Option contract on individual trader performance?

99% of all traders eventually deplete their accounts. Using this fact can't one setup a type of '''options contract on traders'''. A trader and couter party enters into an agreement that if the trader executes a certain number of margined trades over a period and is above 30% the counter party will give him an extra 20%. If the trader though turns negative he must pay the counter party 30% of the margined account or whatever.

Any ideas on this?

The seller of the option will be exposing himself to adverse selection - the big profitable traders will hide their proficiency and take his money (for example a HFT firm).

The terms of the contract can be standardized to anything both parties agree on. For example HFT would not be allowed if the counter party chooses not to. Ideally one would seek out an individual trader with $10000 deposited with forex.com. Especially those who don't have the intellectual fortitude to grasp why Elliot waves don't work. Target the posters posting under the Elliot wave thread, all of them will have negative equity over a two year period.

Or even better the ''James16'' group, you can't lose shorting his advice.

Thus know your trader.

And what would prevent some really good traders from joining the James16 or EWT group, hang around and being "stupid" in general so that they can get "invited" for a protection contract?

When trying to game someone, always think how you could be gamed yourself.

Note that the following post is in a breezy very speculative manner. I am not making a statement so much as asking for a better perspective.

In quantum mechanics there is the theory that actually observing the experiment directly influences the outcome, even though there was no physical interaction. Lets apply this theory then to one human copying another human trader trader and specifically not an EA.

On trade copier mt4 software there is the option to do the inverse of the signal provider.
http://groups.google.com/group/futur...b897605407a9a8


Probablity tells us that the chances are almost 99% that after two years a trader will bust his account. Thus all one has to do is subscribe to a new trader who did a few courses with Larry Williams, Oliver Velez etc and tell this trader you think he is a genius , while knowing he won't make it.(the ethics of this is doubtful). Especially if the trader can't see why Larry Williams is a scam. Don't at all costs tell him you are taking the inverse of his trades, this might actually make his trades work due some 'quantum entanglement'.(yes, I know this might be nonsense but as stated, see this more as a light hearted question than an assertion.)

He thinking you are faithfully following his Larry Williams inspired trading nonsense forces him to make even more mistakes, because he knows he is being watched and thus taking the inverse means you can't loose as long as the trader giving his signals don't realize this.

Remember the very act of observing the the quantum experiment influences the outcome. We have a type of quantum mechanical paradox here, because if you as a trader actually apply your mind you are almost 99% guarenteed to blow your account after 2years. If you do the inverse of a trader applying his mind you are almost certain to be in positive equity.

Now lets take a monte carlo random generator that buys sells euro at random, the account will almost certainly blow. Why then will your account also blow if you take the reverse of the monto carlo? Because the generator lacks consciousness.(here I could be a bit confused, feel free to correct me)

With a real live human there is an emotional act, infact the more intense the more likely he will blow his account and you make money by taking the inverse of his trades, without him knowing this.

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Every single forex trading contest is a scam, do most traders have the insight to realize this? For example the Robbins world cup trading constest where they allow the top trader Unger to trade with 50 accounts, while you as an individual trader can only enter with one account, thus standing no chance in winning against Unger. Robbins then only reports on the 1 or 2 accounts that made money leaving out the 48 loosing accounts. This is assuming their results are audited by the NFA(why would the NFA even bother?)

There is no independant verification of the robbins world cup trading contest, I want to see the actual tax return of Unger to see the part where he files his trading losses, on the accounts he isn't telling us about but is informing the German tax authority. Without a tax return one can't really determine if a trader is actually making money.