This so called "self-destruction" of trading systems... | Forex Factory

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This so called "self-destruction" of trading systems...

  • #1
  • First Post: Edited 4:40pm Mar 15, 2007 3:58pm | Edited 4:40pm
Most traders are convinced that if they publish or post the exact trading rules of their excellent forex trading system, the system will somehow lose all its effectiveness and stop working.

This is of course a myth, the forex market is so vast and so liquid it does not give a hoot how we are trading or what we are "up to". We are just small, small sardines swimming in the Pacific.

For instance, classic technical analysis patterns like head and shoulders, trendlines, support/resistance, triangles, double top, double bottom, etc... have been around for more than 50 years, million of people are acting on these patterns every single day, on the forex, futures and stock market and yet, they are still working just fine like if they have just been discovered yesterday.

Book writers in general just love to sell us this myth : "Sorry, we cannot give you the exact trading rules of this forex system because it would render the system useless after a while"

Yeah, right, why don't you just admit your FX system is a losing system to begin with (they know it of course, they have already backtested it secretely!) ?

Or they would say something like this : "Our FX system is no longer profitable because there are too many people trading it" ???

Sure, whatever.

What they don't tell you is that it would take many billion and billion dollar orders to move the FX market a couple of pips, if at all.

To be continued...
  • #2
  • Mar 15, 2007 4:03pm Mar 15, 2007 4:03pm
Very good thoughts.
I would also add the backtest-myth story too. One heard that backtests are useless, and now everyone is a smart-455 and states without thinking that backtests are just a waste of time :-)
  • #3
  • Mar 15, 2007 4:17pm Mar 15, 2007 4:17pm
This is a thread that makes one not only think about the reason why we are hoarding our systems but your also making me feel guilty too. If this is the purpose of your post, it is working.
  • #4
  • Mar 15, 2007 4:21pm Mar 15, 2007 4:21pm
Quoting MarkGavalda
Very good thoughts.
I would also add the backtest-myth story too. One heard that backtests are useless, and now everyone is a smart-455 and states without thinking that backtests are just a waste of time :-)
Thanks for your comments Mark and please let these traders think that backtesting is a waste of time, their loss our gain after all...
  • #5
  • Mar 15, 2007 4:26pm Mar 15, 2007 4:26pm
Quoting WHTenn
This is a thread that makes one not only think about the reason why we are hoarding our systems but your also making me feel guilty too. If this is the purpose of your post, it is working.
Beg your pardon?? My post is making you feel guilty, why is that?
  • #6
  • Mar 15, 2007 4:43pm Mar 15, 2007 4:43pm
Quoting FXTerminator
Beg your pardon?? My post is making you feel guilty, why is that?
lol
  • #7
  • Mar 15, 2007 4:47pm Mar 15, 2007 4:47pm
Quote
Most traders are convinced that if they publish or post the exact trading rules of their excellent forex trading system, the system will somehow lose all its effectiveness and stop working.

This is of course a myth, the forex market is so vast and so liquid it does not give a hoot how we are trading or what we are "up to". We are just small, small sardines swimming in the Pacific.
And yet there is a whole industry based on harvesting hapless sardines for consumption. Case in point:

Quote
What they don't tell you is that it would take many billion and billion dollar orders to move the FX market a couple of pips, if at all.
  • #8
  • Mar 15, 2007 5:04pm Mar 15, 2007 5:04pm
The sentiment that exposing a system somehow causes it's demise only underlines superstition. I have little respect for the 'win and hold' method of nondisclosure. I'm making my way a few pips at a time. I'm working my way to a successful career and I have no qualms should I discover some winning method that I will gladly share it rather than be as pedestrian, greedy and xenophobic as human nature can shrink to. I've always shared with others what I've known to work, I love watching others succeed.

The times I have been wary about releasing what I consider some 'secret' bit of info and have overcome my impulse to withhold sharing it, it has ultimately ALWAYS come back to me positively in forms I could never have imagined,,, duh.

This philosophy is not only healthy, enlightened and freeing, but tens of thousands of years old.

Heres to trust and sharing.

Cheers
  • #9
  • Mar 15, 2007 5:13pm Mar 15, 2007 5:13pm
Quoting FXTerminator
For instance, classic technical analysis patterns like head and shoulders, trendlines, support/resistance, triangles, double top, double bottom, etc... have been around for more than 50 years, million of people are acting on these patterns every single day, on the forex, futures and stock market and yet, they are still working just fine like if they have just been discovered yesterday.
don't forget these all actually work because all these people are acting on them

the more that use these patterns the better

self-fulfilling

check out darkstars post here very enlighteing http://forexfactory.com/showpost.php...98&postcount=5

this topic has come up before
  • #10
  • Mar 15, 2007 5:14pm Mar 15, 2007 5:14pm
dude, youre predicting the future... others knowing cant change what was gonna happen anyway, lol
i need to start sharing my methods, maybe other people will buy when i buy and i can sneak out early after they give me a pip spike yayay
its genius
  • #11
  • Mar 15, 2007 5:20pm Mar 15, 2007 5:20pm
Quoting inflxshn
The sentiment that exposing a system somehow causes it's demise only underlines superstition. I have little respect for the 'win and hold' method of nondisclosure. I'm making my way a few pips at a time. I'm working my way to a successful career and I have no qualms should I discover some winning method that I will gladly share it rather than be as pedestrian, greedy and xenophobic as human nature can shrink to. I've always shared with others what I've known to work, I love watching others succeed.

