System Trading Blog

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System Trading: Real-Time Experiment

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I’ve been a proponent of system trading for a long time. To profit, you have to go long and short —  whatever the trend in any particular market warrants. If anybody had some lingering doubts about it, the chances are that after sitting on long-only stock positions for the last decade and not seeing a penny of profit delivers the message in a straightforward way.

Trading systems have been marketed by various vendors very aggressively for many years and the field generally has still a bit of stigma to it. More often than not, the results from trading systems were mediocre and didn’t justtify the cost.

However, in the recent years, the rules of game have changed profoundly. Today you don’t have to rely on system vendor’s promise about the profit potential of his trading system. You don’t have even take his ask price. A whole new marketplace of trading systems has evolved. Everyone can go to the marketplace and both buy and sell trading system signals. This new marketplace offers opportunities which, in my opinion, are far superior to traditional style of investing in stocks, bonds and funds. A simple, common-sense cost and benefit analysis  suggests that the future of investing evolves around those trading system marketplaces. All seems like a no-brainer — the return potential is much higher and much less risk than traditional investments … besides, the investor doesn’t have to hand his money over to anybody — so there are no transparency and liquidy issues.

Nevertherless, it seems that so far only probably less than 2000 investors worldwide have adapted this new investment approach.

If the investment approach is so good as the theory suggests, every investor should adapt it. I’ll do a real-time experiment to demonstrate the return potential from such approach.


Written by A.S.

March 28, 2009 at 3:41 pm

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