Speaking personally, it is simply because I don’t have enough capital to trade my strategies and generate a sufficient return to live off. Contrary to what others have said, my best strategy is on C2 as I figure that that one is most likely to attract subscribers and therefore achieve my goals - I can always remove it once I have capital if there is a chance that it’s effectiveness is reduced by too many subscribers.
What is this post doing here?? It is completely off the point, and incomprehensible gibberish to boot. Please do not spam like this. It is pointless and you will find yourself increasingly ignored by most people.
"If your system is so good why sell it?"
Isn’t this a bit like asking farmers why they sell their crops?
You’re not selling your system, you’re selling what the system produces.
[LINKSYSTEM_49836471]
I completely agree, I have developed and posted the system that is the best and the one I use personally. I really worry when I study some of these strategies that produce crazy numbers in a short period of time, those results can’t continue and the result will be quite severe to the subscriber.
I also know that if your system is based on a liquid asset and trades somewhat infrequently (not high frequency day trading where execution is a huge factor in profitability) then I don’t see the harm. If my system trades a lot of etf’s, how can another 100 people trading it really hurt the returns?
One item that I haven’t yet read (or perhaps missed) is if someone has a great strategy why not start their own fund? I came from the hedge fund world and, for me anyway, I hate the business/bureaucratic side, from raising funds (ie. selling) accountants, regulators, audits (which happen all the time) etc… you spend more time “running” the business than you do developing trading strategies, which is all I really love doing. If I had a ton of money to hire everyone else to handle that end, sure that might be a decent road. But if you can prove you have a successful model and obtain sufficient subscribers to remain independent, for me that’s the ideal world.
Hi Galaxy,
“why not start their own fund” caught my eye… I did try to do this but I got bogged down talking to fund-starting-consultants in the end. Getting investors was not our main problem - my partner had connections in that department. What it boiled down to was that the start-up costs (lawyers, accountants and consultants one needs in order to comply with regulations) are prohibitive for a small start-up. We’d have to charge the investors a lot before starting to trade just to cover costs (let alone pay ourselves anything) and this was against the ethos of what we were trying to do.
So I am now planning on joining an established small firm instead.
Dean.
I completely agree. That's my situation, the amount of capital needed to fund all of the costs is quite high, otherwise you risk running out of day-to-day cash even if you're strategy is quite successful. Managers who can raise $100 mil or more off the start don't need to worry about hiring people to handle all of these issues, but if you start with only a few mil, you're basically losing money for a few years.
Also, if you're a very small fund (you and a partner for example) you have to deal with a lot of client related issues, both in terms of raising money and explaining all of the things happening in the market and to their money (ie you also part of marketing) that's a lot of hats to wear. Developing strategies is tough enough, I'd prefer just to specialize in one field rather than be stretched thin across a broad section of responsibilities. It's better for overall performance.
Good luck in your future endeavours!
actully we are not selling the system, meaning that you are not teaching the system core and mechaism or mechanics, or even the system’s methods, i mean how do the system work, we are not doing that, we just sell the system’s result to traders, that’s it
and i agree that collective 2 is very powerfull method to sell your system products which are the signals, So having subcribers is a very awsone way to increse your income,
if you just have 10 subcribers and your fee is 100$ for a good system this pricing is nice for a very powerful system then you will earn 1000$ per month very nice income for me really. think of collective 2 as a market and your system is a factory producing commodity this commodity is your signal but DO you know how does this commodity is produced??? like cars, you just see videos of how cars being assembled but you don’t know how they desgin it or how they produce spare parts for example. tha’t’s how it work
Personally, I actually trade the system that I sell. I trade full time so many people that I meet will ask me what I do, how I trade, what is my strategy and C2 is the perfect venue for me to showcase what I do. I believe being on C2 adds some professionalism to my work and also shows that profitability from trading can be achieved over many years.
I am not interested in teaching people how to trade my method. It took me many years of trial and error to buid a trading method that I really believe is a very valuable asset. Hopefully, I will teach my loved ones one day when they are ready.
If I ever did teach my method it would be individual training only, and it would be very expensive. I doubt this will happen in the near future.
I do expect to put my method up trading other things like gold, oil, bonds, stock indexes, etc.
Helping others to benefit from my method and profiting from that help is a great way to earn an income. I like that.
Currently, I do not even charge for my EURUSD signals. I believe that it is only fair to allow people to benefit from my work while the C2 track record is building.
