Quote:
Originally Posted by Henry
Are you a proffesional trader? :D It seems that the guys who make money have a rigid set of rules by which they trade. There are a number of reasons for this and the most important ones seem to be that they have a strategy that works - for them anyhow - and the rules remove the emotions from trading.
Now I wonder about an apparent conflict. If proffesionals trade by a rigid set of rules, it must be possible to program an EA. Why then do you think so few EA's are profitable? It just does not make sense! The only explanation is that the really good guys don't give their strategies away and the guys who sell EA's are not good traders at all and attempt to supplement their income by selling these little programs.
Your ideas on this?? Are you a full time trader?
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Henry that is a great question.
Yes, I am a full time trader. So I guess you could call me a professional.
It has always been my contention that any trader can come up with a system that is 80% as effective as the best trading system ever developed. This of course is not merely my own contention but that of Richard Dennis, the developer of the "turtle program" that I'm sure you are familiar with.
The premise of your question implies that most EA's don't work. Since I have never used an EA I'm not sure if that is true or not. What I am sure of is most EA developers pray on greed. They market to traders who are failing and then attempt to sell them on the promise of “riches while they sleep”.
What most fail to realize is they are losing money not because they don’t have the magic system, but be because they lack the emotional control and education to follow any system. (profitable or not.)
But, let’s assume you are right and most EA’s are flawed. Keep a few things in mind the next time someone promises to sell you an automated system that will make you millions for the low price of $99.
1. If the system is so good, why not charge a thousand dollars? If the sellers product works he is obviously a millionaire. He can sell the product for whatever he wants. One might claim it is about affordability, but then why not sell it for $1 or better yet for free. If you have a million dollar system is it really about the money?
2. Why not sell the rights to the system to a large fund or institution? If the EA holds up under scrutiny these firms would pay millions to control a product that produces the kind of returns most claim.
3. Why not raise money on your performance and start your own fund? You’d be the most profitable fund on earth.
4. I am a trader and educator. Many, many people ask me for performance data. I always refuse. It is a double edged sword. If I don’t provide the data they say I am being dishonest and hiding my losses. If I provide the data people ask, “how can I ensure you are not fudging your numbers”? I can’t win. The fact is, there are a million ways to fudge the numbers if someone wants to be dishonest.
My final word on EA’s. Be very careful. The FOREX industry is fraught with scam artists and greed mongers who will sell you the keys to the kingdom, 50 dollars at a time. But that does not mean there are not good systems out there for someone with the discipline to follow them.