Monetization path for selling / licensing trading strategies

[Aquarians]

get list of newsletter subscribers or individuals who think there is a silver bullet. Sell them the magic beans. All else is meaningless

There are two steps in establishing a business: execution and selling. Execution is a sine qua non of the whole and may take years, yet it's at best 10% of the whole effort. I've pointed out before, there are 100 million executions on GitHub all worthless from a cas$hflow point of view.

Selling stuff is 90% of the effort if not 99%. Chances are most attempted businesses will never sell anything yet sell enough to become viable.

 

[interdim]

Maybe later.



That's something I haven't considered but will look into.



There is a bit of paradox with trading strategies. Millions of people look for them and it's reasonable to conclude that the vast majority won't find anything worthwhile by their own, best they'll use some well known systm like "the wheel". The time, effort and money they put into chasing something of their own also counts as cost but people forget to count that. So the alternative is purchasing some already designed strategy / strategies, similarly to paying $50 on some "Volatility Trading" educational book. Those books are a dime a dozen yet they sell for fifty bucks.

So people spend $1000s in hidden costs yet when it comes to purchasing some ready-to-use strategy the common view on it is paradoxical:
1) A strategy for sale is worth NOTHING because it doesn't work.
2) A strategy for sale is INFINITE (defined as way more money than you could afford to pay for it) because it works.

Bottom line common view is that you'll never get any value from purchasing a strategy because it's either worthless or you can't afford it.
Something tells me there must be some gray area between these two extremes.

Fair enough but it's a tough to find that gray area where those customers exist. I hope you find that niche or clusters of individuals seeking such services.

 

[traderjo]

I intend to make the next step and turn what I have into a commercial product. In summary I wanna make money by selling / licensing trading strategies. The vehicle for doing so is the development and commercialization of a software for delivery of algorithmic trading strategies to paying customers. Customers who have an Interactive Brokers account would download and install an application which would connect to IB Trader Workstation on one hand and to a server (cloud) provided by me. They could then configure trading strategies to be run with their account, choosable from a set which depends on the subscription plan they choose to pay for.

So far I have developed:
1) An application for designing and (back)testing trading strategies involving options. The options factor is essential since I wouldn't get the results I get without them.
2) A proof of concept module of the said application for running the trading strategies produced at step #1 automatically with Interactive Brokers.

What I'm working on next on a technical level:
a) Develop the POC #2 into a robust autotrading module (tracking positions, handling disconnects, partial fills etc).
b) Refactor trading app from desktop into a "cloud" version.
The trading application / platform is developed in Java and runs as a standalone desktop application. This is fine for me using it but for selling it I don't wanna give up the source code and with Java this is impossible if client gets the jar files. So step #b is to refactor the monolithical standalone desktop application into a client-server architecture with most logic running on the server and the client basically only accessing the GUI module which connects remotely rather than local.

But for success in business, technical execution is not enough. It's necessary obviously, but GitHub has 100 million technical executions that are largely worthless from a commercial point of view.

So in addition to the technical roadmap, there's also a business roadmap ahead:
Biz_1) Offer a free version of the client app, bundled with some default / demonstrative / well known trading strategies. Don't expect these strategies to work wonders and also even they may not be free forever because running a server costs money. So it's more like a trial version with extended use.
Biz_2) Offer a premium plan which delivers and runs some proprietary strategies that I developed myself. First one is a relatively HFT one, not bad if you get the executions but too infrequent for me to make much of it. Still $5 / year or so for it would result in almost surely making more than a customer would pay for

Biz_3) Offer a "deluxe" plan which basically delivers this:
View attachment 248278

The whole point of the whole effort is to deliver Biz_3 to either:
a) At least 1000 retail clients paying $500 for a license to use it.
b) One or more professional hedge funds who pay at least double the projected amount at #a.

What I'm looking for is an associate / partner to carry out the above presented business plan. Think of the whole system as 90% ready and if you're developers you know what "90% ready" means. Only that 90% took 10 years, so think of that a bit before scoffing at the effort involved so far.

I am assuming you are risking your own money ( small amount may be) by trading the strategy you are trying to sell to anybody and everybody.. IF the answer is YEs that is good and honest
If the answer is NO then it is just snake oil sales... dime a dozen! + the legal issues .. (IN US it seems though if you badge this as "Trading education" you don't need to be licenced etc )

So why not use copy trade facilities such as C2 or Zulu? ( there might be others) and in that see if you can link your "Real money account" rather than paper trading/demo
That way you achieve the following
- keep making the 2 digit return you mentioned on your capital
- Get potential fees by followers
- Build a track record and reputation
- Legal issues go away I think C2 s a CTA and you are covered!
I hope you consider this option

 

[931]

Last time i checked C2 fees are 30%+.