Saturday, February 20, 2010

It's Simple, Either You're Honest or You're NOT !

Through most of my career as an EA reviewer and an automated trading system creator I have been shocked by the large amount of dishonesty in the selling of commercial automated trading systems. What most people don't realize is that NONE of the commercial expert advisor sellers out there are being totally honest with them and all of them (that I know of) use one or another type of deceitful tactic to win over their hard earned dollars. This post will be dedicated to the discussion of this fact and the fact that there is a very simple truth: Either you are an honest seller doing your best possible effort to proof the profitability of your trading system and show it to others or you are a dishonest seller trying to sell something to your customers which you know or suspect won't work. It's simple, either you're honest or you're NOT.

Lets start from making things a little bit clear about what I mean by dishonesty in the world of automated trading systems. I am not simply talking about the fact that expert advisor creators lie about simple things such as "the number of copies available" or the "testimonials" or other aspects of their systems. I am talking about the most important aspect when buying a commercial EA which is merely the evidence provided by the author to backup a trading system's claims.

The simple fact is that today there are some simple standards of evidence which ALL automated trading system sellers should know about and put up on their websites. This evidence is nothing fancy but it can be inferred by using simple common sense. As a matter of fact, if the development of the trading system went on without taking into account that this evidence had to be created then the EA would already be not worth purchasing before the homepage is even made and the sales pitch created.

The evidence required is actually not that difficult to get if you are honestly working towards the development of long term profitable systems. You simply need a 10 year backtest of the trading system with 6 months of live testing (with investor access to the live account available to confirm the statements are REAL an UNALTERED!!) with a 6 month backtest of the same live trading period showing back/live testing consistency. Of course, this requires you to achieve a very long period of profitability in backtesting WITHOUT hindsight or the exploitation of backtesting faults plus the will to test your system on your own money on a live broker to compare your results with your simulations for a 6 month period in order to validate your claims.

The truth is that long term profitable system development is NOT an easy task and these systems do not have the profit and draw down targets everyone loves to hear about. The easy way out for sellers is clearly to be dishonest and tell you misleading half-truths which make most people buy systems which WILL fail in the long term. If people simply discarded ALL the trading systems that do not show the above suggested evidence, they would be left with NONE. Why ? Because NONE of them are honest enough to show all this evidence without omission because for 999 out of 1000 it would mean the end of their sales pitch and for the 1 or 2 who would be able to show long term profitability it would mean a drastic reduction of their profit and draw down targets. Always keep in mind that the aim of commercial EA sellers is NOT to make money from their systems in the long term. Their aim is to make money from selling their EAs to you.

The truth remains the same, either you're honest or you're NOT. Either you are willing to show all possible evidence that your system is profitable or you have something to hide. If you would like to learn more about the systems I have programmed with long term profitability in mind and how you too can learn to design and program systems like these please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

2 comments:

quicksilver03 said...

Daniel,

I don't normally react to this, but you made some very important and valid points which are unfortunately lost in mis-spellings ("your", "NON") and grammar mistakes.

You stand much greater chances of getting your message across if you pay attention to grammar and spelling. I know it's difficult, being a non-native English speaker myself, but it's important.

Daniel said...

Hello QuickSilver,

Sorry about that :o). I have now corrected the spelling and grammar mistakes you mentioned. I always try to pay attention to these things but sometimes they just slip ! :o)

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