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How come nobody likes to share?

  • Post #1
  • Quote
  • First Post: Aug 31, 2006 4:59pm Aug 31, 2006 4:59pm
I was thinking today, and it occured to me that most traders are very unwilling to share the details of the systems they use to trade. Why is that? And I must admit I'm just as guilty as anyone else. It seems to me that this kind of thinking is self-defeating. I mean, if a large number of traders were trading your system, using your signals, wouldn't you be more likely to be on the right side of a movement in the market?

Why don't more traders stick together? I mean look at what is happening in the Firebird thread. The system is free to all who wish to have it, and a good number of traders are working together to improve it, the results look promising. Why don't more traders do that?
I suppose some of the reasons are:

1. the system is going to be for sale
2. The system takes advantage of a undiscovered inefficiency in a market and it will dry up with more people using it.
3. Some people are selfish.
4. Some people are indifferent.
5. It is too complicated to explain the system.
6. There is too much discretion involved to pass to some one else...


There are probably more... LOL, Scott
You make some good points, but I think it just comes down to all people being self-interested. We all want to make money, and so if we have a system that does make money, why should we share it? Why should we let some other guy profit off of our hard work? Also, I think that some traders think their system might become less effective if it is leaked (maybe?). I don't know, it doesn't make sense, but that's just the way it is. (Maybe FF can change that!)

andersenws
"Youth is the trustee of prosperity." - Benjamin Disraeli
Quoting SisterCurare
I was thinking today, and it occured to me that most traders are very unwilling to share the details of the systems they use to trade. Why is that? And I must admit I'm just as guilty as anyone else. It seems to me that this kind of thinking is self-defeating. I mean, if a large number of traders were trading your system, using your signals, wouldn't you be more likely to be on the right side of a movement in the market?

Why don't more traders stick together? I mean look at what is happening in the Firebird thread. The system is free to all who wish to have it, and a good number of traders are working together to improve it, the results look promising. Why don't more traders do that?
Hi sis,
Kolachi Method is open for all and I have not hidden anything at all.I used this method successfuly for one year and then decided to share with others.
I am proud of the fact that I am not selfish, mean, greedy or feraful of other traders.
I believe what God Almighty has written in my fate, no one can snatch from me.
jut humble views,

kolachi
  • Post #5
  • Quote
  • Edited at 5:40pm Aug 31, 2006 5:13pm | Edited at 5:40pm
I dont believe that sharing a system caan help you to be on the right side only because all people would start and sell based on same signals.
I believe we all 'little' dont have any kind of influence on prices

Thanks
Quoting smjones
2. The system takes advantage of a undiscovered inefficiency in a market and it will dry up with more people using it.
I suppose you kind of see that with news trading, the lengths that brokers go to in order to combat it.
Quoting SisterCurare
I mean, if a large number of traders were trading your system, using your signals, wouldn't you be more likely to be on the right side of a movement in the market?
this is tricky, i didnt understand it for years.

basically, the quesiton is, if everyone buys when the 20ma crosses the 50ma, wouldnt that move the market in your favor? the answer is yes, but that doesnt mean the more the merrier.

the problem comes on the entry and the exit.

first, if a lot of people try to buy at the same time, you will get a worse entry then if you were the only one buying. traders will start trying to buy earlier than the next guy (who is using same system), inflating the market temporarily, and creating false signals. for instance, if the 20MA is just about to cross the 50, and the early guys start jumping in, that will actually make the 20 cross the 50, which would be a false signal.

second is the exit. if you buy, you gotta sell at some point. and nobody wants to be the last one selling!!! so it will be a race to see who can get out of the position the fastest, before everyone else starts dumping on them. this again will wreck havoc on the system.

my example uses a 20ma/50ma cross, which is way oversimplified, but it illustrates the point that mass use of a system distroys its value. and thats why i and others dont talk about system details.
Relax and be happy.
Yea, I think you may be right. That would be an inefficiency that the traders found and now the brokers are closing it up, because they would be the loser.

