Price Value of a good expert advisor

[oilfxpro]

Hi folks

What is the value of an expert advisor?How do we put a value on an expert advisor?What is a good expert advisor?

A good expert advisor is one with a drawdown of 50 % of the yearly pips it makes(averaged out over 3 years).It should have annual pippage of at least 700 pips and a drawdown of 350 pips.

An investor could put 10,000 and expect to make 70 % per year = 700 pips *$10

If an investment in an expert advisor gives an income of 70% ,on a 10,000 account (the minimum account size used )it would give 10 times the annual interest income of say 7% =70%.In my view the expert advisor is worth 10 times * 10,000 * 0.5 (annual drawdown) = $50,000.

A really good expert advisor making $250,000 from a $10,000 account is worth around $1.8 m

Could anybody else come up with a formula for putting a value on expert advisors

OILFXPRO

 

[Trader333]

In my view they are all almost worthless. They don't do anything that has not been done for years by the likes of Tradestation etc and it was easy to come up with any number of systems that would give huge profits. I even posted one on here that would return $4.2M for a starting account of just $10K over about 4 years or so. All that has happened is that in recent times the ability for others to jump on this bandwagon has become far more widespread but nothing has really changed in the overall value or usefulness of any of these EA. The problem with anything like this is that it is all based on history and we all know that the future cannot be assumed to be reflective of the past. Also many of the so called profits that are being claimed are in reality untradeable in the real world.

Personally I wouldn't pay anything for any of them.


Paul

 

[oilfxpro]

. The problem with anything like this is that it is all based on history and we all know that the future cannot be assumed to be reflective of the past. Also many of the so called profits that are being claimed are in reality untradeable in the real world.

Paul

Paul

One could write an expert advisor system which is more probabilistic and thinks like the trader.One could write every set of rule the trader uses and get the expert advisor to think like the trader

It would save the trader a lot of time monitoring the markets ,so there is some value

One of the disadvantages is the inability of expert advisors to trade the latest news as an input to the trading strategy.A probabilistic expert advisor could possibly overcome this disadvantage

I would not pay any money for the expert advisors currently sold,they are worthless and most are no better than random entry


OILFXPRO

 

[JTrader]

In my view they are all almost worthless. They don't do anything that has not been done for years by the likes of Tradestation etc and it was easy to come up with any number of systems that would give huge profits. I even posted one on here that would return $4.2M for a starting account of just $10K over about 4 years or so. All that has happened is that in recent times the ability for others to jump on this bandwagon has become far more widespread but nothing has really changed in the overall value or usefulness of any of these EA. The problem with anything like this is that it is all based on history and we all know that the future cannot be assumed to be reflective of the past. Also many of the so called profits that are being claimed are in reality untradeable in the real world.

Personally I wouldn't pay anything for any of them.


Paul

I certainly wouldn't buy someone elses EA, unless i knew exactly what the strategy rules were and that they were robust.
I'd only be comfortable producing an EA/ELD etc. if i had designed the rules that were to be coded.
You see some EA's for sale on ebay, with a profit factor of 6 etc. But often, these rfesults are based on only about 40 trades. Of course, the code is always locked, so it is a black-box system. . But some unknowledgeable poor souls are likely to buy such crap.

 

[zupcon]

They are worth whatever the market is prepared to pay, which isn't a lot, for a whole bunch of reasons.

for a start who would want to trade with any metatrader based broker ?

Although in theory, your EA might turn 10K into 43 Million, if someone only has 10K to invest, then in all likelihood they don't have the money to pay your theoretical price up front for the product.

The main reason why they aren't worth anything is that practically anyone with the analytical skills to figure out a trading methodology can write code, thats the easiest part of the problem to solve, a chimpanzee could do it. Writing a few thousand lines of source code really is a walk in the park, and the very least of the problems needed to be overcome.

There's a whole bunch of other reasons why people wouldn't want the technical problems associated with running an automated solution, and if your going to abdicate responsibility for your trading decisions to someone or something else, your much better trusting a human being with a decent audited track record, rather than a historical back test from a flawed product.

As Ive said before, no one with a reasonable product would ever dream of selling it at any price, because there's simply no need to, there are far more efficient, scalable and profitable solutions.

 

[oilfxpro]

Zupcon

I don't think it is as easy as u make it.

Writing several thousand lines of codes can be done by a chimp as you stated.Writing
profitable probabilistic rules requires a genius and it involves the sort of maths involved in acturial science

Better the championship winner has a degree in maths and physics and he certainly ain't a chimp

OILFXPRO

 

[JTrader]

They are worth whatever the market is prepared to pay, which isn't a lot, for a whole bunch of reasons.

for a start who would want to trade with any metatrader based broker ?
That is a concern.

