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David,
A couple of thoughts.
You make the statement that "it is impossible to quantify actual data
to prove whether the more people who use a system, the less effective
it becomes." It don't think it is the system that looses its
effectiveness but rather the market that reacts to it. A good example
of this is the QQQ Crash System. It has recently been widely
published. The system, now that it has been published, is no longer
as effective as it once was. The system though has not changed but
the market has.
Consider next, the time frames during which you have tested your
system. To go back and simply test over a 25 year period really will
not tell you much about your system's performance. Test your system
over 5 year spans of the same 25 year period and see if the
performance is still the same. Next test over known bullish and
bearish periods. In recent history this should be easy to discern.
Remember also that a bullish/bearish period in the forex may not be
the same as in the broad market, so compare the two.
Finally, you should consider the idea of profit and loss. You should
look for maximal profit with minimal loss. Most systems are
considered good if they are profitable 50% of the time. That's really
no better than a coin toss. The difference though should be that your
profits will be considerably larger than your losses. Make sure that
you consider all of your operating cost as well.
If you really feel that your system is good publish or release one to
a couple of traders in return for their opinion. It would be nice to
have a complete system disclosure but as we have recently learned
from this group there are ways to password protect and date control
the system formula if that is your inclination.
Preston
--- In equismetastock@xxxxxxxxxxxxxxx, "David" <junk@xxxx> wrote:
> I was wondering what the broad consensus was on a trading systems
> effectiveness if it is shared by many traders. I have read various
> opinions but none seem to entirely answer the question. I know
that
> it is impossible to quantify actual data to prove whether the more
> people who use a system, the less effective it becomes. To a large
> extent, eventually if everyone is trading the same system then no
one
> would trade in the opposite direction and the system would fail.
But
> on the retail level such as systems like aberration and the like,
do
> any of you believe that the system loses its effectiveness? Not
that
> I plan on trading aberration, but I have developed some profitable
> long term forex systems which produce rather good linear equity
> curves over 25 years of historical data. I thought I might sell
the
> individual systems to raise additional capital, but not at the
extent
> that they might become unprofitable. Not to even think I would
reach
> that great of an audience, but I thought I would get some input
first.
>
> Regards,
> David
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