The “Secret Algorithm” Myth, Debunked

“Our proprietary AI algorithm” is one of the most common phrases used to shut down further questions — and Felix Bick devotes an entire chapter of How Not to Get Scammed by AI Trading Apps to explaining exactly why this phrase should trigger more scrutiny, not less.

Bick’s insight is that this phrase does double duty: it invokes intellectual property protection as a reason not to explain how the system actually works, while implying deep technical sophistication that the user is supposedly not qualified to evaluate anyway. It’s a rhetorical move designed to end the conversation, not continue it.

What makes this chapter genuinely useful is the contrast Bick draws with how legitimate quantitative firms actually operate. Yes, they protect their models — but they typically still disclose the general category of strategy, whether statistical arbitrage, momentum, or market-making, along with their regulatory status, fee structure, and verifiable third-party audited performance. Institutional investors require this level of transparency before committing capital. Retail platforms that refuse to explain even the general strategy category, while asking individual consumers to deposit funds directly, are asking for a level of blind trust no legitimate institutional investor would ever extend.

Bick offers readers a simple, practical test: ask what asset classes the “algorithm” trades, what markets it operates in, and what its maximum historical drawdown was. Legitimate operations can generally answer at least the first two questions in general terms. Platforms built purely around the appearance of sophistication typically respond with vague reassurances or redirect straight back to testimonials.

This is exactly the kind of specific, actionable question the book is built around — not abstract suspicion, but a concrete test anyone can apply in a real conversation with a platform’s sales team or support staff.

For readers who’ve ever been told “it’s proprietary, we can’t share that” and wondered whether the explanation was legitimate, this chapter of How Not to Get Scammed by AI Trading Apps gives you the framework to push back appropriately.