People who misuse the system
TradeStation sales beganafter 3 years had passed, I wanted to see the sales from a major competing company, and I asked a subordinate of a member of our user group to arrange a product demonstration. The place we visited was the now-defunct Kyodo News Markets, and I met the head of their technical analysis team,Ian Copsey. Kyodo News is known for Telelette, an information terminal, and Teletrek, an analysis tool, which at that time made it theNo.2 company in the world of information terminals, but TradeStation was adopted as an upgrade to Teletrac, which surprised me a little, yet the team building and documentation were done on a global scale. In other words, their presence in the field of analysis was significant, TradeStation and many companies were already trying to imitate or use it.
Around 1994, many people denied technical analysis, saying it was about methods and demand, but a trend emerged where more people began to use technical analysis. Next, many people started to deny system trading, and to hear such things was evidence that many wanted to use it. During sales activities, I heard of a company that sold a system trading program for the entire system with annual support included, and I heard that the system package was9,000 ten thousand yen (90 million yen). The sellers were acquaintances of acquaintances, and there were rumors that several similar companies existed. Indeed, the trading systems advertised and sold in the aforementionedTrading Truth included and sold were50,000100,000 dollars, which I thought might be inevitable since it was a purchase price that included maintenance and data. However, when I later visited one major futures company that had purchased this system, they spoke very critically about system trading. When I inquired, they said the automated trading system they had implemented did not operate at all, and they wouldn’t come for maintenance. When they showed me the manual, it described16types of systems were running, and among them1 type performed well, but all the others only incurred losses. They asked me to fix it, but there was no way to touch the program inside the black box. Eventually, several companies wrote off the losses and stopped using the system.
Clearly, the practice of keeping the system part as a black box, and not disclosing it in business, became common around this time, and I witnessed many fraud cases firsthand. A era emerged where many people could thrive or operate covertly using the hot-selling product of system trading,21 that was just a few years away from the 21st century. Perhaps even now, black-box programs are rampant.
(Next time, an eruption of the American financial bubble)
