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How to sell a good Expert Advisor

Good Expert Advisor?

I am going to write a story about a Forex Expert Advisor (EA) that I saw some time ago in the Forexfactory web.

With the next example we should be able to see how the world of EAs is quite profitable, and not precisely to traders but the the EA owners and developers.

This started with a typical “promotional” post in Forexfactory.

There was not even need to develop his own website or anything like that.

There was only needed some posts in a blog written in a way that attracted people.

In the first post, the author, so-called baokydev, explained the supposed benefits of the system he had just developed.

Image via Geralt/pixabay

This was done on October 31st 2013, although we can see it was last edited the November 20th of that year.

Anyway, in the first post the author told us:

  • He showed 4 EAs developed by him.
  • You could see the overwhelming results of the EAs in the screenshots.
  • One of them had won 45% after 3 weeks, another 80% in 2 weeks.
  • The developer estimated a return between 0.5 and 1% daily.
  • The price of the EAs was 550 USD.
  • He had to tell you how to set up the thing.
  • Mentioned that with a 1,000 USD account he could between 400 and 1,100 of profit in two weeks but taking more risks.
  • The developer said that the reason for developing the systems was his failure with manual trading and the emotional problems it has.
  • His profession was computer programmer, hence the easiness to develop the systems.
  • He put the system in myfxbook. (After some time the account is private so you cannot see what is going on, except one account with a 98% loss).
  • The broker should use leverage between 200 and 500.
  • The minimum account should be of 1,000 USD.

First of all I would like to comment some of the details mentioned in the first post.

It seems that this developer hoped to find enough people with around 2,000 USD who were able to pay 550 for the system and open the Account with 1,000.

So he was asking for 30% of the account just to start.

Great.

Anyway, that would not be that bad because with the promised 1% daily you should be able to make at least 20 or 25% profit a month.

Supposedly you should be able to multiply your account by 10 or so every year.

Promises of easy money

With this kind of promises it is not strange that this man found some buyers to the system.

As you can see in this case there were people who bought this system, even though that it was working only for a few weeks before it showed that it was not gold all that shines.

As you can suspect by what I have already written the system failed miserably after some time, actually just a few weeks, something that was open for everybody to see in a well known forum.

It is not like some other cases, where the author sells the system from a website and many of the conversations and questions referred to it disappear completely after a while.

For what I read in the thread, the system was a disaster from the point of view of money management. It used martingale tactics as soon as it started to lose. Everything a trader should not do.

Another detail is the fact that the developer had said that he had programmed 20 systems and at the end took the four best throwing the rest to the bin.

I suppose that the rest were disastrous loses very soon while the 4 “successful” demonstrated being the best, at least for a while, and of course, in demo trading.

Although the developer said in the initial post that he had tried the system in real, we have to think that 2 or 3 weeks of testing is not enough, at all.

You can try some systems during 2 weeks or months and have good results but it is almost impossible that the system will perform well in periods longer than a year.

The end of the thread ended with the closing of the systems and also with the apology of the developer whom admitted that it did not work as expected.

Some people reported that there was a drawdown of 10,000 dollars in the previous moments before the account was deleted from being publicly seen.

In the end, I do not believe that it was very worth because I doubt he could be able to sell more than 20 or 30 EAs, perhaps not enough to recover the 10,000 dollars, although I am not sure about this, since the 10,000 could have even be faked.

This lesson was very good for the EA to learn something: to sell a system (even if it does not work).

He learnt things like:

  • It is better to sell the system without compromising own money in accounts.
  • The objective has to be selling the maximum amount of EAs in the shortest time possible.
  • The miracle products have lots of potential buyers.

Conclusion

Do not let yourself get carried away by emotions when you see many beautiful words praising the marvellous things of a trading system, whether it is a Forex or a futures one, especially if the system promises “great returns”.

There is no such a thing as “easy wins” in Forex. In fact it is easier winning money by developing systems than by doing trading. What does not mean that those systems are winners, precisely.

What matters is that the customers have confidence in the system.

The Forex world is very complicated.

Here is the thread again, for anyone willing to see it in detail.

Regards and good trading.

La entrada How to sell a good Expert Advisor aparece primero en CFD And Forex Trading.



This post first appeared on CFD And Forex Trading, please read the originial post: here

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