Securing successful strategy from the broker stealing it

There is a simple logic to disprove the assumption that your broker (Or one of it's employees) is out to get the detailed secrets of your trading strategy or to reverse engineer it. This logic is called "Future is uncertain for everyone" including your broker, including the employees of the broker, including you. Moreover, your strategy past performance is no guarantee that it will continue working in the future or even hitting a string of losses before it recovers.

So essentially, if your broker or one of their employees got their hands on your trading strategy and are following it with you (Copying your trades), they are assuming a risk as well. Maybe they will think that because you have been profitable for the last 3 years, you will continue to be profitable in the future, but there is no guarantee whatsoever still.

Rest assured. The only thing you need to worry about is that they front-run your orders (Which is illegal, yet present, but they run another type of legal risk when doing it).
 
Sig said:
I don't think the term passive aggressive means what you think it means. It means to be indirect and avoid direct conflict instead of just clearly and concisely saying what you mean and meaning what you say. With that in mind, to be perfectly clear and not in the least passive aggressive; I'm telling you that you're being a paranoid fool, just another in a long line of similar fools who have graced us with this same question. Did that fix the passive part for you?

And by the way, if you saw me posting a question that demonstrated I was clearly naive or not seeing something clearly, I would surely hope you would very directly let me know that as well.
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He will get it if he lasts. The question OP asked immediately highlights that his focus is in the wrong place. That is all you and I are trying to tell him.
 
@yoyotrader, on the OP, when you signed up with the brokerage you likely agreed to & signed off on a T&C.

if you are maintaining the account properly without illegal activity, then I wouldn't be concerned, especially whether someone is stealing your trades/trading activity.

your account, my account or anyone with a brokerage account are open season to the brokerage & its employees, each time you log on, including every phone call, your activity is captured... the account holder is tagged.

for a minute lets suppose the brokerage or an employee copycat your every single trade - remember these are trades that you are making, you are not disclosing a particular strategy, just trades.

lets take someone in the back room at the brokerage that starts a forensic on your account for the reasons a) high frequency trading b) high success rate, c) account growth.

with all three, keep in mind you are one in tens or hundreds of thousand or more account holders that have accounts ranging from $100 - $100++ million.

I would suggest that you or the next person in the account number sequence even ten before or ten after all have accounts that can be looked at & monitored at anytime.

think the IRS, once you have a name & a number its open for the organization to look at.

take all your trading successes, number of trades, account value, funds deposited or drawn out - the brokerage reports this to the tax folks.

every step of the way from the day you opened the account till you close it 'big brother is watching & looking' if & when they need to.
 
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never2old said:
@yoyotrader, on the OP, when you signed up with the brokerage you likely agreed to & signed off on a T&C.

if you are maintaining the account properly without illegal activity, then I wouldn't be concerned, especially whether someone is stealing your trades/trading activity.

your account, my account or anyone with a brokerage account are open season to the brokerage & its employees, each time you log on, including every phone call, your activity is captured... the account holder is tagged.

for a minute lets suppose the brokerage or an employee copycat your every single trade - remember these are trades that you are making, you are not disclosing a particular strategy, just trades.

lets take someone in the back room at the brokerage that starts a forensic on your account for the reasons a) high frequency trading b) high success rate, c) account growth.

with all three, keep in mind you are one in tens or hundreds of thousand or more account holders that have accounts ranging from $100 - $100++ million.

I would suggest that you or the next person in the account number sequence even ten before or ten after all have accounts that can be looked at & monitored at anytime.

think the IRS, once you have a name & a number its open for the organization to look at.

take all your trading successes, number of trades, account value, funds deposited or drawn out - the brokerage reports this to the tax folks.

every step of the way from the day you opened the account till you close it 'big brother is watching & looking' if & when they need to.
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Thanks Never2old. I don't get it if some folks here are having a bad day, don't have a dog at home to beat, and volunteer to be life coach here. I am very discrete in my request, and I appreciate anyone's time taken to briefly give me an advice to the point - not about life and other matters.
On a related note - what is the abbreviation OP and what do them mean by Medallion?
 
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ironchef said:
You think the reason your profitable trading method suddenly becomes unprofitable because your broker front run you or copy-trade you? Could it be you were fooled by randomness?

Of course I am a newbie with unremarkable trading results so I don't worry about broker stealing my trades.
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Think about it this way, what if one day you have developed a strategy that gives you consistently good return and you go about trading till you realize your edge dries up? Would you prefer to think in hindsight maybe I should have done more to keep my edge from anyone including the broker or would you rather take action now and prevent it from ever happening to you?
 
yoyotrader said:
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Is there any way to protect myself from brokerage firms or trading software (TD Ameritrade, Tradestation, Multicharts) "stealing" my strategy, either through the successful back-testing numbers showing up on their end and simply copying it, or them seeing a steady and fast account growth, analyzing and reverse engineering the strategy...
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Here's a quick and easy answer to your question...

Why would they want to steal it? If they "stole" your strategy and "used it elsewhere", to make your strategy no longer work, you would no longer be profitable, and would no longer be trading with the broker. Because you ran out of money.

Thus, the broker would no longer be making money on your trades through commish and other fees.

The brightest brokers in the world would want every client they have to be flourishing, and INCREASING their trading, not DECREASING their trading. The more you trade with them, them ore money they make.

So no, they could care less about your trading strats. They want you to make money. The more money you make, the more money they make.
 
never2old said:
@yoyotrader

"OP" is a abbreviation for 'opening post'

"Medallion", is a hedge fund Renaissance Technologies ... run by an old maths professor Jim Simons, its hugely successful performance, little known 'how he does it' other than he leverages 27x.

https://en.wikipedia.org/wiki/Renaissance_Technologies

A book written about the guy & his fund

short synopsis from NY times

https://www.nytimes.com/2019/11/13/books/review/the-man-who-solved-the-market-gregory-zuckerman.html
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I have heard about Renaissance Technologies, just did not know the name of their fund :). THANK YOU.
Many guys have responded helpfully here, but you have really defined my expectation what I was asking for. I may "look novice", but trust me, I have my share of success and knowledge as well, and will pass on my share of expertise to other more novice members. Thanks again
 
Well, buy seat at future's exchange and deal with FCM. If doing automation, pull some trades using app like Vegas video roulette or offset at different brokerage and unwind at end of the day. Can on purpose buy when you want to sell and quickly take small lose. Change how orders put in dealing with automation. But, unless you doing size, you think they going to follow anyone doing 50 lots is absurd. Don't know how many in question. If you are big, start your own brokerage.
 
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