Obtaining Trading Capital
- Thread starter funky
- Start date
It wouldn't be so bad if you are getting rich at the same time. If your signals are worth, say, an additional 0.35% return per day on an account of $1,000,000 buying power, charge 'em $1,500 for it (per day).Quote from funky:
nickel,
yeah i have thought about that. but why make other people rich?
its a chart showing what happens if i didn't have enough capital to trade at least, on average, 100 shares/trade. since my broker, and every broker that i know of, charges .01/trade with a minimum of 100 shares, my system degrades when i don't trade at least 100 shares. this chart shows that.
Understood.
You wouldn't actually be selling them the system. You would be licensing the output, one day at a time.
Whatever you decide, best of luck with it.
Quote from funky:
nickel,
yeah i have thought about that. but why make other people rich?
man oh man. Everybody givin you good suggestions, you're too damn greedy.
Look man, it's all hypothetical now. You asking people with money to trust that this blackbox of yours is not going to breakdown and fall apart. For that, they deserve a good cut of that risk capital.
How do you know that system will work well if volatility all of sudden shoot up to the moon. Meanwhile, you out there data mining on system for low vol environment.
Also, I doubt venture capital gonna go for something like this. When in the world did VC invest in unproven blackbox systems.
You better go to a prop firm. At least they can monitor your blackbox in person with some guy watching like hawk if the thing run out of motor oil.
Mr. Zen
They are clean (no brick and mortar or huge upfront expenditures) and they love that the capital is as liquid as can be....they can watch their capital every second of every day realtime. Show them a system that makes around 50%/year even for just 6 months of trading real dollars and they will sign on fast (Can we start on Monday....please, please!). You show "big money" a system that can make 50% return a year (for 1 lot or 100 shares) with the ability to raise the position size as monthly profit targets are met....your done!
Another important point for you to consider.... Is it better to trade your system with $50,000 of your own money and get 100% of the profits or is it better to trade $5 million of OPM and get a 50% return. That should be an easy decision.
Have Fun!
Another important point for you to consider.... Is it better to trade your system with $50,000 of your own money and get 100% of the profits or is it better to trade $5 million of OPM and get a 50% return. That should be an easy decision.
Have Fun!
You said in your first post that you would consider porting the code over to another system. Most prop firms have an api for fully automated trading and would likely be able to run your system no problem. You keep 100% of your profits and pay a third to half the commission rate that you based your numbers on. All you'd have to account for is interest and haircut, but those numbers are in the low to mid single digit % annualized, so you'd be able to overcome them no problem. There are places that will give you 20:1 or better leverage on overnight positions. Seems like a no-brainer to me.