Capital Available for Traders

[mickson]

Quote from kent:

Pls explain me how the remaining 3% you expect would be able to get from the trade details (entry time/exit/lot size) would help the investor to decide? And what mechanism you have that this data will not be used to reverse engineer the strategy?

Thanks

Maybe my closing numbers statement was ambiguous, as I mean't closing PNL numbers for the day.

I have mentioned before that the RAPA score is out of 100, we have allocated 95 points on a purely quantitative basis, and 5 points on the way you describe your strategy and the examples of research applicable to your strategy you post on your wall. The best you will do on this qualitative scoring without producing the trade details is 2% at a stretch.

I personally am unlikely to allocate our money to a strategy that provides me with just cold numbers. If you look at our leaderboard 3 points or 3% can make a big difference.

A final point which I believe needs much more discussion. You are concerned of our reverse engineering your system, which means you should also be concerned that IB can reverse engineer your system and any other broker for that matter, as well as administrators. I ask you sincerely and request that you give me an honest answer, what are your trade numbers like that you would be concerned that we would bother to reverse engineer your system assuming we could of course.

I would imagine and I cannot say it applies to you in particular that most people that are afraid of reverse engineering are yet to build themselves anything vaguely worth reverse engineering. For many it is the elusive dream that they have a holy grail or about discover it. I don't wish to denigrate the wish for privacy but in my experience spanning 10yrs of full-time trading I have yet to meet a successful trader who is afraid of sharing his trades, unless for corporate stealth and protection of short squeezes in small caps.

 

[Rosedust]

You are probably right in that most people take themselves, or in this matter, their systems, too seriously. But with all due respect, it is well known that once a working strategy is publicized, it will deteriorate. Look at trend following systems. It has become more and more of a research war in that area for precisely this reason.

Somebody mentioned here that he would insert some random trades in attempts to prevent being reverse engineered by his broker.

The mushrooming of hft is also attributable to reverse engineering by hedge fund employees who then left the mother ships.

So even though i agree with you most traders don't really need to worry about this, i can also see why to a handful of them this could be a legit concern. for them, maybe they should form a cta and list on autumn gold or any other databases for the world to see their performances without having to disclose trade details.

Quote from mickson:

Maybe my closing numbers statement was ambiguous, as I mean't closing PNL numbers for the day.

I have mentioned before that the RAPA score is out of 100, we have allocated 95 points on a purely quantitative basis, and 5 points on the way you describe your strategy and the examples of research applicable to your strategy you post on your wall. The best you will do on this qualitative scoring without producing the trade details is 2% at a stretch.

I personally am unlikely to allocate our money to a strategy that provides me with just cold numbers. If you look at our leaderboard 3 points or 3% can make a big difference.

A final point which I believe needs much more discussion. You are concerned of our reverse engineering your system, which means you should also be concerned that IB can reverse engineer your system and any other broker for that matter, as well as administrators. I ask you sincerely and request that you give me an honest answer, what are your trade numbers like that you would be concerned that we would bother to reverse engineer your system assuming we could of course.

I would imagine and I cannot say it applies to you in particular that most people that are afraid of reverse engineering are yet to build themselves anything vaguely worth reverse engineering. For many it is the elusive dream that they have a holy grail or about discover it. I don't wish to denigrate the wish for privacy but in my experience spanning 10yrs of full-time trading I have yet to meet a successful trader who is afraid of sharing his trades, unless for corporate stealth and protection of short squeezes in small caps.

 

[rwk]

Quote from Rosedust:
You are probably right in that most people take themselves, or in this matter, their systems, too seriously. But with all due respect, it is well known that once a working strategy is publicized, it will deteriorate. Look at trend following systems. It has become more and more of a research war in that area for precisely this reason.

For an astute trader or asset allocator with resources, knowing that somebody is making money doing [fill in the blank] is really all they need to know. The real secret is that [fill in the blank] works. Gold has been found, and the rush is on!

I have been doing well lately, but when people ask, I talk about how hard it has been. Nobody wants to hear about the hard work.

If I ever accept an allocation, I will need to first satisfy myself that the client is unlikely to want to do his own trading. If there is any chance he is trawling for ideas, I will decline the allocation.

