If you developed a highly efficient system, would you share it?

[columbus]

Ashish,I liked your analogy.

Plz consider that both 'Sachin' & 'Kambli' where very good friends & 
both watched each others ball by ball methodology of tackling from 
the opposite side of the crease,still one is earning by Dancing in TV 
& the other through 'Cricket'.

 

[Flock]

I have some doubts. Would be greatful if anyone can clarify.

First is that as per my understanding all systems have an entry here and exit at target type system. Even in Saint's there is aggressive position sizing. Why would one ADD buy at a higher price rather than buy all at the initial lower price? IF the trend has not given any indication to continue, why ADD at all. IMHO everytime we ADD, it's because our exit price has speculatively risen.

Second, isn't that all systems are trend following? IF you know that trendy long moves occur in the market, why not aim to ride them? IMO there are only two type of systems: trend following and trend-exhaustion based. The latter type provide an early entry at the risk of being chopped out more often.

Last, which exactly will be the type of system that should not be shared? As per my understanding, a trading system is not merely a formula or piece of code , but a methodology. For example if slippage increases to such a level of concern than the system must adapt to the new scenario. When adaptation (or behavior modification as mentioned in Phantom of Pit) is such a important characteristic of trading why fear it all? Why not share it with few people and see whether you can stand new competition?

regards
Nikhil.

Will try to with what little knowledge I have:

Besides trend following systems we can have a strategy which tries to get say 7-8 points from our entry (A scalping setup). In this case if too many followers are there slippage will eat into profit at both entry and exit. After some time system may cease to work, because people will start exiting before target. (In theory).

In trend following systems the reversal in the market direction is never caused by the true participants of that system but by someone else. In such systems exit is due to a pivot crack or trendline crack which is caused by other people's actions. Hence such systems tend to benefit by more followers.

In my posts above, by trend following I meant systems where we hang on to our positions till a reversal is confirmed. I am not talking about the direction of the initial entry whether with the trend or counter trend.

 

[AW10]

First is that as per my understanding all systems have an entry here and exit at target type system. Even in Saint's there is aggressive position sizing. Why would one ADD buy at a higher price rather than buy all at the initial lower price? IF the trend has not given any indication to continue, why ADD at all. IMHO everytime we ADD, it's because our exit price has speculatively risen.

Any trade has maximum risk at the time of entry. Once trade is placed, it has probability of 50 - 50. No analysis is 100% perfect. but once mkt confirms our analysis and trade moves in our favour, the risk in trade reduces.. so one can afford to ADD on to the position. It confirms to trading axiom - ride the winner, and cut the losses. Adding on to winner is sensible way to get best from your trades that are performing. If whole position is taken in first entry, we will be carring maximum risk.
There are one in - one out systems. mainly channel trading system that buys near support and exit near resistance.. In those system, there might not be any chance to ADD.

Second, isn't that all systems are trend following? IF you know that trendy long moves occur in the market, why not aim to ride them? IMO there are only two type of systems: trend following and trend-exhaustion based. The latter type provide an early entry at the risk of being chopped out more often.

No. There are many variety of systems. With my limited knowledge, I know that there are systems falling under TFllowing, Anti Trend, Volatility based, Channel based, Range breakout, pattern based, seasonality based, scalping etc category..

I have already given my views on this topic and still I stand by that. It is human nature that we don't care for FREE stuff. So people who are serious about trading will certainly put the effort (i.e. pay the price by their effort) and develop their system (and I will support them as much as I can, absolutely).. How many free ebooks we read competely but we will read a lot more of a newspaper (knowling that the life of the news is not more then few days) where we pay just few Rs.

Happy Trading.

 

[uasish]

Addition is where you make Wealth,any addition (which i have recently started after watching Saint for years)i normally do in 3:2:1 basis so my Avg acquiring cost always is well below the prevailing Price.
Suppose i bought 100 @ 10.00 & fortunately Price moved to 12.00 & still chances of going up now at 12.00 i buy (100 / 3 = 33.33 *2 = 67.00) so my cost even when i am buying at 12.00 becomes only 10.80,like wise the addition goes on .
Actually this Suits my mental make up.

 

[Niks]

Will try to with what little knowledge I have:

Besides trend following systems we can have a strategy which tries to get say 7-8 points from our entry (A scalping setup). In this case if too many followers are there slippage will eat into profit at both entry and exit. After some time system may cease to work, because people will start exiting before target. (In theory).

As per my understanding a scalping system designed to gather just 7-8 points on NF cannot use MACD/RSI/ WOlfe waves or such analysis. For microanalysis it needs order book data or atleast TBQ &TSQ. I had a chance to meet few pro scalper and as I could see a good part of their edge came from lightning fast execution(not available to someone on retail end i.e. followers). Again unable to understand how they can loose their edge by followers. It still looks like they can use their followers as scapegoats.

Any trade has maximum risk at the time of entry. Once trade is placed, it has probability of 50 - 50. No analysis is 100% perfect. but once mkt confirms our analysis and trade moves in our favour, the risk in trade reduces.. so one can afford to ADD on to the position. It confirms to trading axiom - ride the winner, and cut the losses. Adding on to winner is sensible way to get best from your trades that are performing. If whole position is taken in first entry, we will be carring maximum risk.
There are one in - one out systems. mainly channel trading system that buys near support and exit near resistance.. In those system, there might not be any chance to ADD.

