How much would you charge to sell your system? | Forex Factory

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How much would you charge to sell your system?

  • #1
  • First Post: Edited 5:43am Jun 24, 2012 4:38am | Edited 5:43am
Hi,

I am canvassing opinion on how much to charge for potentially a method

which has only just been developed.

I have run visual backtests on the GPD/USD for the last 10 years and

marked exactly where every single trade should have been taken.

It is an end of day mechanical system with no indicators or discretion

required.

Since I have only just finished the testing stage there are no 'real' results

just on paper.

RESULTS PER YEAR - Based on account size of 10,000 GPB and risking 10 % per trade - the profit and loss of every single trade is 10% of account ie £1000 gbp.

2002 - 80%
2003 - 110%
2004 - 100%
2005 - 50%
2006 - 60%
2007 - 70%
2008 - 170%
2009 - 80%
2010 - 40%
2011 - 110%
2012 - currently 80%

Greatest drawdown and consecutive losses of 6 trades occurred in 2006,

which based on account size of £10,000 is 60% - however account size relative to position size can be adjusted to make it safer.
The system is averaging a little under 1 trade per week.

If I had traded this 10 years ago £10,000 would have grown to £92,000 and that is without increasing the trade size with the profits.

The question is then - how much is this worth potentially?

All replies greatly appreciated.

Regards Slim
  • #2
  • Jun 24, 2012 5:07am Jun 24, 2012 5:07am
If your systems that good why not just trade it yourself?
  • #3
  • Jun 24, 2012 5:20am Jun 24, 2012 5:20am
Quoting Hugh Briss
If your systems that good why not just trade it yourself?
  • #4
  • Jun 24, 2012 5:25am Jun 24, 2012 5:25am
Quoting Hugh Briss
If your systems that good why not just trade it yourself?
Hi Hugh,

I do intend to trade this method, but as always with every new idea- it
needs capital to start with

Thanks Slim
  • #5
  • Jun 24, 2012 5:34am Jun 24, 2012 5:34am
Quoting slimcat
Hi Hugh,

I do intend to trade this method, but as always with every new idea- it
needs capital to start with

Thanks Slim
hehe so, you're transferring the risk to someone else.
nice risk management
big numbers are our friends...
  • #6
  • Jun 24, 2012 5:39am Jun 24, 2012 5:39am
back to topic...

i've never bought anything like that so i have no idea about market value of it but if you're sure about it - set an agreement that you sell it to $1000+ accounts only and you take a half of the first year if the system shows profitable as you say.

that would:
1) sound nice and fair
2) give you some nice value back

good luck!
big numbers are our friends...
  • #7
  • Jun 24, 2012 5:41am Jun 24, 2012 5:41am
Quoting deeZG
hehe so, you're transferring the risk to someone else.
nice risk management
Hi DeeZG,

I just thought the same thing haha

but seriously, I could only really start this at the moment with £100 lol

Thanks Slim
  • #8
  • Jun 24, 2012 5:46am Jun 24, 2012 5:46am
Quoting slimcat
Hi DeeZG,

I just thought the same thing haha

but seriously, I could only really start this at the moment with £100 lol

Thanks Slim
no, i understand...you offer and if there is a buyer - it's absolutely ok
it wasn't my intention to imply anything...

and i've put into my next post what would i be willing to give if i would be interested in buying such a system.

good luck!
big numbers are our friends...
  • #9
  • Jun 24, 2012 5:55am Jun 24, 2012 5:55am
Quoting slimcat
Hi,

I am canvassing opinion on how much to charge for potentially a method

which has only just been developed.

I have run visual backtests on the GPD/USD for the last 10 years and

marked exactly where every single trade should have been taken.

It is an end of day mechanical system with no indicators or discretion

required.

Since I have only just finished the testing stage there are no 'real' results

just on paper.

RESULTS PER YEAR - Based on account size of 10,000 GPB and risking 10 % per trade - the profit and loss of every...

The answer is £0

Lets face facts:

1) it has never been traded.

2) with no unique indis etc. if it really works then it will be freely distributed across the internet in minutes and people will use it for free. If you are lucky you may have sold 10 copies before that happens.

3) you are not a world famous trader and the returns it offers will not generate a high price tag, but on the otherside those numpties that look to buy a cheap system expect to see projections of never seen before riches.

So you can't sell for a high price with no pedigree and you can't sell cheap with no bling factor, and it will be copied anyway.

Therefore it is worthless to anyone but you....

Regards
  • #10
  • Jun 24, 2012 6:32am Jun 24, 2012 6:32am
Sounds like compounding that £100 is the way forward!
  • #11
  • Jun 24, 2012 6:39am Jun 24, 2012 6:39am
Quoting MaxDoom
The answer is £0

Lets face facts:

1) it has never been traded.

2) with no unique indis etc. if it really works then it will be freely distributed across the internet in minutes and people will use it for free. If you are lucky you may have sold 10 copies before that happens.

3) you are not a world famous trader and the returns it offers will not generate a high price tag, but on the otherside those numpties that look to buy a cheap system expect to see projections of never seen before riches.

