reveal your strategy?

Quote from AaronCapps:

IMO, it comes down to competing for the same prices. If other people know your strategy, then they can and will place orders at the same time, meaning that you are in a race to be the first executed, or the first to place your limit/stop. Like another ET member said, in a thin market like the ER2, the extra volume could cause you to end up getting slippage. I can not think of much that would make me more aggravated then getting slippage on my own method because someone that is closer to the exchange got in a second before me.

Also i know of one time, when someone took another person's method and made their own company off of it.
The sad part is that he ended up doing a better job then the original.
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... from the source.

Great thread, at least we're being honest.

While there are other cases where a strategy may be leaked, it's probably only because the guy wants to front-run it, or it's a ruse to sell a strategy that doesn't meet any of the (listed, take your choice) profitable criteria.

Regards,

JJ
 
... from the source.

Great thread, at least we're being honest.

While there are other cases where a strategy may be leaked, it's probably only because the guy wants to front-run it, or it's a ruse to sell a strategy that doesn't meet any of the (listed, take your choice) profitable criteria.

Regards,

JJ [/QUOTE]

Great point, that would be the only benefit to leaking a strategy or method is if you had a way to constantly ensure you were ahead of the other people.
 
Quote from AaronCapps:

IMO, it comes down to competing for the same prices. If other people know your strategy, then they can and will place orders at the same time, meaning that you are in a race to be the first executed, or the first to place your limit/stop. Like another ET member said, in a thin market like the ER2, the extra volume could cause you to end up getting slippage. I can not think of much that would make me more aggravated then getting slippage on my own method because someone that is closer to the exchange got in a second before me...
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I've heard of such occurring with automation trading or mechanical systems.

However, I've never heard of such occurring with any discretionary methods.

Mark
 
Quote from NihabaAshi:

I've heard of such occurring with automation trading or mechanical systems.

However, I've never heard of such occurring with any discretionary methods.

Mark
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Sure Mark.

While you can't code the optimal trading of a really good discretionary trader most traders (definitely myself) have gone the path of developing a system that they can follow rigoursly (and I mean by-the-book) to achieve their trading results.

The reason for this is that (as many traders here have discovered/are in the process of discovering) ... good trading is all in your head.

Ultimately it is Psychology that plays the most important role to a traders success. I've discovered that while I may be able to beat my system if I override it with a discretionary decision, in the long runI'm better off just trading it and letting it be. The wins will far outweigh the losses (or any missed opportunities).

So if I can improve on my system, that would be great. Until then I'll trade the system I have (play the cards I've been dealt). And the same is true of the majority of traders out there.

Now, continuing with that analogy, it doesn't make sense to show my hand at the poker table, which is the trading equivalent of revealing your strategy, unless you have other reasons to do so which go beyond the playing of that individual hand (trading that particular strategy).

Regards,

JJ
 
Just a few examples of strategies where competition impedes performance with equities...

-OPG. As much as Don says it isn't affected, i'm sure OPG was a lot better in the late 90's when there were only a few trading it. It makes sense too...when there are 40 guys putting bids in pre-market that stock is not going to open as low as it could have with 5 bids.

-Same idea with those that envelope NYSE. With all the automated systems for automating the stocks became thicker, and great prints became few and far between.

-Playing crossed markets, especially pre-market was good for a while 5-8 years ago (before ECN's learned to cross eachother) but liquidity was a major factor.

-Playing big offers on NYSE was good until all prop firms started "selling" the strategy.

Those are off the top of my head, will post more if I think of them.
 
Quote from Dustin:

Those are off the top of my head, will post more if I think of them.
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Richard Dennis threw a fit when the Turtle Trading method was disclosed. There are many traders who still trade it "as is", and others still who have simply modified the original.

But I'm sure they won't be tell'in. :p

JJ
 
Interresting thread.

Turtle soup (An attempt to fade Turtle entries) may be another example of the drawbacks of making a pure mechanical system public.

I don't know however if it really worked.
 
Quote from RedDuke:

I said roulette, not black jack, where card counting can tint the edge in your favor. With help of 0 and 00, roulette has an edge of about 5% against the player, and no matter what you do it can not be beaten. No money management will help here.

That is why I said, that the edge is the most important ingredient, if it is missing, you might as well go to casino, at least there you get free drinks served by hot waitresses.
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:) Actually (if I remember correctly) he designed the first portable computer timing the spinning of the roulette and calculating the probabilities of the ball dropping in a specific roulette arc, gaining an edge. The device was put in a shoe and timing info was passed with the toes. I think he sold the device and never actually use it live himself.
 
Quote from elit:

Please...!!

No just kidding!


I have never really understood why you shouldn't reveal your strategy, because then other traders could exploit it, or trade it themselves, and you would thereby lose your "edge"? How?
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Let's change the "quote" a little :)

"Why you shouldn't reveal your strategy? Because then other traders could exploit it, or trade it themselves, and you would thereby lose your "edge" :)"


It's that simple. Ask Richard Dennis, the year he lost half of his account.


If your methodology is real good, unethical folks can get rich just by selling your stuff to the public. They don't even have to trade it :)


Traders may be better off "trading" ideas and strategies with other trusted hard working traders, than "revealing" them to the masses.

Significant "edge" methodologies should not be shared at all.


Goinglite
 
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