Recently, I have come across an interesting observation. I am currently testing some EAs and have been approached by traders expressing interest on my works. In fact, I don't plan to sell any EA. For private EA, I am only interested to offer them through managed account service (MAS). Most of the traders have hesitation or express no interest on (MAS). This phenomenon makes me feel interested. I set up this thread and would like to invite both traders and EA developers to share their views.
From Trader's Viewpoint
From a traders' perspective, I somewhat understand their views. It is natural that people love possession and hate uncertaintly. So, whenever they see a potential EA, they will try to possess it and take full control of it. Also, they will feel secure if they really own the EA.
From EA Developers' Viewpoint
There must be a purpose for people to do a thing. Normally, if peolple spend a lot of effort to develop an EA which is truly profitable, he will not share or sell it unless:
1/ there is a need for quick cash or the offered price is so attractive, he wants to realise the gain now rather than taking risk to trade the EA
2/ he is generous
3/ he just want to show off programming skill
Provided that decompilation of EA is very easy and common nowaday, it doesn't make sense for EA developer to take risk in selling or sharing a profitable EA. The most sensible way for the developers to make long run profit is to provide managed account services through PAMM or MAM platform.
As we all know, most commercial EAs selling in the Internet are not work. That explains a fact that truly profitable EA is seldom sold to public. Most of the commercial EAs only show an optimized backtest result or live demo result attracting people to buy. The selling prices are uaually ranged between USD100 to USD300. Here are my questions:
1. If an EA is truly profitable (as what the seller havs claimed on his website), why he wants to sell it at a low price?
2. Demand driven supply. There are still ton of new commercial EAs launch everyday implying that there is still a market. Why people still continue to spend money on these commercial EAs?
3. Why people hesitate to try managed account services (MAS) despite it is the most logical form of co-operation between EA developers and traders? If we ask ourselves what is the initial motiviation to engage in forex trading, most of us should be 'making profit'. It is that simple. How to make profit is not the most important concern. Ironically, depsite most of the MAS providers provide live trading result for proof, people are still hesitate to try. Instead, they will continue to risk their money in buying and trading with commercial EAs or free EAs shared on the Internet. However, it is a fact that most of them are not profitable or still under development.
I would like to invite both traders and EA developers to share their view on the above questions.
Wallace Forex Laboratory conducts research on profitable EAs. Our ultimate goal is to create a portfolio of EAs which can provide consistent profit.