sell your strategy

<i>"No-one is going to put up capital AND trade it for you AND trust the system AND trust the porgramming skills of the developer without getting a decent handle on the rules of the system. I know my firm wouldn't!"</i>

Which of course leads into a few other pitfalls as well. Many if not most solid systems that went public have suffered or even failed due to scalability ~ saturation issues. Whenever black & white systematic rules are in place, there are ceiling limits to what it can handle in real money execution.

The second pitfall is continual management. Most any system written for low volatility periods has recently puked its guts out if left unchecked. What may test out as a solid performance now might fail miserably when vol returns to more normal levels.

Lots of problems trying to market a <b>black & white, rules-based system</b> and keep it functional well into the future. There are plenty of trust issues involved on all sides of the equation.
 
Quote from MGJ:

Meanwhile the "seller" has fully disclosed her intellectual propoerty. In effect, giving it to you for free. A dishonest firm (perhaps not YOU, but some other nefarious firm packed with Shady Characters) would always discover that their own tests confirm the system not to work. The "seller" is always sent away with nothing. Then, one month later, the dishonest firm starts trading the system without paying the seller.

How is a seller to decide whether or not your firm is trustworthy?
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Hire a good lawyer and look into licensing your trading technology.
 
Quote from MGJ:

Meanwhile the "seller" has fully disclosed her intellectual propoerty. In effect, giving it to you for free. A dishonest firm (perhaps not YOU, but some other nefarious firm packed with Shady Characters) would always discover that their own tests confirm the system not to work.
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Good point. Maybe this could be avoided if for a short period of time (depends on the system's number of trades) 2 weeks, month, the developer would give signals and the firm trade it and shared the profits. Once the system is proved this way, the developer discloses the details and the firm can program it...
 
Quote from CBuster:

For example, we will not pay up-front for a system. We might pay a % split of the profits if (and this is a big if) the "seller" fully discloses the rules of the system and we run our own tests to confirm it works.

Then we will programme the system ourselves and forward test in very small size. If all works as expected, size increases.
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that's what I had meant.

I'm really looking for the actual names of firms that might do this.


Yes, I guess it is an issue if they take it and give me no cut. If it's the case I'd ask for a smaller cut... I wasn't thinking 20% anyway.


CBuster, would you be able to pm me the name of your firm or point me towards the right department? It'd help me a lot.
 
Quote from neveragain:

if it is a crystall ball i will buy it .....if not why don't you use it yourself if it is that good
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i explained why I can't in the first post. It's not a crystal ball.... more of a spaghetti strainer.

Does anyone else know any firms that will trade your strategy and give you a cut?

thanks
 
Quote from zgtrader:

Beware of firms that will take your algorithm and then cut you off. Once you disclose your rules, you are boned.
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I'm trying to keep my mind on that, but it's not easy.

Information is difficult to sell when the other party doesn't know its value until disclosed. The way I'm currently looking at it is: I've got nothing to lose.
 
Just out of curiosity, what do you guys think this system is worth?

www.collective2.com/go/spy_1_perday

I developed it a while back (2000) and put it on C2 to get a form of cheap "auditing" and exposure. My goal was not to get subs so I charged a lot but, surprisingly, I still got subs...

Anyhow, what's this thing worth if I were to try sell it outright or let another fund trade it? Note the numbers are for 2x leverage, this thing applied to the ES and SPY options produces much higher returns.

The reason I ask is that this system has done well for me for the last few years and I'm considering taking an extended break from trading. I know you guys will ask why would I give up a money maker, well the truth is that trading is still demanding automated or not and I'm looking to retire in a couple of years...

Mike
 
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