I develop a lot of my own systems but I have in the past and still do use systems that I've purchased. Maybe I'm just lucky or maybe I do far more research than most but all of my purchased systems have consistently made me money. It takes a certain personality type to trust and properly execute a system. I think the number one reason people fail even with good systems is that they take the system but then apply their own discretion to it and take only some of the trades, take profits before the system signals, etc. If you are going to trade a system then you must never intervene. Most people also tend to stop trading a system at the absolute worst time when it is in a drawdown and then it recovers after they've stopped. System trading is definitely not for everyone and probably only for a few but very little of it has to do with a lack of tradeable systems available publicly. If you understand the system development process then you can talk to a developer and quickly know whether their systems are worth looking at. One critical thing that is often overlooked is that most of the advertised systems are only single contract systems and while some are OK they are usually not worth trading. Money management is 90% of a good system and thus should be a top priority when looking for a system. If it includes position sizing algorithms and initial risk assesment then it is much more likely to be a good system. Someone should also understand that most systems only work as expected with proper diversity and thus proper capitalization. You need at least 30,000 to trade most systems and I personally would recommend at least 75,000 - 100,000. So basically my point is that with careful selection, the right personality, and proper capital you can make a very good living trading commercially available systems. Most people go into without all of these and thus fail just as most people fail at discretionary trading.
Has anyone made consistent trading profits with a purchased system?
- Thread starter Thunderdog
- Start date
This is a great thread idea. There have been too many posts to count here on ET that have dismissed bought systems as unprofitable. However, there is usually a healthy dose of cynacism attached, and this often leaves one questioning the objectivity of the poster. Also, nobody, obviously, has tried them all, so no one opinion can be taken as gospel.
If this thread gets enough responses from system purchasers, we'll get a fair idea of what's actually going on out there.
Good going Thunderdog.
Regards,
chaos
If this thread gets enough responses from system purchasers, we'll get a fair idea of what's actually going on out there.
Good going Thunderdog.
Regards,
chaos
Why not share with us the name of these profitable systems that you purchased and then used, exactly as instructed, to make consistent trading profits? In this way, interested parties can do their own research and draw their own conclusions. I, personally, will not be researching any systems for sale, however, it would be of benefit to those who may be interested despite the odds.
Going forward, it would be useful for respondents to this thread to identify the bought systems they used and to comment on why they think the system did or did not work (i.e., did or did not follow the system as instructed, etc.). Details on any subsequent interaction with the system vendors would be useful (i.e., request for assistance, refund, etc.).
I still believe that the overall response will be overwhelmingly sobering. However, my own biased opinion is unimportant. I look forward to your responses.
the only system I ever purchased was INDIGO...thought it was a license to print $$$...did there seminar, got a broker to just trade there signals....designed and optimized robust systems...then the market turned....drawdowns became horrendous
Back to the drawing board....found a mentor....learned about the strength of trends, and risks of coutertrend trading....have since designed many "systems" and use First Alert for monitoring market behavior....some systems are purely mechanical, and the more robust, volatile ones are really methods....only one has been back-tested....
I think a good mentor, and proper risk management, will beat any system out there
Back to the drawing board....found a mentor....learned about the strength of trends, and risks of coutertrend trading....have since designed many "systems" and use First Alert for monitoring market behavior....some systems are purely mechanical, and the more robust, volatile ones are really methods....only one has been back-tested....
I think a good mentor, and proper risk management, will beat any system out there
I also believe that the majority of responses in this thread will be from people that have failed with systems but I believe it will be mostly due to the reasons I mentioned and less because of the systems themselves.
Also, I would post the systems I use but that would simply further the problems I mentioned. Researching and becoming intimately knowledgeable about a system is the first step in finding a good system. Also, the system you trade has to fit your personality or else you won't be able to trade it psychologically. The systems that I trade wouldn't be right for someone else just because they are right for me. If anyone needs advice or wants to inquire about a specific vendor via PM then I would be glad to help in any way possible. There are no holy grail systems out there but there are quite a few worth trading. I have no real interest in trying to convince anyone that good systems exist because I already know that they do and they are making me money. Each person must find what works best for them and if your highly skeptical of systems then you will probably never be able to trade one successfully because at the slightest problem you will interfere and let your discretion take over.
Thank you for your input. However, by modifying the system you have changed the game. It is entirely possible that you are a trading genius who saw a flaw in a system and then corrected it. If so, then it is presumptuous for others to assume that they could do the same. Therefore, I think it would be more practical to refer to the use of bought trading systems as they were intended to be used by the vendors who sold them. Only then will we have a "clearinghouse" of useful and usable information.
1 / Not really . System was most profitable in soybeans, but I use it for Bonds exclusively , I have shortened time frame from daily to 30 min and added LRL ( drawn by the hand ) which at that time was not available on charting packages .
2 / Thanks for the thought but I am definitely not a trading genius. I specialize in improving other people trading methods and I am damn good at it .