The Expert Advisor Business
(1 votes, average: 4 out of 5)
Loading ...During the gold rush many people made money, a lot of money, but most of the money was not made by the gold diggers themselves. It was made by the government who sold the licenses to the diggers to allow them to dig and by the stores who sold picks, spades and gold pans. The forex industry is no different. The brokers make money off the spread and then there are the numerous sellers of education services, signal services and last but not least “expert advisors”.
The Expert Adviser Industry
In preparing reviews of expert advisers reviewed on this site, I naturally try to Google other sites and find out what others are saying about these system. There is certainly a lot of content out there, but often I find there is very little unbiased content for some systems.
For some systems, it is like every review I read is very high level and just espouses the same selling points that the systems website espouses. It was at this stage the penny dropped, All of this content is manufactured to help provide links and positive reviews for many of these systems. This is basically a search engine optimization (SEO) strategy to ensure the website ranks highly in google. What few links there are from independent blogs and sites are via click bank, which pays off the blogger with revenue sharing for every sale.
Next, if you look at some system’s web sites, you see that some of these sites are not written by some trader who hacks web pages in between trades, you will see they are extremely professionally constructed, complete with nice graphics, interviews with actors, etc. Lastly, if you look at other product sites, all of these sites follow the same formula: a set of claims about how the system is a system any beginner can use and is like an automated teller designed to funnel money out of the market into your pocket, a back test result proving the claims, pretty graphics, interviews with actors, heaps of cross links from other sites.
What I hope you can see is a pattern emerging. These sites are manufactured pieces of marketing spin doctoring. Their objective is to sell volume licenses. They might spend 10K on getting this site set up, and if they can sell a thousand licenses for the EA before the word gets out that the system stinks, they have made a 90K profit. What these guys are doing is a valid money making strategy.
The whole manufactured site / internet spin doctoring thing doesn’t really bother me. And to be frank a the cost of some of these systems is a small price to pay. What pisses me off with this whole thing though is there is probably some poor schmuck out there who will put his hard earned money into this system and may get bush whacked with a 60 - 80% loss on their hard earned trading capital before they realize they have bought a dud system.
Moral of the Story
Estee Lauder once said that:
“If a man with experience meets a man with money, pretty soon the man with the experience will have the money and the man with the money will have an experience”
To my handful of readers out there, please please please don’t risk your hard earned trading capital on any system until you have done a decent amount of research on it. Do your due diligence first. If you see something fishy like a near perfect equity curve or tons of really positive reviews then start digging because it is probably too good to be true.