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> First, why is it so hard to create a good trading software. I know that
> there have been a lot of them tried. Some on this list seem to know a lot
> about programing, why haven't some of you done the job?
>
Coming from the development background, I can tell you creating any
commercially viable, complex, shrink-wrap software takes A LOT of effort and
therefore A LOT of money.
First let's look at complexity:
For truly good trading software, most trader's want to be able to create their
own systems/indicators. For this you need some type of programming
language. So, now you're talking about writing an application (the trading
software) and a programming language (quite the undertaking! not quite as
bad if you can use something like VB and hook into it, but still big).
You're talking about continually updating charts. This requires expertise in the
area of graphics, which doesn't come cheap or easy.
And it has to be all things to all people. You need things for equity traders,
futures traders, options traders, etc. You need to be able to handle people
that want intraday and swing trading, and long-term investing. You have
people that want fundamentals and you have people that want technicals.
Data feeds are notoriously bad and your software has to be able to do as
much error correction on the fly as possible. You have to get the data, parse
it, decompress it, store it, and display it all instantaneously so the user can
see it immediately and their systems get the data immediately. Then you have
to be able to have drivers for multiple feeds because all feeds are not available
to all people and all feeds go thru "reliability cycles" (ie qfeed used to get
great reviews now it doesn't... eSignal used to get lousy reviews, now they're
good). So you have to program for being able to handle the different feeds
and the different formats of those feeds. If you could just use one feed, the
whole process of getting the data to getting it into the system could be
optimized, but with multiple feeds it needs to be more modular to handle
changes in the feeds and the software.
And it has to be fast, fast, fast. Any time you can shave microseconds off a
process can be a BIG boon when you have thousands of transactions coming
at you per second. And keep in mind it'll only get worse with decimilization
and market growth in general. User friendly programs and fast programs are
generally at direct odds with each other. Functionality and speed are usually
at direct odds with each other. A lot of programmers can put together good
screens, but it takes a special talent to be able to squeeze out those needed
microseconds and that talent is not easy to find or to recognize thru the BS
that is out there (even for seasoned project managers).
The software has to be tested, tested, tested!!! This is not a word processing
system, this is money on the line! Quality testing takes time and talent to
make sure all cases and extremes are covered.
And perhaps the biggest thing is that you have a "relatively" small audience
and in order to develop the software for everyone in that audience, you have
to charge big $$$ to make a profit. And not everyone wants to or can afford
to pay $$$. Some might, but not enough to gamble making that kind of
investment. And you should really be charging monthly support fees to handle
data feed changes which occur all the time.
The big boys (MER, JPM, GS, big hedge funds, Soros) have developed their
own in-house software and at significant costs, and believe me, if it's working,
they don't want to share it. This is true of anyone that has a package that'll
make big $$$. If the software can actually make the big $$$, you don't need
to sell it in TASC for $5K-$10K a pop. The big boys will pay you big bucks for
it. And even if the big boys did share their toys, keep in mind that it was
written specifically for their needs and won't have a lot of stuff which most
traders want. If you are talking about a customer base of 10,000 and every
10 people want "just one little thing", those 1000 little things add up!
And finally, if you have someonelike Omega that can sell software for $2000 a
pop or sell software/data for $100/mo and then make commissions on top of
that, how interested do you think they will be in putting effort into enhancing
and bettering their software if it's adequate to generate the commissions?
>From a business standpoint, their efforts should be targeted to where they can
get the most bang for the buck which is increasing your repeating revenues -
ie, commissions. And anything they can do to their online software which can
increase trades and therefore commissions for their online trading company
will get top priority. Think about it, if they come up with an indicator that goes
off daily and generates a 20% annual return for the trader and they come up
with an indicator that goes off 3 times a year and generates a 20% annual
return, as a brokerage, which one do you think they will develop for their
users? The first one as it will generate the most commissions.
> Second, why doesn't some programers or hackers crack TS and fix the
beast up
> and give it a new name and start selling an improved version maybe even put
> it in a different operating system.
>
Don't know much about cracking or reverse-engineering. As I understand it,
a lot of programs can be easily cracked. But to be reverse-engineered and
then modify and upgraded and enhanced? you're better off starting from
scratch. And then on top of that, Omega will eventually find out and hit you
with lawsuits and then what will come of all your efforts and expense? I don't
see any incentive there.
> Prosper
>
That's the plan.
Cash
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