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Just my .02...
I am trading a porfolio of models that I developed--some developed as long as 7 years ago, some more recent. I have been trading for a living first discretionally (flow, fundamentals, technicals) and now completely quantitatively for almost 15 years now, and would like to use my own experiences to highlight the problems with leasing a black box.
It took 3-4 years of trading systems before I was able to have the discipline to follow them correctly. People that don't trade do not understand how hard it is to follow a system when you are going through a drawdown. Trading has a humbling way of making you do stupid things, like violating system rules at precisely the wrong time. Now, I can follow my models without a second thought, but that was not always the case. I have been able to develop the discipline and comfort level with my systems to implement them correctly. THIS COMFORT LEVEL WOULD NOT BE POSSIBLE IF I DID NOT KNOW THE SYSTEM RULES. I guarantee that (for me, anyway) it would not be possible to trade a black box through a difficult drawdown period.
Granted, there are valid reasons for someone to want to sell a system vs. trade it (and not enough capital is the kiss of death for any trader) but it would take too much blind faith for most people to trade a black box through the tough periods. The system being sold would have to have an incredibly low level of volatility in the returns to be followed effectively.
I would be willing to bet that well over 50% of the people that purchase commercially available systems that are PROFITABLE on a long term basis still wind up losing money trying to implement them.
-Seth
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