As a subscriber, do you invest in Demo Account trading signals? - page 9
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The purpose of a back test is to test the strategy on the past price action, optimize it ,and find what works. So if it works, and the strategy is used live in a similar market action, (bear trend, bull trend,) which ever applies, it should trade fine. Some traders are good coders some are not, so I do not see the need to have proof in a live account. The main reason is the same as all disclosures. "You can not depend on past performance, as proof of future performance." That said. You may be missing a great opportunity by not testing the back tested strategy. All subscriptions should offer a trial test period anyway to lower risk to the subscriber.
I once spoke to a billion dollar fund manager. "What does it take to interest you in a system that could produce 850% in one year". He said,"That's unheard of, how could it be possible" I said," I have one that I developed in a demo account. I will only sell it to one firm." He said" You would need to have a one year track record in a live account to show proof."
Lets consider: How many ETFs or other funds are started up with no track record at all, they are new. There is no track record of a new fund. They pitch the historic performance of one similar as a case study to get investors. They will run a back test, to test the strategies to see how it might perform. Then they start trading it, adjusting it to actual live market conditions as they go. The same exact process we do as developers of EAs here. The fund manager I spoke of,.....Closed minded, and lost a very lucrative opportunity, he thinks like so many people do, if he can not do it (Ego), and someone has not done it,..it can not be done. He has lost many trades that I would have never even placed. He is also accused of manipulating, which means he is unable to identify profitable trades, and resorts to illegal and unfair tactics to make a profit. There are many like him out there.
Bottom line: Be open to all possibilities, if you find they are probabilities, do the test, if they perform, you made a wise choice.
The purpose of a back test is to test the strategy on the past price action, optimize it ,and find what works. So if it works, and the strategy is used live in a similar market action, (bear trend, bull trend,) which ever applies, it should trade fine. Some traders are good coders some are not, so I do not see the need to have proof in a live account. The main reason is the same as all disclosures. "You can not depend on past performance, as proof of future performance." That said. You may be missing a great opportunity by not testing the back tested strategy. All subscriptions should offer a trial test period anyway to lower risk to the subscriber.
I once spoke to a billion dollar fund manager. "What does it take to interest you in a system that could produce 850% in one year". He said,"That's unheard of, how could it be possible" I said," I have one that I developed in a demo account. I will only sell it to one firm." He said" You would need to have a one year track record in a live account to show proof."
Lets consider: How many ETFs or other funds are started up with no track record at all, they are new. There is no track record of a new fund. They pitch the historic performance of one similar as a case study to get investors. They will run a back test, to test the strategies to see how it might perform. Then they start trading it, adjusting it to actual live market conditions as they go. The same exact process we do as developers of EAs here. The fund manager I spoke of,.....Closed minded, and lost a very lucrative opportunity, he thinks like so many people do, if he can not do it (Ego), and someone has not done it,..it can not be done. He has lost many trades that I would have never even placed. He is also accused of manipulating, which means he is unable to identify profitable trades, and resorts to illegal and unfair tactics to make a profit. There are many like him out there.
Bottom line: Be open to all possibilities, if you find they are probabilities, do the test, if they perform, you made a wise choice.
If I'm confident of my system which produces 850% per-year, I would find the 10_thousand dollars for my small account. Should that mean working 3-jobs as a Janitor | taking the loan from the credit card companies | borrowing the money from family members and friends | selling my car, house, and dog in the process | pitching my system to every or anyone who'll listen and willing to invest. I'll do anything in my power [except commit a crime] because I'm confident in my system. I wouldn't be upset at someone else because they wouldn't purchase my holy-grail. But thats just me.
If I'm confident of my system which produces 850% per-year, I would find the 10_thousand dollars for my small account. Should that mean working 3-jobs as a Janitor | taking the loan from the credit card companies | borrowing the money from family members and friends | selling my car, house, and dog in the process | pitching my system to every or anyone who'll listen and willing to invest. I'll do anything in my power [except commit a crime] because I'm confident in my system. I wouldn't be upset at someone else because they wouldn't purchase my holy-grail. But thats just me.
If I'm confident of my system which produces 850% per-year, I would find the 10_thousand dollars for my small account. Should that mean working 3-jobs as a Janitor | taking the loan from the credit card companies | borrowing the money from family members and friends | selling my car, house, and dog in the process | pitching my system to every or anyone who'll listen and willing to invest. I'll do anything in my power [except commit a crime] because I'm confident in my system. I wouldn't be upset at someone else because they wouldn't purchase my holy-grail. But thats just me.
