Protecting your strategies

If I gave away source code it would still need to be re-written... Unless the strategy was to be implemented by the same programmer(s), on the same system, using the same data, etc. The second you change one thing - ESPECIALLY a programmer... it will be easier to re-write than to try and decipher someone else's code. \

This whole thread is nonsense. As long as you have a head on your shoulders no one will be stealing your stuff. After seeing threads like this over & over I am starting to think that paranoia is more of a barrier to entry than capital or programming or ideas.
 
Quote from WinstonTJ:

If I gave away source code it would still need to be re-written... Unless the strategy was to be implemented by the same programmer(s), on the same system, using the same data, etc. The second you change one thing - ESPECIALLY a programmer... it will be easier to re-write than to try and decipher someone else's code. \

This whole thread is nonsense. As long as you have a head on your shoulders no one will be stealing your stuff. After seeing threads like this over & over I am starting to think that paranoia is more of a barrier to entry than capital or programming or ideas.
More...

You are missing the point here. It is "not too hard" to get a code written, even if it is 5000 lines of code. What you do is hire couple of programmers, pay them good money and they will write it for you.

The value of understanding someone's else successful strategy lies in the "idea part". People interview all the time in the industry not only to get access to codes itself but also to sniff out "ideas". Once you hear a good idea, you with your team of strategists/programmers can quickly make that idea your own and possibly build something even better than the original.

The guy who created the original IP might find it hard to get fills, also mind it that he will not get compensated at all by this other firm who stole his idea.

Edit: Do you think it makes sense ?
 
Quote from gmst:

You are missing the point here. It is "not too hard" to get a code written, even if it is 5000 lines of code. What you do is hire couple of programmers, pay them good money and they will write it for you.

The value of understanding someone's else successful strategy lies in the "idea part". People interview all the time in the industry not only to get access to codes itself but also to sniff out "ideas". Once you hear a good idea, you with your team of strategists/programmers can quickly make that idea your own and possibly build something even better than the original.

The guy who created the original IP might find it hard to get fills, also mind it that he will not get compensated at all by this other firm who stole his idea.

Edit: Do you think it makes sense ?
More...

Yes that 100% makes perfect sense. They (the prop firms) have you by the balls. They interview non-stop and then say "well I'm not about to back something that I don't understand".

I know many prop firms that used "interviewing" as their way of stealing profitable ideas.

The way to avoid that is to live within your means. If you are under-capitalized for your strategy go get a part time job and build capital rather than open your mouth and tell the world how profitable your strategy is.

That's why I said "as long as you have a head on your shoulders no one is going to be stealing your stuff".
 
I posted this somewhere else.
This woman is interviewed by her brokers in this radio talk show.
She is/was an outlier.
It seems she was not too worried about her brokers stealing her strategy.

May be you could get on a radio show with your broker too if they find out your great system :D .


Original post is from mfbreakout.
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Quote from mfbreakout:

http://youtu.be/cXy9HoWX0es

Karen went from her day-job as a CFO to a trader and turned $100,000 in 2007 into $41 million by 2011. This is her story, as told by Karen herself with Tom Sosnoff on Get Tasted.

NOTE: This is for real as Karen is being interviewed by Tom Sosnoff of ThinkorSwim.

----------------------------------------------------------------------------------
 
This thread has degenerated into a mud fight full of over-generalized statements.

Some strategies are very simple and therefore would be very easy to pirate, if ostensibly profitable. However, there probably aren't many such strategies left, given the level of stat arb carried out by computers today.

It's also true that the space of strategies stretches towards infinity, and it's almost impossible for anyone to duplicate a nontrivial strategy exactly, without the source code. That said, it may be possible to approximate even a complex strategy. Having trading records can strongly constrain the hypothesis space, at the least.

Any employee at a trading/clearing firm could observe (even if by accident) a strategy, quit, and trade it for him/her self. I would certainly say it's unethical, but it may not even be illegal.

At the end of the day, there's nothing you can do to entirely eliminate the risk. But the odds of it happening are pretty slim, excepting what I would guess are very rare cases, e.g., highly profitable, simple strategies traded often, if any such even exist.

Only you know your own strategy completely, so you have to judge for yourself whether, and what, effort may be needed to obscure it.
 
It is a legitimate worry but better to think of it this way.
What course of action, when using this strategy within its window of opportunity,
allows you to transfer the maximum ammount of dollars
from the market into your bank account.
At their core, many profitable trading strategies feed off of
some "dumb money" on the other side of the trades.
If someone finds your hunting ground and comes with a Winchester while you
still use a knife, you starve. If the prey is hunted to extinction or moves
to other grounds you starve.
But the worst of all is the "dumb money" getting smart and starting to hunt you,
like what turtles went through when locals figured out how to make turtle soup.
 
I'm impressed that she was able to quit her job and succeed in trading/managing money and making a career of it (definitely a rare case of success among those who try), but I don't find those returns very impressive, as she raised a lot of money, too, during that period -- sounds like she took $40 million to $80 million over 4 years, worst case. And it sounds like she took a lot of risk (hear her "joke" about considering running off to Mexico during one particular crunch?).

Quote from clightmarathon:


Original post is from mfbreakout.
-----------------------------------------------------------------------------------
Quote from mfbreakout:

http://youtu.be/cXy9HoWX0es

Karen went from her day-job as a CFO to a trader and turned $100,000 in 2007 into $41 million by 2011. This is her story, as told by Karen herself with Tom Sosnoff on Get Tasted.

NOTE: This is for real as Karen is being interviewed by Tom Sosnoff of ThinkorSwim.

----------------------------------------------------------------------------------
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given her background, who would invest her so much money to play in the market?

Quote from Occam:

I'm impressed that she was able to quit her job and succeed in trading/managing money and making a career of it (definitely a rare case of success among those who try), but I don't find those returns very impressive, as she raised a lot of money, too, during that period -- sounds like she took $40 million to $80 million over 4 years, worst case. And it sounds like she took a lot of risk (hear her "joke" about considering running off to Mexico during one particular crunch?).
More...
 
Quote from gmst:

The value of understanding someone's else successful strategy lies in the "idea part".
More...

I have to disagree with this. Really, most every successful trading system idea is public & well known (with a very broad brush, for single leg strategies: trend-trading, mean-reversion).

trend-trading: only 2 ways of doing it ... enter in pullback, or enter on break-out.

Of course, the devil (& the edge of any strategy) is in the details. This is where experience comes into play, and this is where the value is.

I can provide the entire backtest trade-log for my reversal system (~600 trades for almost 3 years, P/F 2.46), I am sure everyone will get the idea & I am equally sure no-one will come even close to replicating that system ... but, that might provide enough motivation for some to work hard enough in that direction and create a profitable system.
 
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