AlgoDeal

[Algo_Design_Kid]

Quote from elefevre:

We had a release two weeks ago.



Well, that's jumping to conclusions, don't you think?
First of all, we have not closed shop.
Second, concerning the threads on the support site, in many cases, the questions were answered, but were reopened automatically as someone added more information. I have now closed most of them again.

Anyway, in the past few months we have been in contact with a limited number of quants (not necessarily through the website). They have provided us with strategies that have much higher quality than what we find on our public backtest platform. So far, only a very small number of users of the platform have submitted strategies that are worth investigating more. We have started discussing with them too.

Our website will reflect this change of strategy in the coming weeks.

If others feel that we should have been discussing with them as well, feel free to get in touch (our contact details are on the website).

lol - so let me get this straight. You have made this website, taken thousands of strategies from others, and then taken all of this information and incorporated with "outside help"?

So again, just to reiterate, this was just a large data mining experiment labeled with the guise of something much different. You really can't church it up to make it sound like anything less.

I hope your T&C was written well because I can see very many people upset along with a lasting bad reputation for whomever was funding this data mining experiment in the first place.

I would be interested to know if any users that have submitted strategies to this charade have anything to add.

 

[elefevre]

Quote from caementarius:

I think most folks who can work up a good strategy can work out the technical details of backtesting and trading it - which leaves the main advantage of algodeal being connections with capital.

Yes. However, that costs a lot of time, especially if you want a robust enough system, close to the market. We have already worked out that part.

Note that we also offer back office services, a legal framework, etc.

Quote from caementarius:
However, if you wait a year before scaling up, that's roughly the amount of time (depending on the strategy) that other capital would want to see in terms of historical performance. So, it's a little less exciting to put a lot of sweat into something for the chance of 10% on whatever is made with $100k.
[/B]

How about what is made with $10M? We are not interested in strategies that have a capacity of a hundred thousand $.

However, most important is that we are taking ALL the risks. The strategy author cannot lose any money at all if his strategy fails. I believe that gives us an edge over the fact of risking 10K$ of one's own money.

Quote from caementarius:
I believe in the idea, and put together some unoriginal examples that score in the 80s, but at some point you will probably need to spend more time/effort building relationships. [/B]

Indeed. That's what we are doing now.

 

[elefevre]

Quote from Algo_Design_Kid:

lol - so let me get this straight. You have made this website, taken thousands of strategies from others, and then taken all of this information and incorporated with "outside help"?

So again, just to reiterate, this was just a large data mining experiment labeled with the guise of something much different. You really can't church it up to make it sound like anything less.

Our original goal with the whole thing was not so much to find strategies as much as to find authors with whom to build a lasting relationship. Finding the best performing strategies was the way to finding those people. Ideally, we would regularly contact them to maintain strategies, discuss changes in investment amounts, and talk about adapting the strategy to various contexts. (does that sound like a lot of work? well, we are a small team, and we do not have the capacity to maintain all the strategies by ourselves. I guess this is no entirely free lunch for strategy authors)

Also, we wanted to end up with a large catalog of strategies (50, say), so that risks would have been somewhat mitigated.

We thought that would work. We were mostly wrong. The problem is that strategies are too mediocre to go much further (although we did identify a couple of people that we are now talking with).

You might not believe me, but I do hope that the fact that I, a member of the Algodeal team, am responding, shows that we are in good faith. I'm not even trying very hard to hide my identity; if you are really upset about us stealing strategies, it wouldn't be very hard to track me (or even any other member of our team) down and ruin my career.

Quote from Algo_Design_Kid:
I hope your T&C was written well because I can see very many people upset along with a lasting bad reputation for whomever was funding this data mining experiment in the first place.

I would be interested to know if any users that have submitted strategies to this charade have anything to add.

Well, I would definitely be happy to talk with anyone who have the slightest doubt that we have cheated him. If any of those people are on this thread, please do let all participants know.

@Algo_Design_Kid: you mind also be interested in putting a call on our support site, and see how our users respond. Although, to be honest, I'm not sure we have reached a critical user base that would ensure a response.