 

[Rosedust]

Exactly. I don't mind giving people a by and large description of the strategy, but laying out the entire system like an open book in front of them is something else. I guess this is more of an issue for systemic traders, not so much for discretionary traders.

Quote from rwk:

For an astute trader or asset allocator with resources, knowing that somebody is making money doing [fill in the blank] is really all they need to know. The real secret is that [fill in the blank] works. Gold has been found, and the rush is on!

I have been doing well lately, but when people ask, I talk about how hard it has been. Nobody wants to hear about the hard work.

If I ever accept an allocation, I will need to first satisfy myself that the client is unlikely to want to do his own trading. If there is any chance he is trawling for ideas, I will decline the allocation.

 

[mickson]

We are currently looking at seeding a new hedge fund with a guy who is head of prop trading at a major international investment bank.
He has a vol strategy expressed through the futures market and he is currently trading $200m we have had many discussions and he has provided us with brokerage notes to support all his trades. He has described his strategy at length in broad detail and we feel we know enough.
He won't reveal his secret sauce and he hasn't to any of his employers but he actually makes money consistently and he has a mature approach to this subject.

My point is that some people make such a fuss about it that they lose all objectivity.

Btw as a side note I once spent 5 yrs building a purely quant strategy with a team of 4 full time mathematicians and we would gladly show you all our trades. We had written more than 400,000 lines of code so reverse engineering was not an issue.

I am also practicing what I preach if you look at my account 10517750 this is trading a quant strategy and has more than 8 yrs of full time development. For my investors in this strategy they have access through RAPA Grabber to see the equity curve and trades all in real time.

 

[marketsurfer]

Quote from mickson:

We are currently looking at seeding a new hedge fund with a guy who is head of prop trading at a major international investment bank.
He has a vol strategy expressed through the futures market and he is currently trading $200m we have had many discussions and he has provided us with brokerage notes to support all his trades. He has described his strategy at length in broad detail and we feel we know enough.
He won't reveal his secret sauce and he hasn't to any of his employers but he actually makes money consistently and he has a mature approach to this subject.

My point is that some people make such a fuss about it that they lose all objectivity.

Btw as a side note I once spent 5 yrs building a purely quant strategy with a team of 4 full time mathematicians and we would gladly show you all our trades. We had written more than 400,000 lines of code so reverse engineering was not an issue.

I am also practicing what I preach if you look at my account 10517750 this is trading a quant strategy and has more than 8 yrs of full time development. For my investors in this strategy they have access through RAPA Grabber to see the equity curve and trades all in real time.

Well stated, it seems like only those "elite traders" who exist purely on the internet are the only ones who have these issues. quite funny! surf

 

[mickson]

Quote from rwk:

For an astute trader or asset allocator with resources, knowing that somebody is making money doing [fill in the blank] is really all they need to know. The real secret is that [fill in the blank] works. Gold has been found, and the rush is on!

I have been doing well lately, but when people ask, I talk about how hard it has been. Nobody wants to hear about the hard work.

If I ever accept an allocation, I will need to first satisfy myself that the client is unlikely to want to do his own trading. If there is any chance he is trawling for ideas, I will decline the allocation.

I agree with what you are saying but allocating money to people who are completely unknown to you, possibly living on the other side of the world to us and are potential crooks one needs to build in safety measures. This is one we feel we need.

 

[nillionaire]

Quote from mickson:

Yes Jack, we plan on having an Meta Trader 4 connection next, and based on demand for other brokerages we are interested to hear what the community would like.

How about TDAmeritrade?

 

[mickson]

Quote from nillionaire:

How about TDAmeritrade?

We have had a handful of TDAmeritrade requests, after our MT4 launched in about 10 days and bedded it down we will look into this.
Thanks
Mike

 

[dealmaker]

Quote from mickson:

I agree with what you are saying but allocating money to people who are completely unknown to you, possibly living on the other side of the world to us and are potential crooks one needs to build in safety measures. This is one we feel we need.

Remember Madoff would not disclose his strategy either and everybody thought he was front running...