Any trading strategy and software realizing it can presented as "black box" – a paradigm broadly applied in science, which has been successfully used to describe systems of various nature for over a hundred years already. Within the framework of this paradigm, any system is described by three typical components - "entry", "exit", and transformation, which is actually called "black box", transforming entries into exits.

What are these three typical components of "black box" approach, in our case? First, let us discuss "exits" determining the main attractiveness of any trading strategy. They are, on the one hand, the trading yield provided with application of the given strategy, and on the other hand, risk taken by the trader. In practically every trading strategy and trading system realizing it, yield and risk are determined by a number of the same parameters – black box "entries". In our case, "entry" for the black box known as SmarTrading, is various market information. The last, third, trading strategy element is dependence existing between certain "entry" and "exit" conditions of the latter – the internal mechanism of our "black box". It could be compared with stereo controls, rotating which allows listener to tune to the station required. Therefore, the problem of effective trading strategy creation could be formulated, within the framework of stereo metaphor, as follows:

While receiving electromagnetic waves (the market information), find such controls position, which will provide for the required result in the form of program desired by the listener (required yield at acceptable risk).

What parameters are analogues to stereo controls in our SmarTrading product? In strategies used within SmarTrading system, the following factors influence amount of yield and risk:

•  Amount invested in trading,
•  Number of financial assets forming the intraday stock portfolio.

The first of these parameters is set by mechanical trading system users. The second could also be set by the user, or by internal algorithm of the system. One more important parameter, which always influences yield and risk in any strategy, is number of traders using it simultaneously. The fact of such influence is consequence of yield in any speculative trading being based on mechanism of redistribution of money resources among the market participants – some of them lose, and some, on the contrary, win. Stock exchange mechanism does not generate money; it only "takes" it from the losers not knowing the future, for the benefit of better "informed" ones. The stock exchange has no boundless "reserve" of yield; therefore, it is necessary to take into consideration trader influence on each other. The risk resulting from limited nature of the market "yield" reserves is referred to as liquidity risk.

Obviously, trading recommendations known to one trader only, have certain value. Importance of the very same information, but spread between two stock market participants, will be lower. What about value of recommendations being the property of all stock traders? It is a widely known fact, that "zero", on an average, yield is consequence of one of the effective market theory postulates on availability and instant distribution of any market information. One more fact, probably less known among traders, is that within the last few years Nobel Prizes in economy have been awarded for the asymmetric information theory subverting the postulate of all traders possessing identical information.

SmarTrading system is designed to provide personally you with that unique information. Its trading signals are being distributed among traders, providing every trader with an individual stock portfolio. Since the number of such portfolios, compiled every day, cannot be very big, the number of SmarTrading users is limited.

Hurry to avoid standing in line later

Working with SmarTrading