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Trading sytems losing value with age or the more people trade it. Fact or fiction?

  • Post #1
  • Quote
  • First Post: Sep 16, 2009 7:18am Sep 16, 2009 7:18am
I have developed a system which is still in the early stages of testing. So far in under 3 weeks it has turned a 5k demo into 19k.

I've decided it if hits 100k with consistant profit, I will go live with it.

I'd like to share it with everyone on the site. However I have a concern, I hear EAs lose value over time or the more people trade them.
I'd like to hear some opinions on this, in my head I don't see why the more people trade a system the less peofitable it becomes. Surely if 100,000 people buy around the same time then the market can either absorb that or go bulllish.

So basically that's it, I want to share it but not screw up my own retirement fund in the process.
Quoting BenScoobert
I have developed a system which is still in the early stages of testing. So far in under 3 weeks it has turned a 5k demo into 19k.
Nice result i think.
I hope this system use MM properly.

I'll wait it.
I'd just like to add, its not the system in my signature
Quoting BenScoobert
I have developed a system which is still in the early stages of testing. So far in under 3 weeks it has turned a 5k demo into 19k.

I've decided it if hits 100k with consistant profit, I will go live with it.

I'd like to share it with everyone on the site. However I have a concern, I hear EAs lose value over time or the more people trade them.
I'd like to hear some opinions on this, in my head I don't see why the more people trade a system the less peofitable it becomes. Surely if 100,000 people buy around the same time then the market can...
I think you'll find that even if the entire MT4 userbase started trading one system (highly unlikely) it would not be enough to move the forex market. Furthermore, even if it were enough - depending on what kind of system it is, any bandwagon effect could potentially help improve its efficacy.
  •  Porky
  • | Joined Jun 2009 | Status: ...as in Porcupine, not the pig. | 34 Posts
I have read that the reason EA's lose value is because the market changes.

For example: An EA is set up to take advantage of a certain quirk in the market. Let's give it a simple one such as EURUSD on a bull run for 3 years straight. Then the market changes and the edge that made the EA effective is no longer valid.
Did the bull run end because several retail traders used the same EA? Doubtful.
My opinion: An EA has a limited life span regardless. Sharing it here will get a lot of people to work with it and probably either improve it or quickly prove it was just a streak of good luck.
But that is just my opinion. I don't have any advice for you.
It is encouraging to see that you want to share. The world is a better place because of good people.
Quoting Mindsphere
I think you'll find that even if the entire MT4 userbase started trading one system (highly unlikely) it would not be enough to move the forex market. Furthermore, even if it were enough - depending on what kind of system it is, any bandwagon effect could potentially help improve its efficacy.
I agree 100% with this.
Quoting Porky
I have read that the reason EA's lose value is because the market changes.

For example: An EA is set up to take advantage of a certain quirk in the market. Let's give it a simple one such as EURUSD on a bull run for 3 years straight. Then the market changes and the edge that made the EA effective is no longer valid....
You are probably right about limited lifespan, the market does change.
Quoting Mindsphere
I think you'll find that even if the entire MT4 userbase started trading one system (highly unlikely) it would not be enough to move the forex market. Furthermore, even if it were enough - depending on what kind of system it is, any bandwagon effect could potentially help improve its efficacy.
This is unlikely.

One of the reasons the market has changed so drastically in the last 5-10 years is because of all the influx of small traders picking at, or giving to the huge pool. If every MT4 user was to use the exact same EA with the exact same settings with the exact same broker (so the EA reacts at the exact same time for everyone) then I can almost guarantee that it will have some effect on the market, there is no way it can't.

It's like saying if you add even 1 drop of water to a full almost overflowing bucket of water, where the water is hanging on by the sides of the bucket (yes this can happen, check it out, water is interesting), that it will not under any circumstance overflow. The reality is this is entirely untrue. That single drop *could* very well spill over the side, or it *could* be absorbed by the body of water. To say either is a definite is completely taking out any Chaos Theory.

A single drop of water will never follow the exact same path as one before it.
Hi, Ben

I'd like to hear about the system you're developing. Do you know the name of the thread you'll be posting it on? "Trading systems losing value with age" probably isn't the name... Or maybe it is??? Is it an EA or a trading system? Thanks.
Quoting BenScoobert
I have developed a system which is still in the early stages of testing. So far in under 3 weeks it has turned a 5k demo into 19k.

I've decided it if hits 100k with consistant profit, I will go live with it.

