System that works but lack the capital, please advise

OP does not want to invest his own money, friends and family's, or even borrow. He is likely aware of the large tail risk of his strategy, and seeks other people's money to bear this risk, while he essentially gets paid for having devised a short VIX strategy with scale-ins optimised over the recent back test period.
 
Truth_ said:
A MAN comes to me with a DEAL (selling, leasing, renting, partnership, co-venture etc) on VENTURE X.

I first look at the MAN not the DEAL, not the VENTURE. I’ve done this many times in the past, mostly on commercial real estate investments.

If I was interested, I would then want to de-cloak the OP and check-out all the details of his life. Work, education, credit reports, criminal background etc. After he made a voluntary disclosure, and if I was still interested, I would have to spend money on due diligence to get a good picture of the MAN compared to his version of himself.

There is a spectrum and type for all the people seeking capital. For example, at one end a young James Simons comes to me with a black box trading idea. He has credentials that simply are rock solid and impressive (him not his idea). That Nigerian Prince that keeps e-mailing everyone, not so much, he’s at the other end. At this time, this pitch is from an anonymous person on the internet, registered his account yesterday, says he is in the Netherlands but worries about U.S. regulation. That slides things more towards the side of the Nigerian Prince.

$25 to 50k is not much. Got a car, sell it. Go a to a bank get a loan. Get a cash advance on a credit card if the returns are that good. Why haven’t family and friends been approached? Who have you already approached and why have they turned you down?

Look at the MAN not the DEAL.

If I got involved with this (and I am not getting involved) and the blackbox was real, I would want to push $10 million through it. What happens to your blackbox when some serious money gets juiced through it? BTW, OP you would not get a piece of my $10MM. Best you get is a deal on the $50k that you seek, but I get terms to run your device as much as I want on my own.

@sle has the questions on the box, and they are not getting answered.

Already spent too much time on this, no soup for you, NEXT.
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Excellent advice.

Most of the time when people come to me:

A. They are planning a ripoff or misrepresenting

Or

B. They are well meaning but not competent
____

Of course we must, in a literal sense, often examine the deal.

Buffett and Munger are famous for:

Getting a little smarter every day.

Striving to deal only with people possessing high integrity.

Looking at lots of deals.

Saying No to almost everything.
 
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fordewind said:
You can mimic the signals from your strat to any CFD retail broker with the 200 bucks minimum deposit.
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CFD commission is high. Besides, there is order execution latency. CFD doesn't support advanced order types. Forget about CFD.
 
longshort said:
Basically the story is that in order to trade this system, regulations require an account with at least $25K to day trade (plus drawdown cushion) that I don't have. I have expenses and can save very little if any, perhaps $1K per month which means I may be able to start trading in 30+ months. Not ideal, so I'm looking for suggestions and perhaps some sort of collaboration.

I can provide more info and answer questions. From my perspective, what's most important is that the edge is real and not an illusion. This isn't random rules thrown on price data and then optimized. There's a fundamental reason why this strategy works, it can be thought of as collecting risk premium while not taking on a lot of risk.

About the risk management: Every position is always protected with a stop-loss. Each sub-system (there are two) is restricted to one trade per day. Plus it's daytrading and no positions are held overnight. Also the instrument is very liquid, has great borrowing availability, and low margins of 25% initial at one large broker.

About backtesting assumptions: All orders are market, save for profit target (limit) and stop loss. The report shown is for $50K lot size per sub-system. Slippage and commission are set to 0.03% per half turn. This works out to $30 per round turn or about 2.5 cents per share per round turn. The instrument's bid/ask spread is typically 1 cent.

For 2:1 leverage with $50K initial capital used in the report, the historical max drawdown is less than $10K after cost assumptions. Since it's daytrading and stop loss protected, open drawdowns closely match closed drawdowns. (In other words, losses are closed rather than waited out.)

As far as "proving" the strategy: The easiest thing I could do is trade someone's paper IB account. I understand paper trading has limitations yet this is low frequency not scalping, average trade is high and order types are mostly market. Since every rolling 3 months period should be positive, it should take about that long to reach a conclusion. Besides a private collaboration, I'm also open to other suggestions like a prop firm that might be interested. Thanks.

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Hello longshort,

Very good job with your trading system. I'm impressedoing with your systemom

I'm late to the thread.

Question please:

1. Did you optimize any of the variables of the trading system? If yes, did you use those optimized variables for a certain amount of years or throughout the entire backtest?

2. How long did it take you to build this profitable years? I like to always know the amount of hardwork required for each successful outcome.

3. Do you have any advice for a day trader who trying to build a profitable day trading system?

Thank you.
 
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