Kolachi, That is a very good attitude to have... thanks Scott


Quoting SisterCurare
I suppose you kind of see that with news trading, the lengths that brokers go to in order to combat it.
There are a number of reasons for not wanting to share. Many of them have already been covered in this thread. Most people want to keep their "secrets" private. That's just the way people are. We hoard and hide away stuff, and try to get an advantage and envy what our neighbor has. The funny thing is that most of the "secrets" that people guard so closely, are actually public domain ideas, and most of them lose money. Most of the ideas that are shared on forums like this are incomplete or need something else to help them turn a profit. That's the reason most people are here - to find an advantage that will help them make a buck.

You have to realize that fills or market liquidity is a scarce commodity. There is not an infinite amount of size at each price. If 1-3 people are trading at a number, there won't be any slippage. If 1-3 thousand are all trying to get filled at the same price, you will see common herd behavior. Some will jump in front a pip or two to beat out everyone else. A liquidity vacuum will be created at these prices, and the majority will get slipped several pips. Look at what happens on news. Liquidity dries up and prices jump all over the place as everyone is trying to chase the bouncing ball.

Once ideas start getting well refined and highly profitable, there is an incentive to hide that away as it is a trade secret. Letting others know about it (if it is highly profitable) is just stupid because it will hurt your own ability to make money off the strategy.

That being said, I think sharing works best when you have individuals with common goals, and common analytical skills who are willing to work for the common good. So often greed seeps into these arrangements, where one party will attempt to take short term advantage of another and it falls apart. There needs to be a true partnership and mutual trust for these sharing arrangements to work out to mutual benefit. I'm all for sharing under these circumstances. Sharing has been very helpful to the development of my ideas and I've made several great associations over the years as a result.
Sister,

I think the responses so far are all correct in some form or fashion. I just want to add one more.

I think the one thing that keeps me from sharing my ideas is the questions that I'd inevitably receive that I'd have to answer twice, three or even four times before the mass understands it.

Not that I don't want people to understand the system, but I look at it like this...if someone were to share a system, then he/she has to be prepared to answer my questions if I don't understand it...otherwise, it's almost pointless. Most times, system trading is art rather than science. How you and I recognize patterns may be extremely different, and trying to convey that to someone else, while beneficial to your understanding, can be quite frustrating.

It's easier to talk about the things that you DON'T do (which money management and psychology start creeping into this category) than the EXACT science of what you actually do.

Make sense?
Quoting pipscooper
There are a number of reasons for not wanting to share. Many of them have already been covered in this thread. Most people want to keep their "secrets" private. That's just the way people are. We hoard and hide away stuff, and try to get an advantage and envy what our neighbor has. The funny thing is that most of the "secrets" that people guard so closely, are actually public domain ideas, and most of them lose money. Most of the ideas that are shared on forums like this are incomplete or need something else to help them turn a profit. That's the reason most people are here - to find an advantage that will help them make a buck.

You have to realize that fills or market liquidity is a scarce commodity. There is not an infinite amount of size at each price. If 1-3 people are trading at a number, there won't be any slippage. If 1-3 thousand are all trying to get filled at the same price, you will see common herd behavior. Some will jump in front a pip or two to beat out everyone else. A liquidity vacuum will be created at these prices, and the majority will get slipped several pips. Look at what happens on news. Liquidity dries up and prices jump all over the place as everyone is trying to chase the bouncing ball.

Once ideas start getting well refined and highly profitable, there is an incentive to hide that away as it is a trade secret. Letting others know about it (if it is highly profitable) is just stupid because it will hurt your own ability to make money off the strategy.