I'd like to share it with everyone on the site. However I have a concern, I hear EAs lose value over time or the more people trade them.
I'd like to hear some opinions on this, in my head I don't see why the more people trade a system the less peofitable it becomes. Surely if 100,000 people buy around the same time then the market can either...
ben, your stat is not available. Please check
Let us be green
well, I believe that those who "humbly" offers its "EA" charitably the general population, can only be focusing on 3 goals:
- Have others do the dirty work;
- Collect "investors" (read silly) to manage the account, or receive an extra;
- Or (what really hope) want to get a reasonable amount of brainstorming to mature more quickly the ideal ...

whatever the case, I hope the bottom of my heart, something that is really functional, real and disinterested.

greetings,
Let us be green
Quoting leafarct
well, I believe that those who "humbly" offers its "EA" charitably the general population, can only be focusing on 3 goals:
- Have others do the dirty work;
- Collect "investors" (read silly) to manage the account, or receive an extra;
- Or (what really hope) want to get a reasonable amount of brainstorming to mature more quickly the ideal ...

whatever the case, I hope the bottom of my heart, something that is really functional, real and disinterested.

greetings,
Some people will always think others are out to make a quick buck. I have not been a member of this forum for 18 months to suddenly go against the forum rules.
Some people, like me, have a generous nature. If I can release this to fellow members without shooting myself in the foot, then I will. I see your English is not great, so I will take it you meant well and it was lost in translation a little.

The link in my signature is not the EA I am discussing, as I said in post 3, but thanks for pointing it out, mt4stats has had a little trouble lately.

The link for the results to this one is http://benscoob100100.mt4stats.com/analyses.php

I feel I may post the EA tomorrow, and some of my thoughts on how it came to be.
Quoting mary4x
Hi, Ben

I'd like to hear about the system you're developing. Do you know the name of the thread you'll be posting it on? "Trading systems losing value with age" probably isn't the name... Or maybe it is??? Is it an EA or a trading system? Thanks.
Hi Mary

I did originally post in the "Trading Systems" thread, but someone saw fit to move it here.

The system doesn't really have a name, just didn't seem important to name it.

Keep your eye on this thread I guess. It was a system which I programmed into an EA. Albeit a rough EA, but it works nonetheless as you can see from the stats page.
Okay, Ben. Will watch for it. Stats page says nothing has been published from your Metatrader 4.
Quoting mary4x
Okay, Ben. Will watch for it. Stats page says nothing has been published from your Metatrader 4.
http://benscoob100100.mt4stats.com/analyses.php

this link, not the one in my signature
http://www.mt4stats.com/chart/balanc...coob100100.png
http://www.forexfactory.com/%3Ca%20h...%22%3E%3C/a%3E
Quoting BenScoobert
You are probably right about limited lifespan, the market does change.

Markets don't change.... because participants are the same as 10, 20, 100 years ago... although the world is very different we as humans haven't changed that much especially regarding our social moods, and primitive sentiments such as greed, fear and panic...

What happens is of course the market will undergo moments of sideways, trending, etc...

A system can remain active for years end and keep working... Look at some CTA's such as Bill Dunn and John W Henry... Bill Dunn is probably the best hedge fund out there, his trading system he says, he devised it in the 60's and it's untouchable ever since... sure it had it's drawdowns but for 40 years having a yearly return of 25+% ... (Many people said during 2003-2005 that his fund and his trading program was not working anymore markets had changed etc... he had a big drawdown of 30-40%). Yet in 2006 and 2007 he made around 40 and 50% each year, and in 2008 he made almost 100%...

John Henry the owner of the Red Sox although only started during the 80's I believe 84, his percentage annual return are even greater of 31% for 24 years...

So in my opinion something that has been working for 40 and 25 years to me sounds like a pretty robust system
i've seen the stats and sorry I don't like it... it has a negative expectancy... at least from the first looks... I don't see this EA as realistic because trading almost 8 lots with a 5000USD account is asking for trouble...


8 lot = 800,000 / 5000 = 160x leverage on the trade
Also what more cues on the "unrealistic" scenario...

All you profits came from unrealstics orders such as 21 lots, 8 lots, 9 lots, 22 lots and 7 lots trading positions...

try doing it without MM first like always doing 1 standar contract... if it has positive after a good sample of let's say 1000 trades at least, then we can add money management to improve results... but like this i would say pretty much no one would have success with such system
This thread is continued here, I have attached the EA on the new thread

http://www.forexfactory.com/showthread.php?t=197491
Oops, too late - I was gonna say DONT SHARE IT!! - When too many people trade a particular style brokers mobilize to kill any advantage. (Think FapTurbo that used to win until brokers started widening spreads during the hours it trades) - Since most dont have the good sense to trade with ECN's they just create a fight that their bucketshop is determined to win. Unless its a true 24 hour trading system you prob dont have a long term chance if you share it. Since most of todays systems depend on trading within limited hours. Eventually the constricted time creates its own trading flow that kills the system even with ECN's. People that bought FapTurbo Evolution for Dukascopy are crying right now because it trades the slow asian session and these users are fighting each other for liquidity and experiencing order slippage, trade rejects, missed SL/TP's. Its actually a great example of how too many people trading the same system can kill a previously profitable EA even on one of the deepest liquidity pools in the forex market. (the beta testers had fabulous returns but now...)

Read the last 10-15 pages of this forum its sickening how only about 2k users (and prob only about 1K are actually LIVE) killed a working system - http://www.donnaforex.com/forum/inde...topic=519.1905
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