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As in other consumer markets, what could work is an objective, hands-off
group that would test trading systems based on historic and RT data. Sort
of a "Consumer Union" model. They could publish their findings and rank
vendor systems for a host of criteria. Unlike the current group of
magazines, they would take no advertising and have no monetary relationship
with any vendor.
This would not overly impact vendors (expect those whose systems don't
perform) and would hopefully let traders know what to expect when comparing
systems.
Each review would contain statistics that had been refined over time.
Hopefully, with a discussion of max drawdown and optimization. Maybe even
in a searchable database.
Perhaps we should setup a Website and do it ourselves.
Jay Poswolsky
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> From: nwinski <nwinski@xxxxxxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: Re: GEN - Fighting Fraud
> Date: Tuesday, December 02, 1997 5:36 PM
>
> Brent Aston wrote:
> >
> > December 2, 1997
> >
> > Real Traders,
> >
> > I have a suggestion for all of us sapsuckers that have to try
and sort out
> > good Trading Systems, Programs, Information, and various offers. Here
it
> > is, when you get one of the above products that you are interested in
you
> > reply by offering about 10% of the asking price along with a guarantee
to
> > set up an account with X amount of dollars and to trade to the best of
your
> > ability that product for 3 to 6 months. As soon as net profits exceed
the
> > full cost of the product you simply pay for it. If the creators of
these
> > products have real faith in their creations they should have no problem
> > with this plan. If you have losses its no pay! (If they really have
guts
> > they should reimburse you.) If many traders did this I think it would
go a
> > long way toward fighting fraud in this industry.
> >
> >
> > Cheers,
> >
> Brent,
> In a perfect world this might work. But the world is inhabited by
> humans so things are not that simple.
> So let's pretend that Brent is a systems vendor with a great trading
> system that is right 75% of the time and a good win loss ratio. You tell
> Joe Customer that all he has to do is follow the system for six months
> and he will have the money to pay you. You call back in six months
> believing that he has followed the system and that he will soon be
> sending you a check. Surprise!! Joe Customer says that he went on
> vacation and missed that big move in the S&Ps and then his wife got sick
> so he missed the big profit Silver move. Hoever, he did do the porkbelly
> trade, lost the maximum risk of $500 and got disccoraged about 4 months
> ago and stopped trading your system. So, why didn't he call your toll
> free assistance line and talk to you or e-mail you four months ago? That
> is one of the great mysteries of the universe. Unless the burden is on
> the trader to perform, the vendor is not likely to get paid. What
> guarantee is there for the vendor that the customer will follow the
> system? NONE!! In fact, most people will find a way to either not follow
> the system or screw it up. It is only when the customer has a
> substantial stake at risk that the vendor has any chance of gettting the
> customer's undivided attention. And that only applies to the 5-10% of
> traders that have what it takes to be winners.
> The reputable vendors have to put up with the 95% of traders who
> would lose even if they had tommorow's chart today. Those losers look to
> blame their own inabilities on whatever "holly grail" they last
> purchased.
> Yes, there is alot of garbage being sold by trading system and market
> advisory vendors. But, even if 90% is junk that is better than the
> batting average that general trading public has demonstrated for trading
> futures.
> So, there are two sides to this story. Most vendors leave much to be
> desired, but so does the trading public in the capacity to use these
> services or products to make trading profits. Brent, I don't think you
> would want to take the other side of your proposal for very long.
>
> Balancedly,
>
> Norman
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