Securing successful strategy from the broker stealing it

[systematictrader]

If you are referring purely to trading platform companies then I would say that it is a possibility. They might take a log of your trades and analyze it for the profitability and maybe even strategy. It is never wise to go for third party platforms if you can afford it.

There is a post of a backtesting software company that uploaded the strategies back to their server when doing a crash diagnostic test. I believe it is here at ET. The manager claims they do not do that but the forummer has the proof in the log. Who knows if the programmers are doing something behind their employer's back or if they are all in cahoots.

can it be done manually?

 

[henry76]

I don't really agree with last few posts , accept that highly profitable traders are rare, but there are some , if you read stock mkt wizards etc you find a lot of secrecy regarding actual methods, which seems a normal reaction to me. So I sort of agree with qaz , and the more successful the more the interest, at some point it must get really difficult to keep secret, not just programmers , but maybe even people like regulators , wasn't there are recent scandal involving a report on how serious corona was going to be in the states?

 

[virtusa]

It is never wise to go for third party platforms if you can afford it.

What is a third party platform? And how to avoid them?

 

[qaz]

What is a third party platform? And how to avoid them?

Any trading platform that is not developed by the broker themselves but able to connect to the brokerage. Eg. medved trader, sterling trader, das trader, etc. Some Brokerages do use white label trade platforms so do be careful of those too.

ps. I'm not insinuating that the above companies are involved in any shenanigans. They are just examples.

 

[virtusa]

Any trading platform that is not developed by the broker themselves but able to connect to the brokerage. Eg. medved trader, sterling trader, das trader, etc. Some Brokerages do use white label trade platforms so do be careful of those too.

ps. I'm not insinuating that the above companies are involved in any shenanigans. They are just examples.

I have the impression that almost no brokerages have their own platform.
So platforms that appear on many brokerage are less safe? I would think that a platform that is offered by many brokers would be safer than an own platform. I would think that an own platform can easily be manipulated, while a platform that is used by many brokerages would be less manipulated as it is offered at many places and would have more risk to be exposed.
Many big brokers offer several different platforms, these are all third party platforms. I see that AMP offers about 40 platforms.

 

[qaz]

I have the impression that almost no brokerages have their own platform.
So platforms that appear on many brokerage are less safe? I would think that a platform that is offered by many brokers would be safer than an own platform. I would think that an own platform can easily be manipulated, while a platform that is used by many brokerages would be less manipulated as it is offered at many places and would have more risk to be exposed.
Many big brokers offer several different platforms, these are all third party platforms. I see that AMP offers about 40 platforms.

I believe they are mostly big brokerages that have their own platform. Smaller brokers like Tastyworks have their own too but are probably more rare.

The point I was highlighting here is using a 3rd party trading platform, you are potentially exposing your trading habits to an additional party, as opposed to using the broker's own in-house platform. An extreme example is you are trading for a prop firm. The prop firm uses sterling trader, and TDA as the broker. The prop firm sees your trades via logs(in addition to your "sharing" sessions), Sterling might send logs of your trades to their server, TDA executes and tracks all your trades. That is 3 potential parties having a look at your trades and track record.

 

[systematictrader]

I don't really agree with last few posts , accept that highly profitable traders are rare, but there are some , if you read stock mkt wizards etc you find a lot of secrecy regarding actual methods, which seems a normal reaction to me. So I sort of agree with qaz , and the more successful the more the interest, at some point it must get really difficult to keep secret, not just programmers , but maybe even people like regulators , wasn't there are recent scandal involving a report on how serious corona was going to be in the states?

Interesting

 

[shh]

For people who do not have multi-layered strategy and depend on price action of for example AMD to trade AMD (linear input -> linear output), one solution could be to request dozens of charts of AMD (different time frames and different indicators) at the same time; then make a decision (based on the criteria that actually matters) in sth like excel, and then route the buy/sell/shortsell/buyback signal for execution to the broker.

