What if someone creates a working EA AND decides to sell it?

Lakontis · April 30, 2010, 7:09am

I don’t even know if it is possible to create an EA that would always generate consistent profits, but suppose someone managed to do that. And maybe some people have.
But now suppose someone was stupid enough to either publicly sell it or leak it on the internet so that anyone can use it. So all the people start using the EA and make money on real accounts. After a while millions of people are using it… What happens now? The world’s economy crashes?? I mean the whole world can’t be millionaires. And if they were, the value of those millions would have to be slim to none.
Do you think something like this would be possible? Just a crazy thought I got after reading the posts about all the scam EAs in the holy grail section.

this_barb · April 30, 2010, 7:45am

It stops working and I’ll be the counterparty to all of you.

MattW2009 · April 30, 2010, 9:12am

A related question here though is why are most EAs pure baloney?
Most EAs as soon as they are sold go into drawdown and may well prove to not actually be profitable in the long run.

As I’ve noted, it’s perfectly possible to write a working EA and there are ones out there that do. So why not the ones you see regularly mentioned?

Optimisation. The EAs are sold on their historical equity curve and they are optimised to produce astronomical returns over that period to increase sales. And it is that optimisation that ultimately kills it because it has been so strongly curve fitted to the dataset that when the market slightly changes character (as it does over seasons and years) the EA suddenly under-performs causing sometimes huge drawdowns.

Those EAs that work have a lot slower equity curve and often a bit bumpier than the optimised ones and that puts buyers off because the notion of slow and steady equity accumulation does not peak the interest of your average get-rich-quick EA purchaser.

SDC · April 30, 2010, 1:01pm

I was wondering what would happen in those circumstances too I had thought I would give my EA to all my friends but now I’m having second thoughts considering they would all probably give it to their friends etc…

SDC · May 1, 2010, 3:12pm

MattW2009:

A related question here though is why are most EAs pure baloney?
Most EAs as soon as they are sold go into drawdown and may well prove to not actually be profitable in the long run.

As I’ve noted, it’s perfectly possible to write a working EA and there are ones out there that do. So why not the ones you see regularly mentioned?

Optimisation. The EAs are sold on their historical equity curve and they are optimised to produce astronomical returns over that period to increase sales. And it is that optimisation that ultimately kills it because it has been so strongly curve fitted to the dataset that when the market slightly changes character (as it does over seasons and years) the EA suddenly under-performs causing sometimes huge drawdowns.

Those EAs that work have a lot slower equity curve and often a bit bumpier than the optimised ones and that puts buyers off because the notion of slow and steady equity accumulation does not peak the interest of your average get-rich-quick EA purchaser.

its probably because anyone who discovers a system that works as an EA and is consistantly profitable is going to keep it to themselves for fear that widespread use would somehow affect its profitability, so the only EA’s you see for sale or for free are the discarded ones that either made very little profit, none at all or some when the market was right for it.