Although in theory, your EA might turn 10K into 43 Million, if someone only has 10K to invest, then in all likelihood they don't have the money to pay your theoretical price up front for the product.

The main reason why they aren't worth anything is that practically anyone with the analytical skills to figure out a trading methodology can write code, thats the easiest part of the problem to solve, a chimpanzee could do it. Writing a few thousand lines of source code really is a walk in the park, and the very least of the problems needed to be overcome.

Wow thats a lot of code! maybe thats a slight exageration for the majority of EA's, but i get your point & it is a valid one.

There's a whole bunch of other reasons why people wouldn't want the technical problems associated with running an automated solution, and if your going to abdicate responsibility for your trading decisions to someone or something else, your much better trusting a human being with a decent audited track record, rather than a historical back test from a flawed product.

I agree.

As Ive said before, no one with a reasonable product would ever dream of selling it at any price, because there's simply no need to, there are far more efficient, scalable and profitable solutions.

See additions.

 

[zupcon]

Zupcon

I don't think it is as easy as u make it.

Writing several thousand lines of codes can be done by a chimp as you stated.Writing
profitable probabilistic rules requires a genius and it involves the sort of maths involved in acturial science

Better the championship winner has a degree in maths and physics and he certainly ain't a chimp

OILFXPRO

You seam to be confusing the role of programmers and designers. Programmers simply write code, they do not design systems. Developing a strategy isn't a job for a programmer and hell will freeze over before a programmer develops a profitable EA.

Most people with a numerate degree will be capable of coding, it really isn't in the least bit difficult.

 

[JTrader]

Zupcon

I don't think it is as easy as u make it.

Writing several thousand lines of codes can be done by a chimp as you stated.Writing
profitable probabilistic rules requires a genius and it involves the sort of maths involved in acturial science

Better the championship winner has a degree in maths and physics and he certainly ain't a chimp

OILFXPRO

What you are saying then is that anyone who trades a profitable rule based trading strategy, or anyone who does this, and has the ability to code it, is a genius.

 

[oilfxpro]

What you are saying then is that anyone who trades a profitable rule based trading strategy, or anyone who does this, and has the ability to code it, is a genius.

JT

Genius is an overstatement.They are very clever people who are good at designing systems and they can only do that if they have trading knowledge.

Genius because 95% fail and they can master the most difficult markets

OILFXPRO

 

[temptrader]

In my view they are all almost worthless. They don't do anything that has not been done for years by the likes of Tradestation etc and it was easy to come up with any number of systems that would give huge profits. I even posted one on here that would return $4.2M for a starting account of just $10K over about 4 years or so. All that has happened is that in recent times the ability for others to jump on this bandwagon has become far more widespread but nothing has really changed in the overall value or usefulness of any of these EA. The problem with anything like this is that it is all based on history and we all know that the future cannot be assumed to be reflective of the past. Also many of the so called profits that are being claimed are in reality untradeable in the real world.

Personally I wouldn't pay anything for any of them.


Paul

Absolutely!!! More scams possible here. Wasn't it said that large hedge funds will invest hundreds of millions of dollars a year on research and barely break even? If there was something with GUARANTEED profitability, believe you me it won't be on the market for long. A lot of indicator sellers bypass the guaranteed mark issue in telling people it's up to the user how they use the system - a placebo effect in the offing me thinks.

Writing profitable probabilistic rules requires a genius and it involves the sort of maths involved in acturial science

Better the championship winner has a degree in maths and physics and he certainly ain't a chimp

the operative word here is "profitable". If I have an edge or something consistently profitable I would not give it out to anyone, I'm sorry but that's the way it is. The people who are trying to give out these EA are those who probably need your subscription money, because they probably can't find other ways to make money.

By the way, the probabilistic maths involved in writing these so called systems is a mere mathematical triviality compared to the hard research level stuff that the top academics do. In fact a lot of highly paid quants are ex post docs who could not hack it in holding their tenure at their institutions since their research was not good enough.

 

[JTrader]

Hi folks

What is the value of an expert advisor?How do we put a value on an expert advisor?What is a good expert advisor?

A good expert advisor is one with a drawdown of 50 % of the yearly pips it makes(averaged out over 3 years).It should have annual pippage of at least 700 pips and a drawdown of 350 pips.

An investor could put 10,000 and expect to make 70 % per year = 700 pips *$10

If an investment in an expert advisor gives an income of 70% ,on a 10,000 account (the minimum account size used )it would give 10 times the annual interest income of say 7% =70%.In my view the expert advisor is worth 10 times * 10,000 * 0.5 (annual drawdown) = $50,000.

