Scam EAs in Market - page 7
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A lot of people don’t realize how easy it is to fake a “winning” EA. Here’s how it’s done:
Nothing new or surprising, tactic known as "survivorship bias":
-- unsuccessful systems - stop disclosing their performance (ultimately 99%)
-- successful (thus far) systems - continue to disclose their performance
Thing is - most devs don’t even get far enough to get this in action.
Thanks — I actually didn’t realize this had a name: survivorship bias. Makes total sense now.
That said, I don’t see it as a scam either, and I tried to say that in my last message. For me, the EA is doing what it’s supposed to do. By definition, it’s just a tool that follows a set of rules. Whether the creator uses flashy marketing or not, the EA itself runs as designed.
There are ways to get a clearer picture of how an EA actually performs — things like checking multiple signals, doing forward tests, analyzing trade reports, etc. The real problem, in my opinion, is that most people only look at the profits. But the first thing they should be looking at is risk.
Instead of jumping straight to “scam,” we’d all be better off focusing on education, proper risk management, and learning how to read more than just pretty backtests and screenshots.
Whether the creator uses flashy marketing or not, the EA itself runs as designed.
At the end of the day, it's easier to write boilerplate code than it is to write profitable trading logic in plain English (or whichever native spoken language). This is especially true for web design programmers who also happen to have a 2nd passion for graphic design. Then consider SEO management, marketing affiliates, social media advertising, paid search... We can see where this is going. A person who is first and foremost a profitable trader has a snowball's chance in the word of e-commerce.
A solid MFT swing trading EA has about a 22% annual ROI and very low risk. Again, the average retail trader, having about 200 USD, has zero interest in such an EA. 22% of 200 is 44 USD of annual profit, assuming that said trader was able to open a cent/nano account and afford the stops (and swaps in the case of forex/CFD's). This isn't even enough to pay an internet service bill.
In at least some respects, the "scammers" are selling the only thing that they can to the majority of retail traders... "get rich quick" EA's.
Don't you find it interesting that some overfitted EAs keep working for a couple weeks before folding ?
Don't you find it interesting that some overfitted EAs keep working for a couple weeks before folding ?
Not really, because I trade my own custom coded EA's that are not optimized to death. I rely on forward testing coupled with all of the data that I have for a given symbol/instrument--with a self-imposed minimum of 10 years. My best EA tested out profitable for over more than 20 years. With 10 years of data, I optimized once. With 20 years of data, that was merely confirmation of my forward testing with no optimization.
Having said that, I can spot a slipshod EA for sale from a mile away. I guess that overfitted EA's are "interesting" to that limited extent.
(Note that "get rich quick" was sarcastically placed in quotes in my previous post.)
Undercapitalized trading, and it's effect on EA production and marketing, is really what I'm getting at.
Not really, because I trade my own custom coded EA's that are not optimized to death. I rely on forward testing coupled with all of the data that I have for a given symbol/instrument--with a self-imposed minimum of 10 years. My best EA tested out profitable for over more than 20 years. With 10 years of data, I optimized once. With 20 years of data, that was merely confirmation of my forward testing with no optimization.
Having said that, I can spot a slipshod EA for sale from a mile away. I guess that overfitted EA's are "interesting" to that limited extent.
(Note that "get rich quick" was sarcastically placed in quotes in my previous post.)
Undercapitalized trading, and it's effect on EA production and marketing, is really what I'm getting at.
i mean from a scientific viewpoint
i mean from a scientific viewpoint
Sociologically... yeah, sure.
More specifically, it reminds me of an undergrad course in Deviant Behavior.