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Having worked with a few professional system designers, I would say they
fall into basically 2 camps: those who can "talk the talk, but can't walk
the walk"; and those who can DO, but lack the necessary capital to trade the
system correctly.
The first group have a lot of market knowledge, have built good systems,
etc. but fall down on their mental game. They simply can't trade well
Realize that many good systems actually win less than 50% of the time. In
fact, I could argue that 34% is about as good as you can get. Higher
percentages are usually only exploitable for short periods.
These guys are the ones that prefer others to trade their systems and many
times acknowledge doing so. Joe Krutzinger (sp?) may be a good example of
this group.
The other group is a bit more tricky in that they have blockbuster ideas but
the system drawdown exceeds their capital to trade it properly. They sell
system ideas to raise money to trade with. As naive as this may sound, I
fully accept it.
Why so? Because one common thing left out of most trading systems offered
for sale is a robust money management system. This is the REAL TRADING MONEY
MAKER. Since most systems LOSE on the majority of trades, this is the only
edge a trader can use to turn things in his favor (a good analogy is card
counting in blackjack). Without this key part, the system seller is really
just selling a market observation. But beware, this last group has more than
its share of con artists.
The best trading systems are so simple too, but we have a human tendency to
place value on complexity. No one will pay for a simple moving average cross
system based on just 1 indicator and 4 rules. But throw in 6 or 7 more
indicators and a couple of pages of rules and we'll all say that's worth
some money! Nevermind about robustness or performance degradation.
My advice is to spend time developing a good money management strategy
first, then apply it to a general market observation for you trading system.
As long a you have discovered an observation that wins more money than it
loses (not how often!) the money management system will keep you ahead.
regards,
Rick
Tokyo, Japan
-----Original Message-----
From: Lionel Issen <lissen@xxxxxxxxxx>
To: diamond@xxxxxxxxxxxx <diamond@xxxxxxxxxxxx>; MetaStock-list
<metastock-list@xxxxxxxxxxxxx>
Date: Wednesday, February 11, 1998 5:04 AM
Subject: Re: Why do trading gurus market services?
>Zane:
>
>Last summer there was a lively exchange on this very topic.
>
>I agree with the other responses that mentioned recognition, another factor
>is self promotion.
>
>If anyone had a superduper trading system, why indeed would they sell it or
>give it away for the price of a book or seminar? While the author(s) of
>books have to give some information to the reader or the course attendee,
>they probably don't/wont tell everything that makes the system work for
>them.......
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