Keeping a Strategy Secret

[Tess 10]

:o you bored Arty?

 

don't let him entice you into dropping your discipline lote_tree.

not a good sign letting go of the discipline.

[lote_tree 10]

:o you bored Arty?

 

don't let him entice you into dropping your discipline lote_tree.

not a good sign letting go of the discipline.

 

No, no, don't worry Tess, there's no place for ad hominems here I think Arty is better than that. You wanna join the love boat Tess? It's good to let go now and again

 

:o

[Art Krantz 10]

In the meantime I'll take your money in the markets while your having a cold beer and watching sports all week because I work hard lol. Sorry, I know, bad joke.

 

Well my dollar bills are out there on the line along with most other folks earning their keep on a semi-regular basis if you’ve a mind to try snatch them, so knock yourself out.

 

If you’re smart enough you might sneak a small handful of them every now & again, but I can guarantee you’re gonna have to work smarter for longer than you’ve ever worked before if you want to make a habit of it

[Northern boy 10]

Art Krantz: If you join these chat sites for that reason then you're certainly in for a long, hard, painful slog.

 

You stroll into joints like this to shoot the breeze & poke s*** sticks at the vultures (vendors) son, not improve your trading.

 

You can do that all on your lonesome with a price action for dummies manual, a couple straight talking daily sheets to keep you abreast, a decent squawk facility & a good dollop of common sense.

 

A reasonable grasp of psychology wouldn’t go amiss neither, beings that’s what pitches the smart cats amongst the dumb pigeons most every day.

 

If you really want to improve your trading, or even obtain some (early & cost effective) feedback on whether you possess the muscle to cut it in this snake pit, you'll find yourself a fella who walks the walk & save yourself a whole sackful of misery & dough.

 

You can cram most of the useless crud out there into a nice neat package & stamp it ‘return to sender’ for all the good it’ll do you.

 

Lol... this one knows

[Northern boy 10]

alot of you guys keep telling me not to go prop... Unless you want to send me cash, a lawyer and a contract (that's an open invitation) to incorporate me.inc, I'm starting with this firm. the numbers are real. Other than that, I have to take my chances and put trust in this manager.

 

thanks for the opinions, lol the very few of them did help.

[lote_tree 10]

If you’re smart enough you might sneak a small handful of them every now & again, but I can guarantee you’re gonna have to work smarter for longer than you’ve ever worked before if you want to make a habit of it

 

There are obvious and glaring contradictions in your statement here, either that or naturally there has been a radical change from your earlier position on the matter. :missy:

 

However, what's important is that IF you're exceptionally good at what you do then it sounds like very good advice to everyone

[lote_tree 10]

alot of you guys keep telling me not to go prop... Unless you want to send me cash, a lawyer and a contract (that's an open invitation) to incorporate me.inc, I'm starting with this firm. the numbers are real. Other than that, I have to take my chances and put trust in this manager.

 

thanks for the opinions, lol the very few of them did help.

 

Have you exhausted every avenue to raise the capital yourself? I'm just going to take a stab in the dark but are you attending University? If you are then why don't you use your student loans or try to increase your overdraft limits. As a student they'll throw money at you if you have a good bank manager and a good excuse.

 

If you're not attending University then what about family or friends? Why don't you get somebody to be your guarantor when applying from a lending institution? Use the money to trade and pay the loans back in no time. Remember, based on the numbers in my earlier post you won't need much to start off, even £5,000 would do it.

 

Also, have you actually gone into a bank and explained your business plan, just to get some advice on what your options may be? They obviously won't touch you with a barge poll unless you have an extensive track record but you're there to pick their brains. Do you have a few bob to talk with a financial advisor in your area and explain your situation? If not, do you have family or friends who can access people like that?

 

If you truly believe in your heart of hearts and can look back at this time in the future, without any regrets (if you get done over by these people) about exhausting every possible avenue available to you to raise the capital, then and only then can you reluctantly call into a prop shop.

 

[BlowFish 10]

A couple of points. It's not the system that determines the success of the trader. You can give 10 traders a winning system half will blow up another 3 will die from slow bleed or scratch by be and a couple will make it. Thats why we are concerned for you Northern. That and the fact that I really think you might have made a mistake on your figures. You could get those sort of results with a fair amount of discretion but a mechanical approach basically not possible.

 

I have to side with Art about working smart rather than hard. Thing is it takes most people a lot of hard work to discover this. Some days I stay in bed and watch TV <blush> there I admitted it.

 

There are some great words of wisdom and some excellent contributions here at Traders Lab but one of the reasons I hang out is for camaraderie. Trading can be a solitary business. Actually that to me is one of the valid for going prop. Equity is not for reasons I outlined before. Art you trade with the London crowd don't you? Still waiting for my invite for beers

 

I am not sure that hanging out here will improve anyones business though there are some interesting ideas here for further research (one day). The other reason is I am interested in how others trade and trading in general. I have to be careful to separate trading the hobby and trading the business. It's a bit like the engine driver that goes train spotting at weekends.

[darthtrader2.0 10]

thanks for the opinions, lol the very few of them did help.

 

I'm not exactly sure what you expected people to post here to the original question. People have told you exactly what is going to happen. You go prop and your strategy will no longer be secret. I don't care what legal documents you sign. If you notice you don't read about hedge funds tied up in court all the time because hedge fund A hired away hedge fund B's hotshot and traded their ideas. Hell, I'm sure the main reason managed funds have thrived to such a degree is that things aren't bogged down by all the insane intellectual property laws.

If your strategy is X, once its no longer secret I'll go X - a tick..there now its my strategy and the legal document you signed isn't worth the paper its wrote on.

