihaba Ashi
The reason people discuss these things in a public forum is because we are all searching for that "crumb" of information, that the other guy may consider insignificant; and we are bored.
Exactly, and also, it's good to get a feel for what's out there. It's just part of the overall business plan. I see what's out there from inside analysis, but it's just always good to fish in a public forum. I am not trying to "brag" about something, just trying to get a different perspective. In this business, you have to always stay on top of things, because they change on a moments notice.
We do not have the "it has to be invented here" problem, most of what we do started with a minor idea someone heard that someone was doing. Obviously, we have an edge in implementing, expanding on and fine tuning, but it is not rocket science.
I'm working on a system that is a combination of many things I've come across and am very excited by the prospects. I've taken 3 different concepts and blended them to come up with a very viable system. These are a few ideas that I've said what if?.
wasn't there a university where very smart people worked over months with unbelievable resources to developed a trading system. After finishing the work they started trading and failed!!!!!! I don't know if this storry is true but I think I read it annywhere in the chuck lebeau board.
alain, thanks for the reply. if one cuts the losses on a 50/50 random entry methodology, would not the trader win ? in fact, you can have 100 bad trades that you lose $50.00 with, then one, just one winner of 10 k or even much less above 5k and you have WON. just some thoughts. best, surf