Not upset, just don't understand their thought process. It's EGO. Real: If you know that the market is dynamic and changes all the time, and you tell (disclosure), your investors everyday that future performance can not be predicted based on past results, yet you also know, all decisions are made based on past performance with current conditions considered, from trading the market, to all business models,"If it worked, repeat it", "Don,t fix it if it is not broken". Then saying a strategy is dependable when run in a real market but not when back tested or run in demo, makes no sense. It's a brain block, the financial professionals have brainwashed people saying, "you can not do it unless you risk your millions and show proof. This creates a barrier to entry, less competition, makes it easier for them. Reality is, most professionals are merely guessing, and barely beating inflation over time. Look at the ten year records of most funds and you can verify my take on it. Also there is a difference in being able to predict market action based on analysis and actual trading. The analyst picks based on research and analysis, the trader has emotion, fear of losing to deal with. You could be the best at analysis but the worst at trading. Who would you rather manage your money? 1. A person who is fearful 2. A person who is not? Who is more fearful of losing money? A trader trading their own money, or one trading other peoples money?
Which presents less risk of loss? Trading your own money, or selling trading systems to others? Everyone has a business model, to each his own.
Then saying a strategy is dependable when run in a real market but not when back tested or run in demo...
No one said that, you can manipulate words at your advantage and after that refute what you invented. What I said (and others) is that a provider who run a strategy on a demo account is not dependable.
It's a brain block, the financial professionals have brainwashed people saying, "you can not do it unless you risk your millions and show proof. This creates a barrier to entry, less competition, makes it easier for them. Reality is, most professionals are merely guessing, and barely beating inflation over time. Look at the ten year records of most funds and you can verify my take on it.
This is simply ridiculous. There are obviously always people who wins, and wins a lot in trading, even and mainly on crisis period. More amateurs in the game more money to catch. The big players are banks, they opened the forex market to have more capital to win and they obviously want that people trade on real account. Anyway all of that has nothing to do with the topic.
Who would you rather manage your money? 1. A person who is fearful 2. A person who is not? Who is more fearful of losing money? A trader trading their own money, or one trading other peoples money?
Which presents less risk of loss? Trading your own money, or selling trading systems to others? Everyone has a business model, to each his own.
You are totally off-topic. This one is "as a subscriber do you invest in a demo account..." and not "as a provider do you try to catch money from the naive investors". It's now very clear what's your point of view, a provider takes less risk with the money of others, obviously. I guess we will soon see your signal provided on a demo account.
I invite all potential subscribers to read your post, it's very instructive.
@KenMcCormick:
Why bother trying to understand a Billion_Dollar Funds Manager. Imo, undertaking something like trading is a journey of understanding yourself. A fund_manager trades for different reasons than you and I. As you've stated, he's not interested in trying to return %850 for his members. He's mostly interested in keeping his job, beating inflation and staying above the required draw-down.
If you've given up on trading and believe in system selling instead then "yes to all men his own". But at what point does selling something which doesn't deliver become fraud. If your goose really lay golden-eggs would you sell the goose. These are the types of soul searching questions everyone turning tides must answer.
I have a cousin who never wants to take any risks. He always comes up with these brilliant ideas but want my money placed on the line. This bothers me given the fact that we both have about the same amount of assets. I believe a partnership works best when all parties have something to lose. But then again thats just me :)
Excellent words Ubzen, how deep and cold is the water, let me know if i will get swept away, I like it!!!
I have a cousin who never wants to take any risks. He always comes up with these brilliant ideas but want my money placed on the line. This bothers me given the fact that we both have about the same amount of assets. I believe a partnership works best when all parties have something to lose. But then again thats just me :)Forgive me for the fact that I am still very new on this site and forum. But that doesn't mean my opinion is worth less ;-)
I have been looking for a reliable signal provider, and one of the most important conditions I am using as a deal breaker is the fact that the account the trader is showing results of, is a REAL trading account.
My reasoning is quite simple :
if someone uses a DEMO account to test and promote his signal, there is always the chance that he/she doesn't take things all that seriously. Heck, it's like playing with Monopoly money, and you can buy as many streets and hotels as you want, cause in the end, you lose nothing but perhaps a bit of "honor".
whereas on the other hand, someone who is putting his own money on the line, he/she is more likely to take things seriously. And since we are talking about money here, this IS quite an important factor.
I feel that the owners of the site have a RESPONSIBILITY to fulfill in this matter. If they want to provide their readers with a market, they also need to control that market. And in this respect, this market is no different from bank and other financial institutions, since in reality they all deal with the client's hard earned (well... for some, lol) cash.
So I think that the signal and EA market part of the site should be partitioned into two completely different sections, one for the REAL account traders/sellers and one for the DEMO account traders/sellers.
Making this distinction a STRICT CONDITION to adhere to for providers would make things much easier and much more RELIABLE for those who are looking for a signal or EA provider.