Can a System be reverse engineered just from viewing daily trades/account statements?
- Thread starter CPTrader
- Start date
Quote from OddTrader:
Interesting!
Could you provide any pointers for more details? Thanks!
"When Genius Failed" by Roger Lowenstien. Chronicles the rise and fall of the fund and explains the paranoia the partners felt about having their trades front-run and piggy-backed.
This is how the fund grew to be so large and took on so much risk, no one new the whole picture and how much they were into.
Yes, that's my thought as well. If the system isn't based on typical timeframes or typical technical methods then the likelihood of reverse engineering goes way down.
And to me the biggest danger is in being front run, rather than reverse engineered. Monroe Trout said he used multiple accouts to trade the same system. If one broker consistently underperformed (too much average slippage) then for whatever reason (frontrunning, sloppy brokers, poor execution platform, etc.) he would just close that account.
i've wondered this before as well. i would imagine, the more degrees of freedom in a system, the more difficult it would be to reverse engineer. in this case, my systems are highly decipherable.
brokers have access to some pretty valuable aggregate information, they can see all pending orders, and they can see where stops are (if they've been submitted). i wonder if it's legal for them to trade on this information.
brokers have access to some pretty valuable aggregate information, they can see all pending orders, and they can see where stops are (if they've been submitted). i wonder if it's legal for them to trade on this information.
Actually this happened to me. I sold the open every Friday and covered it at the close every Monday. It caught on and everybody did it. Bummer. So many did it that now the system is oscillating in transition to the opposite strategy. Just watch. You can help if you like.
As I'm sure you know, if you had the trade log and the TIME the trades were made, reverse engineering would be simple.
Quote from OddTrader:
Have you actually tried this yourself? Does it work?
I have not tried it myself.
I don't see why it would not work - as long as you don't leave the positions open too long and get a margin call in the losing account.
What are your thoughts? Do you see a problem with this?
Quote from Tea:
If you are really worried, open two accounts with separate brokers. Every now and then - open your trade with one broker and close it out in the other brokerage account.
YOU personally will be net flat, but the two accounts will still have live trades in them. Then at your convenience, offset the two open trades so your accounts will be net flat. This will cost you an extra commission (paranoia has its price).
Anyone who tries to figure out your system will be highly confused.
The account is often a record of the person trading it. Usually moreso than the market or the market's potential that is being traded.
Once you get that staight, can consider that what you primarilt deal with is people in all accounting scenes
OT from here on out.
If anyone wanted to improve a recorded performance just to be supportive and helpful, they could really be very helpful by primarily looking at any given person from about four viewpoints. Self evaluation is possible too, of course. Or you could assess some of the ET'ers who lay it all out there to be seen.
Looking at traders carefully and thoroughly also points out why books are not helpful for learning to trade.
One of the four considerations deals with the fact that improvement in performance lies particularly close to determing how good a fit exists between the intellectual and emotional things traders match to be able to "act".
Brains versus beliefs is always where the rubbr meets the road.
Beliefs are emotionally based and where beliefs come from is definitely not in books.
What people believe is what makes them act the way they do. Some people in ET think they can keep emotions out of trading. That is, they tool along "intellectualizing" their time in the market. There is little matching possible for rational actions in that setting.
Once you get that staight, can consider that what you primarilt deal with is people in all accounting scenes
OT from here on out.
If anyone wanted to improve a recorded performance just to be supportive and helpful, they could really be very helpful by primarily looking at any given person from about four viewpoints. Self evaluation is possible too, of course. Or you could assess some of the ET'ers who lay it all out there to be seen.
Looking at traders carefully and thoroughly also points out why books are not helpful for learning to trade.
One of the four considerations deals with the fact that improvement in performance lies particularly close to determing how good a fit exists between the intellectual and emotional things traders match to be able to "act".
Brains versus beliefs is always where the rubbr meets the road.
Beliefs are emotionally based and where beliefs come from is definitely not in books.
What people believe is what makes them act the way they do. Some people in ET think they can keep emotions out of trading. That is, they tool along "intellectualizing" their time in the market. There is little matching possible for rational actions in that setting.