In the end, we are still a startup. We had a bold vision and, given the odds of any startup to make it, we might fail. But we are not crooks.

 

[caementarius]

Quote from elefevre:

Indeed. That's what we are doing now.

Cool - are there any asset classes or timeframes you are particularly interested in? Do you generally contact people after a high score or only after you've done some review of their code?

 

[asiaprop]

this is the biggest bs I have EVER read, here is why:

1) Every experienced trader and investor can conclude whether a strategy is sound or not by looking at trading blotters containing a few months of trades. You dont need any strategy code for that whatsoever. If you send me a blotter of, lets say 1000 intra day trades I will tell you exactly what the strategy does, and how its risk module is structured.

2) 10%??? I get 10% at ANY investment bank that has interest in running prop algo strategies, why do I need you guys? Plus I get all the IT, programming, data, software/hardware resources for free as icing on the cake. What do you have to sell on top of that???

3) If I, as quant need help programming, I would definitely NOT give my strategy away to suckers like you people. I would hire a cheap programmer for 3000-4000 RMB in China (yes, the top CS graduates from the best schools in China cost just that per month, I hired several of them and they do an excellent job).

4) So your selling points are exactly what? a) backtesting platform? (I have and all other quants who approach you with strategies have otherwise how would they develop and test their ideas? b) platform for trade execution and backoffice? My prime broker (such as Interactive Brokers) offers all that and more. c) Legal framework? You mean legal bla that spins things in your favor with the court location in Paris should things go awry? Funny...to say the least...d) NO RISK???? WHAT ARE YOU TALKING ABOUT? NO RISK EXCEPT SOMEONE IS STEALING MY IDEAS AND WORK????

You guys must deal with real idiots in case you find a single soul who is dumb enough to bite. Enough said.

Quote from elefevre:

First, a disclosure: I am a software developer with Algodeal.

The idea is that we are planning to discuss capital with our investor on a per-strategy basis. Capital will also vary during the life of the strategy, typically lower at the beginning, then maybe 5x higher 6 months later, then maybe 5x higher again after 6 more months (depending on the returns, obviously).

It is difficult to give a definitive number, but our investor has significant capital and would not be interested in strategies that have a capacity of less than several millions.

An important thing is that the investor is taking all the risks. That is, if the strategy loses money, the strategy author will not lose a dime.
That is why we require the code of the strategy. It is too easy to overfit during backtesting. We've learnt that reading the code is the only way to know for sure whether the strategy is based on sound principles (and, sadly, we've also learnt by reading source code that the vast majority of strategies submitted to us that look good on paper -- that is, that have good metrics -- are actually dreadful).

I should also point out that we've also learnt that quants need help programming their strategies after they've managed to demonstrate their point. So, once we've entered into a more formal relationship, lots of energy on our side is spent making the strategy code faster, more maintainable, and more resilient.

Now... "you have the language barrier, too, if you don't speak French"?! That's a new one. I'm curious to hear how anything on our website make @rolextrader think that we would have any trouble speaking English. Many of us have been (or are still) living in English-speaking countries. Or, as a matter of fact, *are* from an English-speaking country.

OK, this reply is getting quite long. Let me summarize with this. We provide the following things:

• a platform for backtesting
• a platform for live execution
• a backoffice
• a legal framework
• access to significant capital
• no risk

If you have all this, then you do not need us. If you only need some of these things, then we can talk too, provided you are willing to take some risk yourselves (many of our deals have been custom ones).
And, in the end, if you just want to use our platform for free, then you are welcome to do so.

I hope this clarified things a little.

 

[asiaprop]

of course!!!

I cannot even believe there are some here who seriously talk to those bastards. Seriously, I am boiling when I read such audacious posts. How much shabbier can it get???

Quote from rolextrader:

The deal still sucks, your explanation notwithstanding. Here's why: An investor usually pays a hedge fund 2/20 all the while the investor is at risk. The investor is not privy to details behind the trades, simply the global view of the system.