That being said, I think sharing works best when you have individuals with common goals, and common analytical skills who are willing to work for the common good. So often greed seeps into these arrangements, where one party will attempt to take short term advantage of another and it falls apart. There needs to be a true partnership and mutual trust for these sharing arrangements to work out to mutual benefit. I'm all for sharing under these circumstances. Sharing has been very helpful to the development of my ideas and I've made several great associations over the years as a result.
I am honored that your first post, as a member of Forex Factory since Febuary 2006, was on this thread.
Quoting merlin
... my example uses a 20ma/50ma cross, which is way oversimplified, but it illustrates the point that mass use of a system distroys its value. and thats why i and others dont talk about system details.
I suppose I was aware of this on some level, but you have shed light, and I do see your point.
Quoting smjones
Yea, I think you may be right. That would be an inefficiency that the traders found and now the brokers are closing it up, because they would be the loser.

Kolachi, That is a very good attitude to have... thanks Scott
I can tell you that my great broker doesnt let me trade the news anymore. Thats not a big problem because Im taking out of their pockets money anyway, and with a great pleasure but I only think that these GUYS...whoever is behind them, would like you to go out of them after you left them all the money , and will try to make this happen in all possible ways.
Trucco, I am very sorry, but I do not understand what you are saying here..

but I only think that these GUYS...whoever is behind them, would like you to go out of them after you left them all the money , and will try to make this happen in all possible ways.

Are you saying they will make every effort to seperate me from my money?<!-- / message --><!-- sig -->

Thanks Scott
Quoting smjones
Trucco, I am very sorry, but I do not understand what you are saying here..

but I only think that these GUYS...whoever is behind them, would like you to go out of them after you left them all the money , and will try to make this happen in all possible ways.

Are you saying they will make every effort to seperate me from my money?<!-- / message --><!-- sig -->

Thanks Scott
Sorry Scott, I quoted the wrong post
Indeed my post has no relation to yours
I wanted to add to sistercurare post

I was referring to the fact that sharing a system, which ever it is, news, or not news, won't help you in moving the price in your way, and the side effect will just be that a 'working' method just will start to dont work soon or later, or maybe will never work apart of the creator, which for sure will be missing parts and discretion which can't be explained.

News playing was just a very visible example of a 'system' , a very simple system..which is not working for the majority of us, because THE GUYS...would like you to go out of them with an empty pocket
My personal opinion is that most successful traders don't share their system not because it is a "secret" one or because they just found a new inefficiency in the market. And not even because they are selfish or afraid that their method would stop working if more people used it. Well, maybe some of those reasons can be valid at some point, but none of them is the main one.

I strongly believe that the fundamental reason is that all these traders use much more discretion than they realize or are willing to admit. Even the ones whose trading is mostly based on technicals or a so called mechanical system do not follow that system blindly. If they did, they would lose. The best proof is the constant failure of all expert advisors, at least after a while - what better proof do you want that no precise set of rules is good enough to win? The market is constantly changing, and the top traders, the few that make money year after year, are capable of understanding that change and tweaking their system to fit the new conditions. When such a system is shared on various forums you see that the author doesn't take all its signals, or takes signals that aren't there yet. When you ask him why, you will hear things like "you know, because it's GDP news in one hour", or because "yesterday we already had a big move", or because "the other correlated pair is moving in the other direction".... The system in fact becomes just a pretext for opening and closing positions, and all the others trying to follow the same system would lose, because it's not the system making money, it's the trader who knows when to obey those rules and when to break them. Why do we hear things like "I knew I had to short the pound, so I just waited for that cross to happen" and the next day "yes, the cross occured, but it wasn't the right moment to sell it because...<SOME here reason>". Why does it take so long to become a good trader? If it were just a system, anyone could be a great trader by simply reading a 3 page pdf explaining the rules of a good system, in 20 minutes. And you all know that it takes years, not 20 minutes. It seems to me that most decisions are in fact the result of some sort of very complex subconscious knowledge, integrating a huge number of technical and fundamental factors resulted from experience and natural talent.

