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Sharing hurt your method?

  • #21
  • May 12, 2007 12:39am May 12, 2007 12:39am
In my opinion, the secret is to know a winning system, and not share it..

Because if you shared it for free, they will poo-poo all over it..

But if you charged them $10,000 for a seminar, then they will kiss you like a Grecian god and believe every word from your mouth as if you were dribbling honey..
google:
  • #22
  • May 12, 2007 1:18am May 12, 2007 1:18am
you are so right

the critics (aka: recently broken forex mini traders) will denounce your system and all it's flaws as soon as you hand it over to them for free

and if it is really good there is no need to charge anyone as you can make much more just by trading it

all the criticism can do is make you question your own system and then not trade it as efficiently, becoming a self-fulfulling prophecy

with a decently ranging currency pair, anyone who has truly studied and understood position sizing, reward/risk ratios, and other "money management" truths can make money in forex by flipping a coin for entries

in forex, entries don't matter one bit, but exits do

there's your dang holy grail people

enough said
  • #23
  • May 12, 2007 4:28am May 12, 2007 4:28am
Quoting Darkstar
At 26,000 members and probably just as many guests, if each person here only commanded $100 our total buying power would be around $520mio. That certainly is enough to move the market and potentially destroy a legitimate inefficiency.

And many people here trade with far more than $100.

Helping someone learn how to trade is a very different proposition from what were discussing. Just because your not teaching everyone with an internet connection your bread and butter, it doesn't mean your not helping them.
yes but according to statistics, 90% of forex traders go broke so in the 26,000 member how are still trading ?

Yet if only 1000 trader has 10000$ that allready sufficient to move the market
  • #24
  • May 12, 2007 7:32pm May 12, 2007 7:32pm
Largely I agree with darkstar

My view is shorter term (years or decades) a method will likely get a boon from more people using the method. Over long term it might likely weaken. As traders we constantly exploit time, price and other trading systems using various methods (indicators of one sort or another). Naturally these systems will conflict on where and when to take an entry/exit. In short there is always someone out there trying to take advantage of you and your system in this market.
  • #25
  • May 12, 2007 7:43pm May 12, 2007 7:43pm
Hell no. It makes absolutely no difference. This market is big enough for the two of us, twenty of us, even 2,000 of us. I share my methods freely because I like helping other traders and also to save people from giving their hard-earned capital over to gurus, scamsters, and punks. I see it as my ethical obligation. We're all in this together.
  • #26
  • May 12, 2007 7:52pm May 12, 2007 7:52pm
Quoting lever70
Hell no. It makes absolutely no difference. This market is big enough for the two of us, twenty of us, even 2,000 of us. I share my methods freely because I like helping other traders and also to save people from giving their hard-earned capital over to gurus, scamsters, and punks. I see it as my ethical obligation. We're all in this together.
This statement is false if you are talking about arbitrage situations/ exploiting a market inefficiency. The method that was taught to me by darkstar would no longer work if it was openly shared. Period end of story.

For the majority of system out there and on this forum, sharing your rules would only help it.

Enjoy the weekend,
m
  • #27
  • May 12, 2007 7:57pm May 12, 2007 7:57pm
Quoting bassmouth
with a decently ranging currency pair, anyone who has truly studied and understood position sizing, reward/risk ratios, and other "money management" truths can make money in forex by flipping a coin for entries

in forex, entries don't matter one bit, but exits do

there's your dang holy grail people
Exactly. Hell... a handful of futures traders were even successful using the random entry/MM exit method. The Turtle method was famous because 70% of the students who knew crap-all about commodities went on to become successful traders. If you look at the rules for the Turtle method, you'd see the entry rule is simple: buy/sell on a breakout of a Donchian channel. The exit/MM rules are more complex, which is why it worked.

Entries are an educated guess as to which way the market is going. In the end, it is the exit that determines how much money you gain or lose.
  • #28
  • May 12, 2007 8:40pm May 12, 2007 8:40pm
That was probably one of the most insightful things I've read here for some time now, but I have to disagree somewhat with your notion of "edge" Darkstar.

You must have more experience than I, but have you ever seen a mechanical exit method that is always successful? Just like indicator backtesting, given enough samples a truly good method must fail quite horribly at times. Otherwise it must be a really conservative one that abandons trades in the middle of big moves, i.e when there are several large banks still buying. In the latter case, sharing such a method will have minimal effect, because no matter how many thousand members of FF tap away happily on their keyboards, there will be billions of dollars being moved against them. The effect will be minimal.

