is it justified for me to concern about broker reverse engineering my strategy?

[blazespinnaker]

I used to have the same concern but now I think it was silly. Just focus on your trading. You will lose your edge (if you have any) anyway in the future..... Market changes all the time!

This is a broad / vague statement.

In all things your depth in defense should always be proportional to the value it's protecting.

Any other attitude is mindbogglingly foolish and you are, or at least whatever you have, is a ripe target for the next predator to come along.

So if you have some weak edge algorithm which took little R&D or is common knowledge, sure, protecting it with much more than a u/p is over kill.

But if you have something with a smooth equity curve and significant ROI that isn't discussed anywhere you've seen, than I'd say adding a few similar fake trades now and then and opposites on a separate account is worthwhile to make the PNL look poor.

What's more, I would recommend having a trusted group of fellow traders who are reporting and tracking potential front running / reverse engineering abuses. I have about 20 or so on discord I have developed relationships with and trust not to be shills for/against brokers.

 

[virtusa]

Physically stealing leaves in general many traces that can proof it happened. There is also proof that something physically disappeared.
Electronically stealing leaves in general very few traces it happened. Nothing disappears, it is just copied.
Governments, banks and multinationals all over the world who have specialized services to protect them are unable to avoid electronically stealing, so that proofs it happens and also that it is very difficult to proof it.

European email servers from important were hacked for years before somebody found out.
Hillary Clinton's emails were copied/stolen by Russia. The NSA steals data on a massive and daily scale...

 

[henry76]

I myself received a detailed trading reports of a consistently profitable trader leaked from a brokerage firm. the reported was sent to me by a trader friend asking if I could crack it.

I've had similar experiences ( sort of), I made a fair bit trading binaries a while back , next thing I had a shady character wanting to use my trading record to sell "advice" , I never gave my permission for anyone to see my trading record etc , he admitted he knew someone at the firm involved and they had given him my trading record and telephone number to boot.

 

[ges]

LMAO!

 

[Lukebaires]

(sigh)

Some guy crashed the entire global markets with a very "simple" strategy and I can't imagine that reverse engineering it was very difficult once they narrowed it down to that one trader.

???

No proof he caused the crash and wasn't convicted of that either. The only thing they reversed engineer was his spoofing and it took an entire investigation team and using specific software from the CME itself to deconstruct his trades.

 

[ionone]

very hard to reverse engineer a strat. first you gotta find the right indicator(s) (unless it is from the most popular ones, but i doubt it) and then the parameters from it.
and if you use more than two or three indis, then it becomes almost impossible.

also if brokers steal strategies, they have stolen much better than your "holy grail"

 

[LiquidMike]

I used to have the same concern but now I think it was silly. Just focus on your trading. You will lose your edge (if you have any) anyway in the future..... Market changes all the time!

You definitely have no edge

 

[virtusa]

I used to have the same concern but now I think it was silly. Just focus on your trading. You will lose your edge (if you have any) anyway in the future..... Market changes all the time!

If you have a bad edge, you might think the markets changed. While in reality you had no edge and the markets didn't change. You had something that accidentally worked a short time.

 

[murray t turtle]

I developed a very simple strategy working on thin market, this strategy has been put in live trading on March. in 3.5 months, the return is 130% after around 10000 trades. the strategy is very simple. if the IT engineer in the broker spent 3 hours looking into my trading, he would figure out how I did it. if he competes with me, the strategy will cut profit at least in half.

below is the equity curve of the strategy.

%%
A more likely scenario is some on else discovers the pattern or simply/ markets change...…………………………………………………………………………………………………………………………...

 

[ionone]

also what they can do is simply copy the trades.
at that point there is nothing you can do