Steal Your Next Trading System

The final piece on building strategy two: why the “what’s your P&L?” question is a tell, and how to steal ideas from anyone, even people losing money.

When a trader hears someone else’s idea, the instinct is to ask: okay, how much do you make doing that? Dave’s take is that it’s the wrong question, and it gives you away. Asking it means you don’t trust your own process.

Here’s the logic. If you have a real testing process, a way to backtest an idea and build a path to confidence in it, then someone else’s P&L is irrelevant. You can take an idea from a trader losing money and turn it into a good one, because the idea and the execution are two different things.

I see this constantly. Someone has a genuinely good strategy but hits the buttons himself, gets emotional, misses trades, and loses money. His idea has real merit. He’s just executing it in a way that’s hard or impossible for a human. Hand that same idea to a system that never misses, never flinches, and it can make money. His bad execution is your opportunity.

So the move isn’t to sniff out whether someone’s legit before you’ll learn from them. Even if everything they do is wrong, that’s information. A whole room of traders who are consistently wrong tells you exactly when they’ll get stopped out, which is a strategy you can take the other side of.

Build the process first. Then it doesn’t matter where the idea comes from.

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— Michael Nauss, CMT, CAIA, CDMS