I think there are a couple of misconceptions here. First, there are hundreds of thousands of people and instutions combined participating in the marketplace. Everybody's running a system of one kind or another. Whether it's fibonnaci or moving averages or whatever -- if you trade, you have a system. Even if it's just picking stocks out of a hat, or pinning up the WSJ and throwing darts at it, or using astrology. Whatever. Systems are like beanie babies. They're everywhere. Right now, if you sit back and think about it, you're probably using multiple systems and methodologies when you approach the market. Some are the fruit of study, and some the fruit of experience. So if you are a trader with an average amount of capital, say $100k or so, your trades, even if you trade actively, are more or less irrelevant. Like a gnat smacked by the windshield of a car going 70 mph in the opposite direction. The force applied on the vehicle is there, but more or less unnoticeable to anyone but the physicists. To give you a point of reference, when big institutions trade the S&P large contract, they sometimes put in orders for 125, 250 or more contracts at a time. Current value, that's 364,937.5 (per contract) *250 or $91,234,375 in a single trade. There's also a counterparty to that transaction. So lets say you have a good system. Fine. You get your friends to use it. Great. Let's also say you're all fairly well off, and you have ten friends and you're each trading $250,000 apiece. That's 2.5M. To get up into the area where the action is, you need 364 really rich friends getting together to act as counterparty to just one institutional transaction. To take it a step further, let's say you run a service and have a thousand subscribers. Let's say each of them (on average) has about $50k. That's $50M. Ok, so now you are the equivalent of a mid-sized fund. That's not bad, but it's not that big either. Because your "fund" is only going trade in little slices, and if your system doesn't churn but trades a reasonable short-term strategy, it's only going to trade once per day, and still not be able to act as a counterparty to one of these large institutional trades. Now take that $91M single institutional trade and expand it to cover all of the transactions that happen every day in every index futures market. Now add in grains, metals, and other commodities. Now add the entire universe of domestic stocks. Now add all of the underlying options series. Now go global and add in all of the markets you have access to through your IB account. Now add currencies and other financials. You see my point. The sub-100M fund I used to work which used leverage to a fair extent, on active market days barely caused an up or downtick in the S&P pit. There is also a credibility issue most systems come with -- because they are a system. And systems, unlike the human mind, are generally not that adaptive to change. So even if you have a really good one, it's hard to get people to believe you. So even if you have a great system, you have a couple of problems -- first, it's unlikely you have enough money to make a difference. Second, it's unlikely you will convince enough people to make a difference, and third, it's unlikely your volume even with thousands of subscribers or users all doing the same thing will make any difference to the market at large unless they're targeting a very specific piece of it. When you launch your multi-billion dollar hedge fund, then you might cause a stir, the way a large tanker stirs up a sea full of plankton as it cruises for port -- and even that kind of movement rarely leaves a long-lasting impression. There's just too many participants doing too many different things. I'm with you on the handout bit -- there's the danger of becoming dependent on someone else's work for your own good fortune, which is not a very enlightened way to walk the path of your life; the markets should be as much an interior journey as they are an exterior one. Al
algorythm... you nailed it... sistems don't stop working because someone posts them on ET... or even on the WSJ... the market simply can't be distorted in the long term, it falls back to equilibrium. Anyone who thinks revealing a sistem is going to ruin it has to get an ego check... I personally believe that there's no real reason not to develop a system on a public wiki-like environment... or through a forum as long as it's a general system [that works over many simbols, not just one or two illiquid ones]
Money management is not a trading strategy, money management is a component of trading strategy. And trust me, there are secrets out there. If you're merely saying that there's always someone else who has figured out what a given trader has struggled to figure out and to keep to himself, well, yes ... so what? It's still a secret until it's published somewhere. All I have to do is look at the latest "TA never works" thread to see how many people have no clue as to what's out there, aside from what they've read somewhere.
"it falls back to equilibrium." However, the equilibrium is a market that is more efficient than before the system disclosure. If not, the market would be static and techniques that worked in the past would continue to work. The market evolves with each 'innovative' disclosure.
In 2000 the market stoped quoting in 1/8 increments to start quoting on 0.01 increments. That is a more precise determination of the equilibrium price.
You are always making fun of everyone Jack.. but someone who has to mooch of his girlfriend at your age is in no position to ridicule anyone else
For someone who posts so much crap on how to SUPPOSEDLY do things right. I must commend you for this most "eloquent" post. What happened this time ? I was expecting a sermon on "how to do things right" ? Instead you opted to ridicule with three letters. Not sure which one I detest the most. They both usually mean the same crap except this time you wasted less bandwidth so that's a plus.