I am not sure when, but I will charge for my work in the future.[LINKSYSTEM_52638484] Hopefully the subscribers will have the confidence to pay a small fee when the time comes.
Although I respect all the answers (and questions) above, it is clear that the majority of the efforts at C2 and the investment arena as a whole are sorely missing the point of it all.
The Stock Market has a historical return and (less inflation) will provide a great return for your investments with compounded growth. This has a long-term horizon, but exponential growth is POWERFUL in the latter years.
Contrast that growth during the last 5 years of say a 20-year investment plan to what elite traders, Hedge Fund and C2 vendors manage. That compounded, long-term growth will vault leaps-and-bounds higher than short-term “systems”.
– so much so a difference the the latter should truly be relegated as simply “hobbyists”. Their gains - whether a few thousand or even a few million - are oh-so finite! That is why when you do a screen at C2 for a system with a market-beating average traded for more than a few years comes up with just a handful.
So yeah, a significant market-beating, long-term - proven - edge ultimately won’t need to sell too much. Personally, since my third year results have stagnated AND the fact that I haven’t significant capital to personally invest – I will allow C2 to track the next year’s performance to my long-term edge, pick up some subscriber’s (still currently FREE) along the way…and move on with better use of my time.
I really don’t see the point of so many spending so much time and effort for a (hopeful) finite gain. Aren’t there so many other things to do in life? I’m still hoping my “hobby” pans out. If you do a screen of futures systems 2.5 years old of the 7, I am listed (7th).
[LINKSYSTEM_30875056]
Gilbert
The real take-away from that list of systems is the low win % they all have. It will be counter-intuitive to many and will hopefully make people stop and think why it is that the systems that seem to win less often are the ones that survive the longest. Will they ever work it out? We live in hope.
Gilbert
Do not worry about what people think. If you are confident in your method and you are trading it feel good.
We will all have drawdowns…you need not justify anything. stay true to your method.
Well said!
can Kirk Douglas still make it to the academy awards?
i am in it for money…yet I charge zero! Am I crazy? I don’t think so.
Prove yourself long term and the money will follow.
Free is good for everybody…including the vendor!
The proof is in performance! All the rest is just hype!
"If your system is so good why sell it?"
I think this is an excellent question. I agree somewhat with Kevin Davey and also, to some degree, with most of the replies in this discussion. However I have dealt with this question for many years. So please excuse me for joining this discussion months later than most replies, but I would like to summarize my views…
Q. Why did Warren Buffett start Berkshire Hathaway?
A. Because then he could make billions instead of millions, without even risking his own money.
I constantly hear that Warren Buffett is the world’s greatest investor. Not at all. I know a dozen better investors, and I can prove it by their last 20 years of returns. Warren Buffett however is a “good” investor plus the world’s greatest stock peddlar = (<>) = system seller.
I read constantly the implication that Warren Buffett is a great genius who picked stocks that averaged 20% gain every year from 1960 to 1999. Um, no. Warren Buffett is a stock broker with significant competence and integrity. This is very rare, especially for the 1960’s when stock brokers primarily bought blue chips while taking huge commissions from old ladies. Consequently, Berkshire Hathaway did better than usual and consequently Warren Buffett was able to convince thousands of people to give him more money consistently for 40 years. Plus a few shrewd multi-billion dollar acquisition deals.
So if Warren Buffett published an investment newsletter, and said, “Follow my advice because my stock picks averaged 20% over 40 years…” Then he would be lying. Many system peddlars do exactly this. They claim they are good because they are rich, period. But how much did they make from the system, and how much from selling the system? It’s a valid question, and there are valid answers.
On the other hand…
Earlier in my life, I did a lot of research on what is called “Voodoo Gambling Systems.” Since forever, there have been many people claiming to sell sure-fire mechanical systems to beat the casino odds at Craps and Roulette. Which is mathematically impossible. Nonetheless, instead of dismissing these systems outright, I created spreadsheet simulations. They are net losers as expected. However… what most mathematicians do not seem to understand… some of these systems do make it possible to appear lucky for longer periods of time. I.e., when someone selling a Voodoo system claims, “I played this for 20 years without ever losing…” He may be telling the truth.
However… there are certain hallmarks of the “evidently sincere” Voodoo system seller which… to my surprise… I am finding more and more among people selling stock market investment systems. As follows:
1. "It is important to use the system for only for a certain amount of time. What time of day or month doesn’t matter, just don’t press your luck, especially if you get a bad feeling."