In the case where you have a "holy grail" , assuming it exists, and assuming that a large enough number of banks/institutions become aware of it, their fanatical following will heavily aid your entries and only marginally affect your exits. If you're so scared of people bailing out early, you could make your exits realtime with only overestimates published beforehand. And take it from me, central banks don't read posts by Darkstar or Plutonite on an online forum (maybe Merlin, I don't know ).

Exploiting holes on a single retail broker(and thus provoking reaction from that broker) is one thing, moving a trillion dollar market with a nice thread is another issue. If you have examples from past events (personal experience?) please show us evidence.

Cheers


Quoting Darkstar
Depends on your method I suppose.

A real honest to goodness trader’s edge should provide you with a way of looking at capital markets to discover inefficiencies. Sharing the edge you actually have is gold, but seldom is anyone interested in trying to understand what makes you profitable. So you can share it all day long and it doesn’t make the slightest difference to your profit. When one inefficiency dries up, you can use your edge to locate another one with little difficulty.

Pointing out the inefficiencies will usually destroy their profitability in short order. For an example you can look at news trading. Up until about 6 months ago, there was a gaping hole in Oanda's execution system which allowed a trader to get guaranteed fills on orders during an announcement. A small group of people were making some serious bank exploiting the hole until a few idiots decided they needed to prove to the world how smart they were by showing everyone else how it was done. The army of people flowing into the trade led to a widening of spreads and the death of that inefficiency. I imagine people still make some money trading the news, but not in the same way and the profit is nothing like it used to be.

Most systems being traded have no component of inefficiency to them and as such, no real edge. Almost all of the moving average and other derivative indicator based systems fall under this category. Some methods can be shown to be statistically profitable looking at historical data, but very seldom are they much better then chance (1-5%). Given a large enough sample of data they almost all break down. The reason for this is that the underlying order flow these systems need to win isn't generated by these systems. The likelihood of even 3 traders looking at the same combination of indicators and trading them exactly the same way is almost nil. The moral of this story is that sharing these systems will often have the effect of INCREASING their profitability (albeit marginally) because the effect on the order flow of more people trading at the same time in the same way causes the system to work. Unfortunately the most likely traders of these systems are novices and seldom follow the system exactly or for very long.

Fibs and long term (1hr+) price action system work for the same reason indicator systems fail. The concepts are SO pervasive within the trading community that the core patterns almost always generate order flow that helps them to work. A breakout doesn't work because it's a breakout, but because many people see the breakout and act in the same way. It's with these types of systems that exits become the critical component to success. Lots of people are entering at the breakout, but only the successful have back tested/forward tested different exit rules to determine the probabilities for the best exit. This data provides the winners their edge. It's a smaller edge then an arbitrage situation may provide, but it is still tradable for a decent enough profit.

It's for this reason you find a lot of information about entries but very little for exits. If the exits are what provide the edge, sharing that information will hand a portion of that edge over to someone else. Enough some ones and the profits are gone.

So to make a long explanation short, if the system you’re trading actually has an edge, sharing it will be detrimental for you. If it doesn’t have an edge, share away because it may actually improve it.

Ohh, and if you do manage to find a real market inefficiency, do yourself and those who are already trading it the courtesy of keeping your mouth shut about it. The shiny red Ferrari it will buy you will boost your ego for much longer then the complements of your trading peers.

Luck be with you.
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
  • #29
  • May 12, 2007 8:44pm May 12, 2007 8:44pm
Quoting lever70
Hell no. It makes absolutely no difference. This market is big enough for the two of us, twenty of us, even 2,000 of us. I share my methods freely because I like helping other traders and also to save people from giving their hard-earned capital over to gurus, scamsters, and punks. I see it as my ethical obligation. We're all in this together.
i applaud your good heart as i remember how hard it was as being a beginner..blew your accounts so many times till you dont remember when was the last time you blasted you account sky high..buy silly and not workable method...pay money and wasting time to hear from a guy talking about startrek formula and how incredibly he to beat the market and etc etc.

helping others make us feel good and for some reason gave us something to do to escape the loneliness for being a trader. however, i think it depends to who you share your method..share it openly in the net will benefit some quarters who dont trade (which may do minor alteration) but sell or charging others money to learn your method which he himself does not entirely understand how it works.

wish you all the best in your life and trading,

korn_trader
........... have nothing to say..........
  • #30
  • Last Post: Feb 1, 2013 4:03pm Feb 1, 2013 4:03pm
Talk about 'Law of Diminishing Returns'

If everyone were to use the same 'method' a time comes when the market shifts and thereby all who are using the method intactly begin to lose. Same goes for other day to day businesses that promise great income but as soon as it becomes crowded there seems to be so many skilled personnel fighting for limited chances.

Just the same ol' story
Living the life of the decisions I make
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