I thought I'd post a new thread for this as it seems a topic warranting its own discussion.
Since our ultimate goal as traders is to achieve profitability, shouldn't we be concerned the strategy that brings us this profit isn't being watched like a hawk by the gatekeepers that grant us access to the game (retail dealers/banks)?
In theory, once the private trader becomes consistently profitable, the gatekeeper - at their sole discretion - can tip the traders hand and watch, record and analyze all the traders entries, exits and stops.
It doesn't matter if we go through retail brokers or prime brokers on the interbank. Our gatekeepers at every level have the ability to watch and record our every move making the brute force or cracking of our profitable strategies a real possibility.
That being said, and assuming a trader IS consistently profitable, is the reverse engineering of a successful strategy by the gatekeepers something we should be concerned about?
Why or why not?
If so, what can be done to minimize, avoid, obfuscate or thwart a gatekeepers attempt to brute force a traders strategy?
Any discussion and opinions welcome.
Note: I believe a good illustration of this stems from a hotshot hedge fund manager in the late 90's who bragged about his profits only to have Wall Street catch on, crack his strategy and front run his trades into the ground. I donât know fundies name or details. Perhaps some of you do and can share?
Since our ultimate goal as traders is to achieve profitability, shouldn't we be concerned the strategy that brings us this profit isn't being watched like a hawk by the gatekeepers that grant us access to the game (retail dealers/banks)?
In theory, once the private trader becomes consistently profitable, the gatekeeper - at their sole discretion - can tip the traders hand and watch, record and analyze all the traders entries, exits and stops.
It doesn't matter if we go through retail brokers or prime brokers on the interbank. Our gatekeepers at every level have the ability to watch and record our every move making the brute force or cracking of our profitable strategies a real possibility.
That being said, and assuming a trader IS consistently profitable, is the reverse engineering of a successful strategy by the gatekeepers something we should be concerned about?
Why or why not?
If so, what can be done to minimize, avoid, obfuscate or thwart a gatekeepers attempt to brute force a traders strategy?
Any discussion and opinions welcome.
Note: I believe a good illustration of this stems from a hotshot hedge fund manager in the late 90's who bragged about his profits only to have Wall Street catch on, crack his strategy and front run his trades into the ground. I donât know fundies name or details. Perhaps some of you do and can share?