2. "Most of the secret is in stop-losses. Quit as soon as you start losing or preferably quit while still winning. Then you are sure never to lose much."
3. "This system makes $5,000 every month, but that’s it. You cannot increase the winning by compounding the capital."
4. "This system is entirely mechanical but it is necessary for a human being to do it. Just somehow it makes a difference."
5. "For some people it works to increase bets when winning. For others it works to increase bets when losing. It just depends on the person."
7. "I am a multimillionaire and I once made a million dollars in three months. Here are photos of checks to prove it."
8. "If you see this win-loss pattern, stop playing. Don’t ask me why, I just know from experience."
For Voodoo craps the “pattern” would be something like “pass-don’t pass-pass-don’t pass.” For Voodoo investment systems it would be something like “double helix.” Don’t look in their book for documentation with live results or even backtesting, they don’t see this as necessary.
I am not primarily a technical investor, so I don’t know what a double helix is. Maybe there is something to it, maybe well documented somewhere. However, when you write a serious book about serious casino gambling systems, such as poker odds or Blackjack card counting, you don’t get away with this lack of documentation. But I have literature in my hands right now, including by people nationally recognized as investment experts, yet expressing the same “Voodoo Gambling” traits as above.
In summary, “Why do you sell your system?” This is a good question. Often, you can determine the seriousness of the system, simply by how much respect the system vendor gives to the question. Basically, there are many correct answers, and only one incorrect answer. The incorrect answer:
“This is just what I do. I have no rational answer and do not feel required to have one. I am not a rational person and do not respect those who are.”
Good point. Very interesting.
Being a Business owner and a trader, I view trading like I do my business. If I can add an additional income stream to my business, I don’t say to myself,
“why add an additional income stream if where already making money”…why would google buy other companies since they make so much money from search engine? Why would Att want to sell Ipods and Ipads?
I would ask you, if you have a job and your making money, why trade the market? Your already making money at work why do you need to make money in the market?
All trading systems have draw down periods. If you trade for a living selling your system signals is a way to stablize your income. During the draw down period you can still make money from your historical work.
No one ever ask a famous sports athlet, why do you shoe commericals you make so much money playing your sport… of course not we know why they do the commerical to make even more money.
Gerald Peters
The Money Flow
P.S. I neglected to mention my own answer.
I have several answers. My long term goal is not to be a billionaire myself, but to raise billions of dollars for environmental conservation. In addition to vetting investments for cost effectiveness, I will vet the environmental charities. I will ask all subscribers on their honor to donate at least 0.1% per year of net worth to their favorite environmental charities, and to bequeath at least 10%…
Meanwhile in the short term…
I am putting all of my own investment capital into my investment systems. Instead of living off of the earnings, I would prefer to compound the earnings, while I live off of subscription fees. I also immediately donate a portion of subscription fees to environmental charities…
My systems use combinations of reputable investment methods with usually at least 5 year live track records, preferably 10 years, with third party verification. My particular combinations of these methods have only backtesting records, for which I have done due diligence in checking manually. Backtesting results are never as meaningful as live records. Nonetheless I am confident in my combinations.
Therefore I am placing about 30% of my own net worth into my own systems, the same as I would invest using any methods. About another 30% goes into low-deviation mutual funds, mostly international bond funds with about 12% annualized gain over the last 15 years. Another 30% is allocated to cash and US Treasury TIPS. About 10% is allocated to a variety of Collective2 systems that look good. (My own c2 systems are relatively conservative, so I would like to get in a bit more action.)
After 3 years, if my new systems perform as well as expected, then I may increase my investment in them to 50% of my net worth.
There is no such thing as a “proven” system. Even the Euro, the US dollar, gold and the treasury bond could all collapse in value when you need them. So basically, no matter how supposedly “proven” a system is, it is foolish to put in more than 50% of net worth.
This is because there are only two possible outcomes…
1. The system continued to perform every bit as well as its past history. Therefore you made so much money with 50% of your worth that there was no need to risk more.
2. Or… the market changed somehow, converting your sure-win system into a loser. But you only invested 50% so you only lost half as much.
Nothing is proven. The only certain thing is to be a successful stock broker. Then you get paid 1% of 1 billion, rain or shine. And now we don’t need to be a stock broker. We can start a Collective2 system. And if our c2 systems are really good, we are not the only ones who benefit.
