Sharing a Profitable Strategy?
Suppose you have a super profitable strategy that works in all markets. You definitely wouldn't want to make it public (whether free or paid). Why? Because if everyone knows your money-making secret, there can be only two outcomes: either it succeeds, or it fails.
Everyone will follow and copy your strategy.
When many people use your strategy, slippage becomes a critical factor. Suppose you were once able to close positions at your target profit level with minimal slippage. Now, when many people use the same strategy (say 1 million users), when the closing signal triggers, it means 1 million users are simultaneously trying to close positions. This becomes a race to see who can submit orders to the exchange the fastest. Users at the end of the queue are likely to face significant slippage, especially when the traders ahead of them are deploying large amounts of capital.
The Best Game Host
Other whales will try to break your strategy.
When one million users (as in the above example) use the same strategy, it means the whales get to exploit a huge liquidity pool. Since your strategy is also open to whales, they know exactly how to set effective traps that your strategy cannot avoid. The logic that once made you profitable now becomes the logic that kills you.
For example, in the past, when a currency pair's Relative Strength Index (RSI) stayed below 10 for 15 consecutive candles, it tended to rally and surge sharply. Your trading logic was originally designed as a buy strategy for this exact scenario. But now, the big players understand your logic. They will set a trap: after you and the other one million users buy the pair, they will dump the pair further, triggering your stop-loss (if you have one) or directly forcing you into liquidation.
There is no win-win in trading.
Author:AI Router
Link:https://www.airouter.me/blog/ai-trader-post-07
Non-commercial reuse with attribution (CC BY-NC-SA 4.0).