So you can't sell for a high price with...
Hi MaxDoom,

You are right, which is why I am canvassing opinion, as I thought the same thing.

So, not only is it almost impossible for the retail trader to develop a purely mechanical system, it is almost impossible to sell it profitably!

All those years locked away from society eating catfood sandwhiches in my dark basement trawling through the charts - all for nowt

No wonder then that 95% of us will still be scratching our heads in years to come lol

Thanks Slim
  • #12
  • Jun 24, 2012 7:11am Jun 24, 2012 7:11am
am i reading right? its a 1R system? Can make them in my lunch break...

Show me a 3/1 system with 50% win rate then I might be interested.
tradewith60
  • #13
  • Jun 24, 2012 7:16am Jun 24, 2012 7:16am
Quoting 60minuteman
am i reading right? its a 1R system? Can make them in my lunch break...

Show me a 3/1 system with 50% win rate then I might be interested.
Hi 60minuteman,

Yes this method is 1:1

My 3/1 sytem is still being tested

Thanks Slim
  • #14
  • Jun 24, 2012 7:20am Jun 24, 2012 7:20am
Quoting slimcat
Hi 60minuteman,

Yes this method is 1:1

My 3/1 sytem is still being tested

Thanks Jason
hahaha... good answer..
tradewith60
  • #15
  • Jun 24, 2012 7:20am Jun 24, 2012 7:20am
I wouldn't sell the system but offer trade signals to rent (at rentasignal or something like that)
I think you will need at least one year of forward test to show what you have to offer.
Make it on demo or take your 100 to oanda where you can trade as low as 1 unit (this would make your position size 1/100 of the size you tested with)
  • #16
  • Jun 24, 2012 7:29am Jun 24, 2012 7:29am
Quoting iwjw
I wouldn't sell the system but offer trade signals to rent (at rentasignal or something like that)
I think you will need at least one year of forward test to show what you have to offer.
Make it on demo or take your 100 to oanda where you can trade as low as 1 unit (this would make your position size 1/100 of the size you tested with)
Hi Iwjw,

This may well be a 'realistic' possibility.

Thankyou for your input

Slim
  • #17
  • Jun 24, 2012 7:35am Jun 24, 2012 7:35am
Some people can buy a plane but they can not fly it.
  • #18
  • Jun 24, 2012 7:58am Jun 24, 2012 7:58am
Quoting slimcat
Hi,

I am canvassing opinion on how much to charge for potentially a method

which has only just been developed.

I have run visual backtests on the GPD/USD for the last 10 years and

marked exactly where every single trade should have been taken.

It is an end of day mechanical system with no indicators or discretion

required.

Since I have only just finished the testing stage there are no 'real' results

just on paper.

RESULTS PER YEAR - Based on account size of 10,000 GPB and risking 10 % per trade - the profit and loss of every...
if you sold it to a bank or a hedge fund, they would probably not have an interest in that, due to liquidity issues (when they trade their billions). Secondly, you say you didn't even increase trade size when testing that, (which should be normal over such a period of time). And that is exactly the issue, there are lots of systems that can't handle increasing trade sizes, you would get terrible equity curves. However, I don't know your system, so it's up to you to perform a test with increasing trade size (this might also lead to bigger max historical drawdowns.)
Anyways, as other people suggested, if you wanna sell it over the internet, then you will not be very successful, it will be downloadable for free somewhere within days.
  • #19
  • Jun 24, 2012 8:28am Jun 24, 2012 8:28am
Quoting slimcat
The question is then - how much is this worth potentially?
If your backtest results are accurate, then your system is potentially worth millions (if not billions) of dollars. But, of course, the key word there is potentially.

Quote
How much would you charge to sell your system?

I would never sell my system. Your best bet is to find another means of raising capital and keep your system to yourself, trading it live as soon as you raise the cash to do so.

Quote
So, not only is it almost impossible for the retail trader to develop a purely mechanical system, it is almost impossible to sell it profitably!

I don't know about "almost impossible" to develop a purely mechanical system, but from just reading the Trading Systems forum here, it seems to be quite challenging for most people. And, as others have said, I can't imagine why anyone would ever want to sell a profitable, mechanical system.

I hope it works out for you!
  • #20
  • Jun 24, 2012 9:34am Jun 24, 2012 9:34am
I agree with Custos. The main problem with MT4 and the spot FX market in general is that systems/strategies are 'picked off' very quickly. I notice that your strategy is an end of day signal generated by some kind of look back that you noticed is profitable. It probably is. Strategies that take advantage of establised trends work so long as the trend continues. Proper stops insure sucess. Lack of stops insure failure. I have had an incredibly sucessful career and have been fortunate to notice how some other very sucessful traders operate. All have some kind of stop in place after they put on a trade. If I were you I would find a freind or two and offer them your strategy for a piece of the back-end. That is, after they make some profit, you share in something. Tell them that you have other systems in development and they will see them as well. Ideas can never be protected, only the idea maker. Use the payments to trade the system. That way, if it is a good startegy, you benefit twice.
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