Removing the golden handcuffs

[tommcginnis]

That is a fanTAStic set of developments.
Fingers crossed for ya -- you've certainly paid the dues.
Way big .

 

[fan27]

That is a fanTAStic set of developments.
Fingers crossed for ya -- you've certainly paid the dues.
Way big .

Thanks! Even if these two opportunities do not materialize it is good evidence that I am on the right track.

 

[nooby_mcnoob]

I am currently in talks with two different hedge funds. One is a startup and another is a billion + AUM fund. The large fund has a program where they reach out to independent traders and see what they are up to trading wise and potentially enter into some sort of collaboration. The startup fund would involve me trading X amount of capital where I get a percentage of the profits. I have taken out a small loan to help keep me afloat until the end of the year so I do not have to dip into my trading capital. I am still working with several AlgoTerminal customers for dev work but am not going to spend any time on marketing FasterQuant and instead am going to focus on research and improving my current strategy mix. Also, both these opportunities appeared via LinkedIn.

What other options did you consider before taking a loan?

If your strategies are not dependent on large amounts of capital, why not just scale your account/trade size down to where it needs to be? Then once your strategies work on your dinky account, you can ask to scale it with your partners.

 

[fan27]

What other options did you consider before taking a loan?

If your strategies are not dependent on large amounts of capital, why not just scale your account/trade size down to where it needs to be? Then once your strategies work on your dinky account, you can ask to scale it with your partners.

When volatility picks up, my strategies need about $120k to handle the wider stops, otherwise, trades will be skipped because they exceed my risk limits per trade.

 

[HobbyTrading]

When volatility picks up, my strategies need about $120k to handle the wider stops, otherwise, trades will be skipped because they exceed my risk limits per trade.

I do hope that you only had to borrow a really small amount of money. And that your trade profits will be sufficient to pay back the loan very soon. I wouldn’t like to see that your trading spirals out of control, taking you down.

 

[nooby_mcnoob]

When volatility picks up, my strategies need about $120k to handle the wider stops, otherwise, trades will be skipped because they exceed my risk limits per trade.

Can't you just divide by 5? The goal that I think you should target is proof that your process works. Then people will throw money at you. The actual dollar amount won't matter until you reach capacity for the trades, which I expect is far, far away.

 

[fan27]

I do hope that you only had to borrow a really small amount of money. And that your trade profits will be sufficient to pay back the loan very soon. I wouldn’t like to see that your trading spirals out of control, taking you down.

It is a relatively small amount to supplement my AlgoTerminal dev work. No worries.

 

[fan27]

Can't you just divide by 5? The goal that I think you should target is proof that your process works. Then people will throw money at you. The actual dollar amount won't matter until you reach capacity for the trades, which I expect is far, far away.

No...you can't. My approach uses volatility based stops where the stop point distance from entry is based on current volatility. My algos will calculate the stop distance and then determine how many contracts can be traded based on account size and max risk per trade which is currently at 1.75% of account. If one contract means that the max risk is exceeded, then the trade is skipped.

 

[nooby_mcnoob]

No...you can't. My approach uses volatility based stops where the stop point distance from entry is based on current volatility. My algos will calculate the stop distance and then determine how many contracts can be traded based on account size and max risk per trade which is currently at 1.75% of account. If one contract means that the max risk is exceeded, then the trade is skipped.

Ah I wasn't clear, I'm saying divide trade size by 5. I have code that looks like this:

  quantity = (self.state.maxRiskAmount/self.state.optionForTradeQuote.askPrice)//100

I risk the entire risk amount (i.e., that the option goes to zero) which I can scale up or down. But that risk amount is dinky relative to the portfolio size.

 

[fan27]

Ah I wasn't clear, I'm saying divide trade size by 5. I have code that looks like this:

  quantity = (self.state.maxRiskAmount/self.state.optionForTradeQuote.askPrice)//100

I risk the entire risk amount (i.e., that the option goes to zero) which I can scale up or down. But that risk amount is dinky relative to the portfolio size.

Not going to work. 1 divided by 5 is .20. Can't trade .2 contracts. I am all set with my current approach as my goal is to grow my account and trade more capital, not less.