We need trade privacy laws. Talk to your senators about it.
Securing successful strategy from the broker stealing it
- Thread starter yoyotrader
- Start date
We need trade privacy laws. Talk to your senators about it.
You are talking about the best case scenario and the cleanest firm. I was wondering about the middle or worse ones, and there are certainly many out there
You stay profitable for a while then it suddenly stops generating profit. Either they front run you illegally without getting caught, front run while you scale in and out , copy-trade you or they reverse engineer your strategy(if it is simple).
*Referring to brokers
LMAO are you people listen to yourselves?
If I was a broker here would be my master plan to make millions off you:
1. Give you an API so you can trade
2. Charge you a reasonable commission
3. Hope you are sort of successful so you keep paying my commissions
4. Also kind of hope you screw up so I can charge you assloads of money to unwind your shitty autotrades and make even more commission.
You have to literally huff paint to think a broker cares about your "strategy" - air quoted because it probably isnt even real.
In the context of you being a consistently profitable trader.
Do you think it is more profitable for the broker to:
1. Just Charge commissions
2. Free commissions but follow your trades
3. Charge commissions and follow your trades
when you mentioned broker, you mean the firm or the employees it hires? i guess your mean the firm, which is not the topic we are discussing here.
Wouldn't matter what I was talking about for two reason:
1. Employees and brokers have a fiduciary duty to their clients
2. A single instance of proving a breach of this contract could destroy a broker
3. Commissions are high enough that everyone is making enough money no one would care
4. Even if they did care a few employees stealing your strategy, assuming they have the capital, tolerance, and total information to do it, won't compromise your edge.
(1).
Zero risk in charging commissions. If they want to punish you for "being too good" they'll raise commissions. If your strategy is so good you're making 10,000 trades a year at $2/side they're already crushing it. Now scale that up to 100,000 clients and they don't really care about you.
To both of you - who cares if someone follows your trades anyway. More importantly - why would a broker risk executing a trade they do not fully understand? The entire premise of this argument is contingent on perfect information which they don't have.
Don't believe me? Believe there's a giant conspiracy? Let's play a game of numbers:
1. A broker employs 10,000 people.
2. Lets say around 1,000 of these people are responsible for their "trade stealing" department. Seems reasonable if they're doing this for the ~25% of their clients that make money.
It's been theorized that no more than 125 people can keep a secret. This would leak in one way or another and destroy the trust in the system. Since it hasn't leaked, the most reasonable conclusion is this conspiracy isn't real.
Last edited:
The question alone shows you are novice. i see such question here all the time. Do you even have a system with positive expectancy tested live for at least 6 months?
The way you safe guard, if you really this paranoid. Open 2 brokerage accounts, and send some orders to one and the rest to the other.
Correct, I am novice on this forum, but not to trading. Just asking a question. I take no offence at all - whatever you want to call me - paranoid, etc.. I am asking a simple question, hope not the dumbest on this forum - if you know those other threads/questions that have discussion about the same question- drop a line with the link. If not - sorry if I upset you by wasting your time with novice questions