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At 2:11 AM -0500 1/6/02, Igor Kaplun wrote:
>There is a lot of companies feel that this is the time to pop up.
>There will be many new trading programs at the spring, which will grow
>like mushrooms after the rain.
>
>I believe that there is a NEW ERA in trading software developing is
>comming up.
The market for such software is too small to justify a major product
development such as a TradeStation replacement would be. Lots of
smart people have looked at this. You just cannot make enough money
selling the software to justify the development cost.
The number of serious traders is not that large and the percentage of
those who can write programs is even smaller. Vendors have tried the
"drag and drop together signals to make a trading system" approach
but we all know that never works.
Omega made it by enticing newbies to part with their money with slick
TV ads and monthly payment plans, figuring that their customers would
wake up after a year or so and put the software on the shelf and not
bother them anymore. Unfortunately, the original software was clever
enough so that some professional traders kept using it and kept
bothering Omega for support and enhancements. Omega maintained their
"don't feed them and maybe they will go away" attitude anyway.
There are several good "small" programs such as Ensign, etc., from
basically one-man companies but they are not in the same class as
TradeStation.
But there clearly is a vacuum now that Omega has moved on to
whatever. It is clear that they are now in the "milk the cash cow"
mode and the cow is getting pretty old... (Perhaps they will wake up
and come back to their roots.)
I would suspect that the successor will be some tie-in to a service
such as a data provider.
Data-on-demand is a great concept but it requires more than just
gluing together old stuff. It is a paradigm shift - a transition in
the market. I can think of lots of things.
Picture being able to send your stock selection filter to the
provider and and having them search through thousands of symbols and
send you only those that meet your criteria.
Picture a system that would give you high-relative strength stocks,
stocks with analysts upgrades, stocks breaking above their 50-day
moving average - and all the ratings you can find in Investor's
Business Daily or any combination or weighting of them.
Maybe they could sell it bundled with data, and a trading system that
REALLY WORKED. Just add the user and he starts making money. Think
that would sell? It should be really easy using daily bars and could
let ma and pa manage their IRA more scientifically. Just thinking of
all of my retired friends who listened to the brokerage hype and
watched their retirement money disappear during the recent melt-down
really distresses me.
If they really want to get fancy they could even include some
intelligent asset allocation algorithms that would at least give
the buy/hold investor a fighting chance.
How about historical back-testing with good tick-level continuous
contract data on demand.
How about a clean consistent symbol naming convention to standardize
the mess we have today on all the exchanges.
How about some time resolution between one-minute data and tick data.
One minute seem like an eternity now days but who needs 400 ticks per
minute on symbols such as QQQ, ES, CSCO. Having 0.1 minute would be
OK or one-second would be overkill. Come-on guys, this isn't rocket
science...
I think people would pay a reasonable monthly fee for lots of these
capabilities.
The software will be the "razor" you get for free but the services
will be the "blades" where they make all the money.
Ah... We can dream...
Bob Fulks
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