Last week, their CL script got its butt handed to it and the vendor has sent out email instructing clients to not trade it until further notice. SMD is a breakout system--and CL is a market where the pros suck in the breakout players and then reverse the market on them. I think this is what sharky was touching on.
Also, there is a new optimized version (the 6th!) for the other scripts as well. I think these scripts are now over-optimized (curve fitted) which is not a good thing.
This thread caught my eye since I have been following the SMD website for awhile now. And, in fact, I found this thread through the vendor's marketing email just as mentioned in this thread. I have not traded this system yet nor am I affiliated with this website but I take issue with some of the comments here.
First, I cannot find on the vendor's website any statement that they do not trade the system. The only thing I can think of is that you are misinterpreting their disclaimer.
Second, the lease fee for this particular system is in line with many similar type systems - that is, many cost in the neighborhood of a few hundred dollars per month. I'm not sure why you think such a system would be worth millions of dollars.
Third, computer-driven, algorithmic systems are not new. It is a fact that such systems have been around for quite some time and some or many have been very profitable. Just to give one example - it is quite well known that John Henry, the owner of the Boston Red Sox, made a fortune from mechanical systems.
Finally, I still cannot "vouch" for the SMD product - I can just continue to evaluate like everyone else but to come out and dismiss the product simply because it is computer driven is just unacceptable.
The disclaimer clearly states that all results published on their site are hypothetical, that they are simulated and not the results of trading real money. How would you propose I interpret this?
The simple fact is that all systems of this type are for the naive. None of them work. The fact that one company selling dubious systems to the gullible charges a similar rate to another does not make them work. The fact is thats the pricing is directly related to what the common man in the street can afford to pay. Most people can afford to pay $300-$500 a month. Get to $3000 a month and you will find very few wise people that can afford this and would actually fall for the scam. Price elasticity is what drives the price of these systems. The price is simply a price that fools will pay to be proved fools.
Now - let's say you had a hedge fund with $2 billion in it. How much do you think they would pay for a system that would make them 10% per month? A bit more than $300, right?
So why is the pricing of this system aimed at fools and not hedge funds with $2 billion? Perhaps an altruistic streak on the back of the vendor? Or perhaps the hedge fund would only buy a system that actually worked...
Correct - but how many of these are placing directional bets based on technical analysis? Why do you think that so much money has gone into co-location infrastrucure for HFT systems? Why are they front running pennies when they can just use technical analysis to predict the future direction of the market? Well - quite simply - the world of algos is not what you think it is. It is a world of arbitrage, not MA crossovers.
You don't actually know what the algos do, so you don't know how ludicrous this argument is.
Cool. Whilst you are at it - be sure to check the end of every rainbow you see because there might be a pot of gold at the end of one of them.
On the other hand, you could stop wasting money on pipe dreams and actually take responsibility for you own trading, then you will get somewhere.
I just ordered the Breakout indicator from SMD, it cost $14.99 for a week, so what the heck! Firstly, it is not the same as Dorian Channel.
I overlayed it with my existing charts and it follows the Swing Indicator pretty clostly, although the swing indicator give you more buy/sell options. If you only followed the indicators this morning CL, from 8:00CST to 9)CST, it would have given you 6 buy/sell indicators. Mostly all winners of 2-20 ticks. One would have been a big reversal if you did not have a stop in quickly.
I always enjoy listemting to new ideas, and sales people cause I've beed a sales guy all my life and a good salesman enjoys a good sales presentation!
I will add to this thread after 7 day trial is up...Houston Out.
Even you state that the pricing is directly related to what the common man can afford to pay. If you ask me, that makes perfect business sense. I guess you would rather see them charge $25K / month? I don't know. And your logic seems to be that since they are priced to the common man that somehow it means that none of them work. I'm not agreeing with your logic. You seem to think that if the systems really worked, then they would be selling at much higher prices - really? Then who would buy them? These systems are not an easy sell. The astute trader knows that these algos are risky and go through draw downs - not every one has the stomach for this.
Are there a lot of crappy algos out there? Of course! Let the buyer beware as they say. But I'm not ready to dismiss them all.
As far as hedge funds and marketing these systems to hedge funds, systems like SMD don't scale to the sort of profits that a $2 billion hedge fund is looking to make. So what if a given hedge fund makes $20K off SMD for the year - a hedge fund is on a completely different scale. Having said that, I have come across some "cross-over" systems that are marketed to hedge funds but price increases as volume increases.
Too much of the former and not enough of the latter in your thinking on this issue.
Many traders start off looking for automation. Fear and a certain amount of laziness are involved in this decision. Certainly, the decision is not made because their peers are making money this way.
The trading journey can only truly begin when you take responsibility for your trading decisions and you acknowledge that you need to make a decision in the face of uncertainty. People find this hard to tackly psychologically and that is why they go to scammers like this looking for absolution.
Whilst people are searching and implementing systems like this - they are also paying money for software and putting money into the market with their losses. The market needs people that buy and implement systems like this.
Systems like this simply don't work. People want to believe so much that they ask for no evidence, they don't seek other people making a living this way and they believe that someone will effectively sell them $10,000 for $300.