Yes. All I want to understand is how followers can lessen one's edge.

No. There are many variety of systems. With my limited knowledge, I know that there are systems falling under TFllowing, Anti Trend, Volatility based, Channel based, Range breakout, pattern based, seasonality based, scalping etc category..

I have already given my views on this topic and still I stand by that. It is human nature that we don't care for FREE stuff. So people who are serious about trading will certainly put the effort (i.e. pay the price by their effort) and develop their system (and I will support them as much as I can, absolutely).. How many free ebooks we read competely but we will read a lot more of a newspaper (knowling that the life of the news is not more then few days) where we pay just few Rs.

On a deeper level there are only two type of systems: Trend following eg. channel based, range breakout, pattern based seasonality based.
and Trend exhaustion based eg. top/bottom fishing and reversion-to-mean. Why would anyone like to trade against the trend (anti-trend)? Maybe I need to unlearn.

It finally seems to me that the main reason people would not like share their knowledge for FREE is because they wo'nt get enough credit for sharing. People tend to give more importance to stuff they pay for.

PS: not intent to debate but such interaction increases my understanding about trading.

 

[Jitendra Togadia]

Hi,

In an unrelated thread, I read about a seemingly knowledgeable person claiming that he/she has designed a system which is 95% efficient, but would not like to share further details (with all due respect).

In my experience, Saint's way of sharing his knowledge has made me to truely believe the saying "Knowledge is power and knowledge shared is power multiplied". And below is my opinion:

The advantages if you share:
1. Its still not 100% efficient and has a scope for improvement. Others can see where you cant see and will probably make it more efficient and share it back to you. Like an open source software
2. More people following one system will make it little more efficient.
3. You will get famous
4. You could be another leading the torch for many

Disadvantages:
1. If you are in a business of making money by giving tips, the system becomes your trade secret and should not be shared.

I am not asking "if it is considered good or bad to share" kind of question, I sincerely dont want to start a flame here. My question is:

If YOU developed a highly efficient system and you are not making money by tips, would you share it?

Please let me know your opinion.

Kiran

Interesting and a thought provoking question. Wud i? probably not. everybody wants to make money for themselves first. if my method is successful and i have already made a decent amount of money, i wud most certainly share.

 

[ethan hunt]

Pros of sharing: More people run after the same stock at same level, as soon as entry is triggered massive moves can be expected.

Cons: Over a period of time the scale tilts & the followers become breakout fail traders & try to trap other traders by taking opposite positions.

Eventually the equilibrium establishes & slowly the system looses it's edge.

Then search for a yet another holy grail begins ...

 

[onlinegtrash]

@kiranb

This old thread anyways... here is my thought.

People in the thread completely miss the point when it comes to sharing.

A person will share if it's profitable or if he feels it's fair or at least if he feels it won't hurt him.

Most successful traders don't bother to share anything because they feel it's very unfair to give away something valuable for free while the recipient is 100% parasite and never was there with the trader when he was struggling and losing.

www.youtube.com/watch?v=-KSryJXDpZo

The math goes something like this: I give the fruits of 5 years of work, so what he is giving me back?
if answer is 'Nothing'... most traders feel it's very unfair deal, esp. if they see you as their equal. It has nothing todo with 'pros' and 'cons' and strategy losing edge etc etc.

A well established trader after securing his position in dominance hierarchy, who sees the struggling traders as young kids (and no threat of status competition) would not mind giving a helping hand occasionally. These people are 'secure in themselves and in generous mode', typically warm-hearted-guru-type. When 'the student' can outperform 'guru' and make him feel insecure probably the guru may curl back into his shell and won't help 'the student' to climb up the 'status hierarchy' above him... then the student is on his own!

After living so many years on this earth, after seeing so many ups and downs, after seeing all the ego/dominance/status games and pointless struggle of all these things, a person may become 'guru attained nirvana type'. These are the best type people on earth and others are growing towards this stage, most won't reach that level I guess.

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btw no one becomes a successful trader by learning a method, the magic is in 'becoming'. i.e learning is cognitive part and 'becoming' is behavioral part.
So, expecting some one to share holygrail won't help much even if he shares his winning method. Most of good trading is no secret it's explained all over the internet.

 

[eagal]

Hi guys.

In my opinion. Any system does not give more than 70 % success rate over long time.

I think there is no such system which will give same results for two traders because Trader is the key element in trading system. Our emotions act.

I am trying to control my emotions from the starting. My system giving good results for me but sometimes my emotions work over me. Yesterday also I missed the huge move of more than 150 points in CRUDEOIL because of fear of loosing 10 more points.

That's why I think When we achieved our psychology right for trading we can manage with simple system also. There is no requirement of advanced strategies.

 

[ramshirsath]

1 stop reading various articles on web it will confuse u 2 stop watching business channels u will become emotional 3 decide one level(refer fix price for that day )
if nifty goes up buy with suitable sl or vice versa

u can take any ref point say 34 ema or 55 or 110 sma ema tema any value
stick to the one method honestly ans shamelessly definitely money is there.