Since I am an International Master at chess, I would like to make an analogy. Many times I reach a complex position and almost without thinking I know the right move. Another strong master would also find it, just as easily. Sometimes it is very difficult to explain to a lower rated player why I played that move. If I try to come up with some general rule or concrete variation to prove my point I would be in fact lying, because the truth is that I knew the move was right without trying to follow any of those rules or calculations. It's simply the result of seeing/studying/playing thousands of similar positions in the past, and learning from them. Not because I am consciously trying to memorize that pattern, I am not even aware that I know it, and cannot explain it in words. At some level the brain would recognize it and act accordingly, selecting the best move. I believe that same thing happens after years of staring at charts, reading fundamentals, placing trades and all the rest. You begin to "know" what to do, what works and when. And that's why many people say that trading is an art, not a science. I agree 100%. It also explains why this myth regarding great trading systems or methods that successful traders refuse to share is just that, a myth.
Quoting LazyPawn
Since I am an International Master at chess, I would like to make an analogy. Many times I reach a complex position and almost without thinking I know the right move. Another strong master would also find it, just as easily. Sometimes it is very difficult to explain to a lower rated player why I played that move. If I try to come up with some general rule or concrete variation to prove my point I would be in fact lying, because the truth is that I knew the move was right without trying to follow any of those rules or calculations. It's simply the result of seeing/studying/playing thousands of similar positions in the past, and learning from them. Not because I am consciously trying to memorize that pattern, I am not even aware that I know it, and cannot explain it in words. At some level the brain would recognize it and act accordingly, selecting the best move. I believe that same thing happens after years of staring at charts, reading fundamentals, placing trades and all the rest. You begin to "know" what to do, what works and when. And that's why many people say that trading is an art, not a science. I agree 100%. It also explains why this myth regarding great trading systems or methods that successful traders refuse to share is just that, a myth.
High Pawn,
I would agree absolutely with you in the above example.To explain the same phenomenon I usually give example from Martial Arts.If a grand Master or Black belt holder tells every thing to general public, they will not be able to perform exactly like him unless they put in so much time in it.
It is not a matter of hiding but constant struggle till one succeeds.

kolachi
Consistent forex traders don't share their strategies because like most experienced traders, they know that even if they did share their strategies, it wouldn't help, because most people don't have their head screwed on right when it comes to the markets...

It really is as simple as that. Why should they waste their time?

If I want to mentor someone, it will be done in person with that person, and weekly meetings will be done to consistently guide that person.
Mr. Trend
This question has been asked on this forum and others many times.

If you worked diligently over days, months, years and spent untold amounts of your own hard earned money to perfect something, anything, would you just give it away?

Does a company give their compitition their trade secrets....does one sports team give their play book to the team they are playing?

Trading is a business and as a businessman (and others just like me) my objective is to ultimately take your money from you, why would I tell you how I am going to do it.

The answer to the aforementioned question should have been obvious, most of the others have danced around it or did not know the answer themselves.

It may sound crass, but it is the truth.

xt
So many good points above. Scott's first post had me agreeing w/the discretionary conept, and LazyPawn did a great job of driving the point home.

I can say that the comradery here at the factory is heads above anywhere else i've seen except for some private forums i'm involved with where we are all commited to a single unified goal.

As stated by SisterCurare in the first post, what is taking place over at the Firebird thread is just short of unheard of interaction. I think this is due in part becuse there is such a desire for any involved to see FB become a working reality. I mean hey, one of my FB tests shows a profit of 1275 pips since this Sunday's market open all keeping within sound money management rules. The hunger for something such as even a quarter of this profit is enough to drive a motley crew into a rock group singing harmonies and working together toward a comon goal (sorry for the pun, i can't stand the group. that just came out of my hands as i typed).

Another example is what is taking place to a lesser degree in the SIDUS thread and it's offsprings. Hunger and drive toward the goal of gaining pips.

But i digress. It still gets down to discretion for much of the secrecy. And there is also, i believe for some such as myself, the fear of sharing some trading methodology that might work for myself becuase i've poured my personality (with all its depth and quirks) into the model, and if the other person fails with my model, am i partly to blame for their failure?

To Share or not to Share? Hummm.

Well i'll always do my best to share my trading ideas and doodles, cuz i'm a tweaker and experimentor. Who knows, maybe one of my "failures" will be someone else's success story?! I hope so!

Cheers,
Thom
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