sharing your system

[Don4]

I have seen this posted on other forums but i wanted to get your opinion.
Does sharing your system hurt it ?

[Don4]

Sorry,could someone move this to general discussion.

[dalby]

to some extent... yes. an edge that is widely exploited ceases to exist. the market is the sum total of all trader decisions.

it's a much quicker adjustment to arbitrage opp's than more general setups.

remember the SOES bandits?

But in general, an edge exploited and widely disseminated faces dilution or extinction.

[MrPaul]

Originally Posted by Don4 I have seen this posted on other forums but i wanted to get your opinion. Does sharing your system hurt it ?

I do not believe that (IN MOST CASES) dissemination of a method or system leads to dilution in the marketplace. The Grey area lies within whether the system is highly programmable, but even then a system will not be used in the same market at the same time with large enough contract/share numbers by enough people every single time. A discretionary method is even harder to muddle into the marketplace due to the subtleties.

Many people have given out their systems/methods in books/courses and there hasn't (as far as I know) been a blunting of the edge.

Most market participants even given strict rules that mold an edge will typically destroy it by tweaking it and/or using it incorrectly.

Now another thing to keep in mind is that most people who think they have a fantastic magical edge that they just can't disclose really don;t have more than something that works well and makes allot of sense for them...

Thats my 2 cents on the subject.

[dalby]

i am of the belief that all the "trend followers" in the 90's helped lead to the eventual market adaptation that has caused trend following funds, etc. to be such serious losers.

i could give out my setups (not that i would) to 1000 traders and it would have next to zero effect on the dow. of that, I agree

[TinGull]

I think, too, that with the high turnover of market participants, an edge that might have been given out will still remain an edge because those participants who might use it won't use it in the same way as you...and will get discouraged and go on to find the "next best thing" in their quest.

As Paul said, a discretionary edge is a very difficult one for others to "get" even if you give them exact parameters.

[walterw]

hey guys, we can post here our complete "succesfull" strategy, and people will trade their own wisdom.... no way your wisdom will be exactly copied to the point of making it uselless.... on the other side the market its to big to have something like that happen, so please share your strategy ¡¡¡ jejejej cheers Walter.

[Soultrader]

Originally Posted by dalby to some extent... yes. an edge that is widely exploited ceases to exist. the market is the sum total of all trader decisions. it's a much quicker adjustment to arbitrage opp's than more general setups. remember the SOES bandits? But in general, an edge exploited and widely disseminated faces dilution or extinction.

Didnt the SOES bandits take advantage of a "glitch" front running market makers and selling it back to them? I dont think that would be called a system in my opinion. I dont think anyone will ever tell you a system that actually works. Why would they? 100% of the commercial systems are total bs in my opinion. Plus the systems that actually DO work require deep pockets. So I do not think they are in the hands of retail traders. I have received numerous emails ever since I started this board from system vendors. They are not selling the system to me but are trying to see if I was interested in promoting it to traders in Japan. I told every single vendor to piss off.

I am a discretionary trader and there is no secret to trading. There is nothing that cant be done discretionary that a system can do. My strategies will be traded differently by other traders... some may even be inspired to tweak it to fit their own style.

[dalby]

the SOES bandits were exploiting arbitrage opp's

i was distinguishing between the time it takes the market to adjust to arb opp's vs. just general setups.

arb opp's are much more prone to dilution and extinction than a system

trend following is a system that has (generally) ceased to work in stocks even over the recent bull run. The market has morphed from a "trendy" market to a "regress to the mean" market. Trend following funds have done pretty terrible over this last bull market cause they are stuck applying a 90's paradigm to a different market.

[Soultrader]

Theres an interesting comment made by James Dalton in Markets In Profile. He mentions alot of trend following systems lose money because they are unable to determine the relative stages of the trend. Is the trend healthy? Is the trend getting old?

Also he mentions that fund manangers using trend following systems follow price only. Since they do not view the actual profile of the markets, they are unable to determine if the trend is a continuation or a short covering.