The times I have been wary about releasing what I consider some 'secret' bit of info and have overcome my impulse to withhold sharing it, it has ultimately ALWAYS come back to me positively in forms I could never have imagined,,, duh.

This philosophy is not only healthy, enlightened and freeing, but tens of thousands of years old.

Heres to trust and sharing.

Cheers
I suspect when you 'gladly share your winning method' you will soon be rolling in love as you watch someone else succeed because he is now rolling in dough. Why, he placed a copyright on it and, now it costs $x for 'your winning method'
Just something to consider in the future perhaps.
  • #12
  • Mar 15, 2007 5:23pm Mar 15, 2007 5:23pm
Quoting november15th
dude, youre predicting the future... others knowing cant change what was gonna happen anyway, lol
i need to start sharing my methods, maybe other people will buy when i buy and i can sneak out early after they give me a pip spike yayay
its genius
Let's put some Lipstick on this Pig then Pump it & Dump it.
  • #13
  • Mar 15, 2007 5:26pm Mar 15, 2007 5:26pm
I suppose a good reason to not share your system is because it makes for more competition. If really good systems are readily available, how would one that finds or creates his own benefit? He would not be unique, he couldn't get into that MM role etc. Also, the more success, tools such as Bloomberg Anywhere would get more expensive, chart data may become an added expense like happens with futures. There are a lot of good reasons for not sharing, not specifically related that they won't "work" anymore. Except news trading is becoming that way or... has become.

Although, if someone is feeling jolly... I am still looking for a ranging market system that makes an easy transition into capturing at least 2/3 of a trend.

Stupid ranging markets.......
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #14
  • Mar 15, 2007 5:38pm Mar 15, 2007 5:38pm
Quoting FXTerminator
What they don't tell you is that it would take many billion and billion dollar orders to move the FX market a couple of pips, if at all.

To be continued...
actually, it may take only a couple of millions, an ECN, a basic knowledge of most common systems, and the right time to push a trendline
"Everybody needs money. That's why they call it money" - Danny De Vito
  • #15
  • Mar 15, 2007 7:03pm Mar 15, 2007 7:03pm
Quoting mbqb11
don't forget these all actually work because all these people are acting on them
Actually no, it's the reverse: because people tend to react the same way when confronted with the same situtation, they create these unique chart patterns we were talking about. A repetitive, predictable behavior helps create these universal chart patterns. What we see on a chart is just psychology (fear and greed) in action, over and over again, and not the opposite.

In other words traders don't just wake up one day on and say : "Hey, let's create a head and shoulders pattern on the swiss-yen today, what do you say guys?"


Quoting mbqb11
the more that use these patterns the better
Exactly, then revealing a trading "secret" should accomplish the same thing in the very long term, don't you think?
  • #16
  • Mar 15, 2007 7:18pm Mar 15, 2007 7:18pm
Quoting FXTerminator
Actually no, it's the reverse: because people tend to react the same way when confronted with the same situtation, they create these unique chart patterns we were talking about. A repetitive, predictable behavior helps create these universal chart patterns. What we see on a chart is just psychology (fear and greed) in action, over and over again, and not the opposite.

In other words traders don't just wake up one day on and say : "Hey, let's create a head and shoulders pattern on the swiss-yen today, what do you say guys?"



Exactly, then revealing a trading "secret" should accomplish the same thing in the very long term, don't you think?
agreed thats what i was going for, except if you read darkstars post if you have a true edge, you shouldnt reveal it

we are only really talking about chart patterns and indicator systems so far in this thread

best
  • #17
  • Mar 15, 2007 7:22pm Mar 15, 2007 7:22pm
Quoting FXTerminator


Exactly, then revealing a trading "secret" should accomplish the same thing in the very long term, don't you think?
Well, not for certain. If your "trading secret" is the ability to trade the head and shoulders with 80% accuracy lets say... if you release that and tens of thousands use it.. heads and shoulders patterns will not exist the way they do now. Thus you will actually have to learn to trade around a new pattern. Of course this is all speculation.. as no one knows.

Don't know if that makes sense at all?
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #18
  • Mar 15, 2007 7:48pm Mar 15, 2007 7:48pm
Quoting slide
actually, it may take only a couple of millions, an ECN, a basic knowledge of most common systems, and the right time to push a trendline
REMEMBER LEVERAGE, 400 : 1? so it is 400 times easier to move the market.

we only need few pips, and the chart always move up and down, what we feel like a working system may only a fake alarm.
  • #19
  • Mar 15, 2007 8:02pm Mar 15, 2007 8:02pm
Quoting Bemac
I suspect when you 'gladly share your winning method' you will soon be rolling in love as you watch someone else succeed because he is now rolling in dough. Why, he placed a copyright on it and, now it costs $x for 'your winning method'
Just something to consider in the future perhaps.
These days it only costs a stamp and a small processing free to copyright a trading system so that's not such a big deal really, Bemac.
  • #20
  • Mar 15, 2007 8:11pm Mar 15, 2007 8:11pm
How about enforcing that copyright everywhere in the world.
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