Then there is the issue of jurisdiction and enforcement in the absence of a binding agreement if you guys rip off the code. it's a financial nightmare to come after a French company.

Bottom Line: Only a fool would give an internet vendor his source code for a measly 10% even if the vendor was his next door neighbor. This sounds like a scheme to find a sucker who has profitable code and have it snaked away from a bunch of strangers offshore.

 

[asiaprop]

would be curious to know how many license agreement those guys are violating by allowing the usage of financial price data by third parties to run locally or remotely....just wondering...or did you guys pay up big time for a license that allows free dissemination of pricing data to third parties? I have never heard of such deal but who knows what goes in ol' France...

Quote from caementarius:

elefevre -

I'll be glad to see when you all are making trades and running money. Until then, I really like the idea - especially if you are providing significant value.

Significant value would be, IMHO:

1) Ability to validate, as much as possible, a "good system", so that your capital connection is confident
2) Ability to get size for a "good system" -- i.e., if you start a great strategy with $100k, then $500k 6 months later, more 6 months later, I'm not sure that is so great. While bootstrapping and connecting with capital might be hard, it's not impossible. In fact, I'm pretty sure if I had the system I could find the money on my own. $1M to $5M would be more reasonable.

Also, add ETFs when you can. How hard can it be? I think ETFs are used a fair amount by system developers.

 

[caementarius]

Quote from asiaprop:


2) 10%??? I get 10% at ANY investment bank that has interest in running prop algo strategies, why do I need you guys? Plus I get all the IT, programming, data, software/hardware resources for free as icing on the cake. What do you have to sell on top of that???

Please sign me up at an investment bank with this deal. Looking forward to hearing from you. Thanks.

You guys must deal with real idiots in case you find a single soul who is dumb enough to bite. Enough said.

Helloooo? You do realize that I am right here reading this post, don't you?

 

[asiaprop]

a) you could contact pretty much any of the top ibanks. If you trade stocks contact their equity department, start with HR if you dont know anyone else. If you have control over strategies that are worth north of 2.5 sharpe ratio units then people will die to talk to you. If you cannot take it from here then you may want to put a little more effort into your search if this is what you really want.

b) yes and I guess you are one of those idiots cause you are taking this bs deal really serious!!!

Sorry but I have worked too long in this business I am not even willing to argue with you about this, if you believe I am wrong then I respect your view but wont change mine.

Quote from caementarius:

Please sign me up at an investment bank with this deal. Looking forward to hearing from you. Thanks.



Helloooo? You do realize that I am right here reading this post, don't you?

 

[mcgene4xpro]

The best response to algodeal BS.

Thanks

Quote from asiaprop:

this is the biggest bs I have EVER read, here is why:

1) Every experienced trader and investor can conclude whether a strategy is sound or not by looking at trading blotters containing a few months of trades. You dont need any strategy code for that whatsoever. If you send me a blotter of, lets say 1000 intra day trades I will tell you exactly what the strategy does, and how its risk module is structured.

2) 10%??? I get 10% at ANY investment bank that has interest in running prop algo strategies, why do I need you guys? Plus I get all the IT, programming, data, software/hardware resources for free as icing on the cake. What do you have to sell on top of that???

3) If I, as quant need help programming, I would definitely NOT give my strategy away to suckers like you people. I would hire a cheap programmer for 3000-4000 RMB in China (yes, the top CS graduates from the best schools in China cost just that per month, I hired several of them and they do an excellent job).

4) So your selling points are exactly what? a) backtesting platform? (I have and all other quants who approach you with strategies have otherwise how would they develop and test their ideas? b) platform for trade execution and backoffice? My prime broker (such as Interactive Brokers) offers all that and more. c) Legal framework? You mean legal bla that spins things in your favor with the court location in Paris should things go awry? Funny...to say the least...d) NO RISK???? WHAT ARE YOU TALKING ABOUT? NO RISK EXCEPT SOMEONE IS STEALING MY IDEAS AND WORK????

You guys must deal with real idiots in case you find a single soul who is dumb enough to bite. Enough said.