 

[shh]

That is fine with me I’ll jump in with them and then average down when they jump out and then I jump out on restest of the low or high depending on whether the trend is up or down. So, they are happy following my strategy and front running me and I am happier cause they pushed the market for me and I added on to my position (by scaling in or even averaging down) during their profit taking (pause or pb) and I get out with more profit than they once the retest even though they front runned me. They thought they was out smarting me but I out gunned them! Just as they think they know what I am doing I know better yet what they are doing.

But generally, all this said, I just don’t worry about it, because even if I tell people how I trade they ain’t gonna want to copy me, because I tend to break most all the guru’s rules. And those rules have been cemented in their minds. The guru’s with all their nonsense have educated and trained us to lose.

e.g. take my journal. How many folks are gonna try what I say? Even on a sim? Practically none that read it. Because the rules I break are too much. They cannot find it within themselves to make the leap into another world. They cannot make the paradigm shift. So, they will argue why it won’t work. And the gurus applaud.

Just look at what I do.

Ranges - short BO Attempts at the top. Long BO attempts at the bottom. Unless, there is follow-thru on the BO then do the opposite. I define follow-thru in my journal. Why do I do this when novices tend to go long at the top of range BO attempts? I do it because 80% of BO attempts out of a range top or bottom fail and price goes right back into the channel within 5 bars. Also in ranges one can go long or short in the middle of the range if the range is broad enough and certain patterns are present. These I don’t think I have discussed in my journal.

2) Channels - basically same tactics as ranges because that is all they really are - tilted ranges. There is a slight difference in probabilities though. A bull channel has a slightly higher probability in terms of a successful trade by going long at the bottom. Simply because the buying pressure is greater and for that reason the channel was formed in the first place. Shorting at the top of a bull channel can also be done but you may have to take more “heat” on the trade. And there is about a 75% to 80% chance that a BO attempt out of the bottom will fail within 3 to 5 bars And 70% to 75% a BO out of the top will fail and price will go back into the channel. Fading the outer edges of channels make for great for opportunities for averaging down long in the bottom 1/3. And averaging down short in the top 1/4. And keep in mind that bull channels are basically bear flags on a higher TF and the successful BO, when it does in fact happen has a higher chance of being out of the bottom of the channel. If it has a successful BO (successful as with FT) out of the top then that is the unlikely event happening and means bulls are quite a bit stronger therefore I looked for a measured move up for PT. Conversely, for all the concepts, in bear channels.

3) BO’s ..spikes...etc I trade different ways. Sometimes holding for a run. Sometimes averaging down. Sometimes multiple entries and exits as the BO progresses. Much depends on the dynamics as the bars are formed as to what tactics I employ.

4) I generally cut profits short and lock them in.

5) I like averaging down as price moves against my position.

6) when my premise is wrong I take the loss then like doubling up or tripling up in the right direction. I get my loss back quickly and soon in the money again.

7) I don’t fret about R:R If I play the trade right that part generally works out.

8) I do pay attention to actual risk vs initial risk

9) I like adjusting my SL and PT depending on the dynamics as the bars are forming.

A few other things too but these are enough to make the gurus choke on their spittle.

Brother I like your non conventional way of thinking. But I have my doubts. It cannot be that we benefit from the brokers interference both on a momentum and mean-reversion style. Maybe the concept of averaging down is somehow Ok on equities because of the natural updrift. But I am sure on sth like the FX, where the monkeys shake the trees, your approach will be dangerous. The point of bringing up FX to compare, is to suggest that maybe it is the equity updrift that is helping you, which you perceive as front running.

Do you also short sell stocks sometimes?
I have to read your thread to be a better judge. For now my comment is generic.

Cheers,

 

[volpri]

Brother I like your non conventional way of thinking. But I have my doubts. It cannot be that we benefit from the brokers interference both on a momentum and mean-reversion style. Maybe the concept of averaging down is somehow Ok on equities because of the natural updrift. But I am sure on sth like the FX, where the monkeys shake the trees, your approach will be dangerous. The point of bringing up FX to compare, is to suggest that maybe it is the equity updrift that is helping you, which you perceive as front running.

Do you also short sell stocks sometimes?
I have to read your thread to be a better judge. For now my comment is generic.

Cheers,

I only trade the eminis (Mostly ES) and micros like MES. It has been years since I traded stocks.