A really good expert advisor making $250,000 from a $10,000 account is worth around $1.8 m

Could anybody else come up with a formula for putting a value on expert advisors

OILFXPRO

R U just gearing yourself up for the hard sell?
If so, when R U going to hit us with the sales pitch?

Is/was your strategy to start off as a "normal" T2W member, establishing a reputation, before hitting us with the for sale signs:?:

Just what is your game (Mr Vendor) :?:

Thanks.

 

[oilfxpro]

R U just gearing yourself up for the hard sell?
If so, when R U going to hit us with the sales pitch?

Jtrader

No .It is not my style.I am just discussing what they are really worth.

First I would give you many free EAS to play with,show real account statements with 6 figures ,and let u build your desire to the extent you are throwing money at me without asking questions

That would be my style

regards::smart:

OILFXPRO

 

[JTrader]

Jtrader

No .It is not my style.I am just discussing what they are really worth.

First I would give you many free EAS to play with,show real account statements with 6 figures ,and let u build your desire to the extent you are throwing money at me without asking questions

That would be my style

regards::smart:

OILFXPRO

Fair enough . But -

..... where is the "IF"........

What R U selling anyway? How come the vendor tag:?:

Cheers.

 

[oilfxpro]

Fair enough . But -

..... where is the "IF"........

What R U selling anyway? How come the vendor tag:?:

Cheers.

Jtrader

I am not sure if I am going to sell Expert Advisors, I develop them for commercial use on my accounts .

If I let people use them on my servers, I could get 25 % (MAYBE 50%) of the profits as a server rental fee, so on a $100,000 account generating $500k ,each expert advisor is worth $125,000 per annum.

Now why would I sell it for $200 ?:smart:

Vendor :making them for commercial use

Regards

OILFXPRO

 

[rols]

Jtrader

I am not sure if I am going to sell Expert Advisors, I develop them for commercial use on my accounts .

If I let people use them on my servers, I could get 25 % (MAYBE 50%) of the profits as a server rental fee, so on a $100,000 account generating $500k ,each expert advisor is worth $125,000 per annum.

Now why would I sell it for $200 ?:smart:

Vendor :making them for commercial use

Regards

OILFXPRO

Are you being totally honest with us?

Sounds like a high schoolboy's pipe dream. How many clients with $100K accounts do you actually have?

Just checked out your website where most of the links don't even work.

I may be totally wrong but so far I'm not convinced.

Nothing personal except you are taking up a lot of space on this forum with grand statements. And at the moment I'm rather anti vendors as they are spoiling what used to be great environment to wile away time between trades.

Please show us otherwise.

Thanks

 

[oilfxpro]

Are you being totally honest with us?

Yup

Sounds like a high schoolboy's pipe dream. How many clients with $100K accounts do you actually have?

None until I have finished my holy grail expert advisor, after succesfull testing on live accounts for 6 months ,it is a matter of a few phone calls

Just checked out your website where most of the links don't even work.

they are not meant to.I don't sell anything from the website

I may be totally wrong but so far I'm not convinced.

Nothing personal except you are taking up a lot of space on this forum with grand statements. And at the moment I'm rather anti vendors as they are spoiling what used to be great environment to wile away time between trades.

This is a great environment and it is good fun.I am anti vendors and spammers. These vendors/spammers are all over the internet on different message boards .You can't stop them.

Please show us otherwise.

Thanks

Give me time and you will see.I am currently busy developing and testing new systems.

Every trader wants a hassle free environment where nobody is constantly spamming and wasting everybody's time for money.If every new post is by some seller we lose the fun .

There are many good and knowledgeable traders posting in this forum ,hopefully I would like to be considered in that category.I have a different obsession and it is to beat the market with a mechanical system which is very consistent.That is why I am taking up space on metatrader ,forex and oil.

Regards

Oilfxpro

 

[rols]

Thanks for the response.

A welcome contrast may I add.

Good luck in your quest.

 

[TWI]

I think it is easier to write a profitable system than to actually trade one. If I had not developed a system myself I think I would find it impossible to stick with it after a string of loss trades.

 

[oilfxpro]

I think it is easier to write a profitable system than to actually trade one.

True if u trade only one system


If I had not developed a system myself I think I would find it impossible to stick with it after a string of loss trades.

TWI

It is easier to trade multi systems which are profitable than to actually write multi systems.Using multi systems allows one to spread risk among 7 to 10 systems simultaenously , leaving the trader less worried about failure of any on particular system .The trader has hindsight that 2 to 3 of the 10 profitable systems may not perform well this year , but the others will make up for their underperformance.

OILFXPRO