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relation between profitability and extent of usage

  • #1
  • First Post: Jan 26, 2011 3:56pm Jan 26, 2011 3:56pm
Hi, Everyone,

I wonder if there is any relation for a trading system between its profitability and the extent of its usage. Suppose a trading system is profitable, if more and more people start to use the system, will this turn the system to a lossy system?

Many thanks!
  • #2
  • Jan 26, 2011 9:23pm Jan 26, 2011 9:23pm
Quoting dogberry
Hi, Everyone,

I wonder if there is any relation for a trading system between its profitability and the extent of its usage. Suppose a trading system is profitable, if more and more people start to use the system, will this turn the system to a lossy system?

Many thanks!
Highly unlikely in such a liquid environment and considering that 2 different people will trade a system in there own manner (except for EA's that are programmed to execute the same way) there would be very little chance that you could gather a large enough following to alter the amount moved by large institutions/banks ect which create a large portion of the volume.
  • #3
  • Jan 27, 2011 9:26am Jan 27, 2011 9:26am
Many thanks for your explanation. So you agreed that EAs would have a higher impact than a trading system, because for EAs all the people using them are trading exactly the same way.

If this is the case, selling or buying EAs seems not justified. For the people who wrote EAs, if they are truely profitable, he would not sell them. Otherwise, the profitable EAs may turn to lossy ones. Is my understanding correct?

Many thanks!


Quoting Razor_trader
Highly unlikely in such a liquid environment and considering that 2 different people will trade a system in there own manner (except for EA's that are programmed to execute the same way) there would be very little chance that you could gather a large enough following to alter the amount moved by large institutions/banks ect which create a large portion of the volume.
  • #4
  • Last Post: Jan 27, 2011 4:59pm Jan 27, 2011 4:59pm
Quoting dogberry
Many thanks for your explanation. So you agreed that EAs would have a higher impact than a trading system, because for EAs all the people using them are trading exactly the same way.

If this is the case, selling or buying EAs seems not justified. For the people who wrote EAs, if they are truely profitable, he would not sell them. Otherwise, the profitable EAs may turn to lossy ones. Is my understanding correct?

Many thanks!
It wouldnt matter if alot of people bought the EAs and turned them on at once, the fact that someone bout something that claims stupid returns would mean they want to take there $1000 account and turn it to a million therefore it would imply that you would need at least a few million customers highly leveraged risking there entire account on a trade for any such ripple and I just do see it happening.

And yes if there is a profitable (long term) EA then no it would not be for sale. Even with the logic above, if I created an EA that made those returns the last place I am going to worry about it managing a website and worry about all the things tied with sales. I would be on my multi million dollar yacht cruising about the shores of some of the best places on earth while my EA just stays on cruise control and continues to throw money into my vault. Which would you rather? $199 from some shmuck only to have emails about how it failed once and wiped out his account or just cruising.....
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