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Why people generally prefer to buy EA instead of managed account service?

tbuitendyk (tbuitendyk)
May 17 2010 at 01:25
141 posts

Elkart posted:
 ...This website is a testament to how systems can be manipulated to look good. 99% of the systems here are not viable.

Indeed. My observation exactly.

Gear on the left...
May 17 2010 at 01:36
941 posts
I think to find real money you have to be shaking hands in the right circles. And none of the good traders I know are in those circles.

That leaves the retail investor and there the traders are competing with every con artist out there. If you hold up your 100% at 3% DD it doesn't even get noticed next to Super Pip Bob's 1000%, even if Bob wipes out next month with all your cash...

May 17 2010 at 02:22
4 posts
I would consider anything higher than 15% per month to be high growth.

May 17 2010 at 02:39
941 posts
I know people who can do that, but you'll draw down at that pace, just no way to avoid it...

2 500% in two years, heck of a figure.

May 17 2010 at 03:14
941 posts
None of the guys I know will be able to show you they can do 15%. What they can show you is 10% at 3% DD. One has to surmise they can do 20% at 6% DD then. But they don't trade like that, not on their normal managed accounts anyway.

winsor (winsor)
Jun 30 2010 at 18:55
303 posts

tbuitendyk posted:
powercouple posted:
    ...and if someone knew of a managed account that has good consistent and high growth, I would LOVE to hear about it. So far what I have seen is VERY little reward for the risk.

I believe our clients are happy with the VTSS managed service and they're making money. About 130 pips per day since starting to track in the beginning of March...

Theo Buitendyk
Volatility Trader Signals Service

Theo, you will need to have a record of at least 5 years NOT months. I know as I was quite successful for 10 months last year and then the expert advisors went through a period of DD this year. The expert advisors are picking up again; thus, risk and reward go hand in hand. It is a matter of time that your risk will show up. There are no ways of avoiding it.

Jun 30 2010 at 21:09
423 posts
So what is the main reason for the questions?

Jul 02 2010 at 16:37
7 posts
USD5000 is a big amount to 'try' a managed account.

stephanusR (stephanusR)
Jul 11 2010 at 20:22
216 posts
robw135 posted:
    Something that has puzzled me ever since I heard about EAs.
There must have been gazillion variations of EAs developed in the past few years since forex opened up and so far I don't believe any of them works for any considerable period of time (please prove me wrong).

It is known as survavilist-bias, there is not a single EA that will generate a positive return moth after month for an extended period of time (at least 12 months), which is also why the MT4 trading contests don't prove anything, the two month period is to short. Out of hundreds of EA's there will always be one or two making money in this two month time frame, but let the EA run for 12 months and it won't work anymore.

winsor (winsor)
Jul 11 2010 at 23:42
303 posts

Both manual and mechanical systems (expert advisors) go through a period of drawdown. It is impossible to have a system that can generate month after month profit for an extended period of time. This will define the law of physics by claiming that one trading system has no risk.

I agree with you that all these EA competitions are marketing based and nothing more. I am an experienced system developer and found that diversification is the way to go. I have designed 5 separated EAs with 5 different methodology. Since the 5 systems are non correlated, I will spread my investments over all 5 EAs.

In the words of Harry Markowitz: Investors should focus on selecting investment portfolio rather than investment of individual stocks. It is possible to realize a highest expected return for a given degree of risk or a lowest degree of risk for any given expected return. The riskiness of a portfolio depends on the covariance of its holdings and not on the riskiness of the separate investments.

BTW, I have uploaded an installation file where you can view my 5 expert advisors in real time. Have a look at them here:,4

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