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Good points, thanks! I have several systems, however they are sort of designed with different objectives in mind, e.g. some are aiming at absolute return, some relative, some maximum risk-adjusted return etc., hence not really interchangeable. Multiple systems with same objective is in my plan...

Backtesting SR is about 2.0 in backtesting which was done for a total of 5 years, this system only trades S&P500 e-minis. The degradation is clearly a result of different market regime so not a result from slippage. After having show such consistent performance for more than 2.5 years (equity...

This all depends on how you define "edge"? For me it can mean anything, but in my particular case it means that I'm able to generate a signal time series which has a high degree of predictive power measured through various statistical properties. If edge means something very concrete, like...

Thanks for your input. The thing is, I have other trading systems, but the problem is that the clients wants THIS particular system, hence I'm out of options here. Back testing drawdowns of similar size have been observed. Position size are automatically adjusted according to a simplified "Kelly...

No holding period longer than a day (i.e. no overnight position), average is typically a few hours. Annualized standard deviation of daily returns ranges between 25-35%.

Thanks, will PM you shortly!

Hi all, I've been running a futures trading system now successfully for the last 3 years, with annual returns ranging between 80-120%. Last 6 months have things have turned for the worse though, where it seems like the systems has "stopped" working (I put this in quotation marks as I don't know...

Yes, I've been seriously mulling over this issue, I definitely agree with you! Thanks for the advice.

I agree! I mean, technically I can accomplish what they can accomplish, but in a longer period of time, however vice versa doesn't hold true...

Another related topic: Is "giving away" 60% of the ownership too much? I mean, by doing so these two partners together can theoretically override me as I'm no longer in majority, any thoughts around that?

Got it, will think about a setup along this line of thinking, thanks for the input!

What could a duration clause look like then? Simply give them, say 3 months, to raise X dollars in capital, otherwise the option will expire and then has to be renewed based on current valuation at that point of time, or what? Just bouncing some ideas here...

If there's an expiry date on the option, would this then simply mean that the agreement has to be renewed, based on the current valuation on the date of signing the renewed agreement then, or?

Yes, but how to mitigate the "long option" conundrum? By stating that their deferred payments can only be done 1) by their own cash infusion, and/or 2) through profits generated on capital _they_ have raised, i.e. not from "my share" of the capital base?

Thanks for your feedback. To answer your two bullets above: 1) I don't live in the US and the main place of business is outside of the US so tax is not a major issue, 2) This is a correct understanding. The idea of bringing these two partners onboard I'd say are two-fold, namely 1) Grow AUM and...

Well, if there's one thing I've learned is that IP protection clauses are merely a tool for litigation, if the IP dissipates irreparable damage is already done - can I some how contractually control *physical* access to the source code? I mean, if I become partner of GETCO or Citadel, I would...

I got another piece of advice from a veteran hedge fund manager and he suggested to have another option clause to give me the opportunity to buy these guys out in case progress is not satisfactory (I guess this has also to be defined, both in terms of AUM contribution and/or time?). When...

You mean that if the "exercise the option" at a late stage, what you are saying is that they get a bargain if the valuation is much higher at that point of time, did I understand you correctly? On your second comment: Valuation is based on expected returns as a result from the AUM, not AUM itself.

Thanks for all your advice guys! Will keep you posted.

I'd go for Investment Manager, or even more formal Managing Member if you operate an LLC.