A system that produces numbers like that crushes every CTA in existence. Prop will get you up and running and some money in your pocket at the expensive of giving away 10s of millions of dollars down the line with your own CTA. Thats why people are saying not to go prop.

[Hlm 10]

Exactly darthtrader2.0...

 

Prop does have its advantages in certain situations. However, if you can make at "minimum 15% to 20%/month with basically no draw-down" AND you truly fear that there may be "some diluting effect", all those advantages go out the window. It's a cut throat business fueled by greed.

 

Like someone else already pointed out, if you do go Prop the best thing to do is to just confuse everyone around you. Add extra indicators and trades, and only discuss random generic market concepts. Once you tell someone the truth there is very little that can be done to keep it secret.

[OAC 10]

This is one of the most ridiculous thread I have ever read here at TL. Did any one of you got kicked out of other trading forums and landed here ? :ciao:

[Northern boy 10]

How do I know a broker wouldn't do the same thing? If they see my account growing roses how can I be so sure that every Chuck Larry and Moe isn't going to get a little bit curious when I call with a problem???

 

Darth: I said about 5 times, what I was originally looking for was legalities that could protect me at a prop shop. I assumed there weren't, but I was still hoping and had to ask.

 

 

 

OAC: delete it if you want

[Guest forsearch]

How do I know a broker wouldn't do the same thing? If they see my account growing roses how can I be so sure that every Chuck Larry and Moe isn't going to get a little bit curious when I call with a problem???

 

You've gotta be kidding, right? Like the broker has access to your screens, indicators, strategies and its triggers?

 

All they see is where you get in, at how much, and when you get out. Period.

 

Your P&L tells the rest of the story.

 

Now if it's Forex, they'll throw some stop spikes, requotes, and late fills at you just to keep you throttled down, but otherwise, the world's your oyster, mate!

 

-fs

 

P.S. If your strategy is really all that and the bees knees, why is it that you're not trading it on your own account with your own money (borrowed or otherwise, if need be) first again? This prop shop crutch of yours is a convenient escape hatch, it seems....

 

P.P.S. And when you get there - the prop shop - one word should suffice. Obfuscate.

[mister ed 10]

Some days I stay in bed and watch TV <blush> there I admitted it.

 

OK, got you figured out BF!

:haha:

[Northern boy 10]

You've gotta be kidding, right? Like the broker has access to your screens, indicators, strategies and its triggers?

 

All they see is where you get in, at how much, and when you get out. Period.

 

Your P&L tells the rest of the story.

trust me, that's already too much.

 

 

 

P.S. If your strategy is really all that and the bees knees, why is it that you're not trading it on your own account with your own money (borrowed or otherwise, if need be) first again? This prop shop crutch of yours is a convenient escape hatch, it seems....

what? i answered this... what the hell's your problem anyway??

 

 

P.P.S. And when you get there - the prop shop - one word should suffice. Obfuscate.

 

that's been suggested.

 

 

anyway i've reached a decision, as i said.

[mr_cassandra 10]

I'm new here but not new to trading. Just offering my two cents. I've been watching people on system boards for years and don't think any system or strategy will ever be so widely used that it invalidates itself.

 

People (in general) are so very prone to second guessing, expecting perfect trades, etc that it just won't happen.

 

regards, Steve

[vladv 10]

mr_cassandra you're right!So many traders using many many strategies out there......

[mr_cassandra 10]

not only that but I've seen all the following live and real with people following my work:

 

1. they disagree and sit out a long

2. they disagree and sit out a short

3. they try for a better entry and miss the trade

4. they see a quick profit and sell too early

5. they use short term ta on an intermediate term system

6. they use long term ta on a short term system

 

The list is virtually endless.

[aidaweb01 10]

I've jumped in and out of this thread so please forgive me if any of the below has already been beaten to death but....

 

Wasn't it Richard Dennis that proved you could GIVE a winning strategy away and people would trade it differently, some winning BIG and some losing BIG, but apparently all trading the same method.

 

Unless this strategy is Black-box you have absolutely nothing to worry about, human emotion will see to that.

 

Why not post your strategy here, let us all trade it, and see how many of us make 15% - kind of like a Turtle MKII experiment?

 

Can you imagine if we all did Happy days....

 

If you are still dead set on trying to protect it legally, then its all about the quality of your legal advice (remember some lawyer got OJ Simpson aquitted - anythings possible). I guess as a starter for 10 getting those you are disclosing your idea to, to sign an NDA might at least give some indication to them as to your seriousness?

 

Good luck.

[mr_cassandra 10]

Richard Dennis was totally right. I've particpated in mechanical system boards for years and can tell you for a fact that many people don't use the systems as instructed. below is a list of reasons that NO system or method will EVER be so widely used that it invalidates itself.

 

I read somewhere recently that any particular strategy will be skewed if it becomes popular enough and enough people start using it.

That is indeed a widespread belief or concept. It is one of many that are often repeated by the financial media, another one is 'you can't time the market'.

 

I think it does not take into account the huge effect human nature plays in its application. I've been developing a computer program that governs my trading since late 2000 and in discussions with other developers and users since then I have experienced many scenarios of human nature that would prevent any system or method from becoming so widespread that it would invalidate itself. Below is a list of factors of human nature that would be involved.

 

1. The myth that any system or method can catch every point of every move every time. If any system or method had even one loss or drawdown, this would cause X percent of followers to drop off in search of a better one. If this happened on their first trade X would become a larger percent. If there were two losers in a row, I?ve seen enough posts over the years to know there would be a large exodus.

2. Along the same theme, if the system buys or sells and misses any possible further gain, another X percent would become discouraged.

3. Along the way, you will also get people who 2nd guess the system, and thereby miss trades and get discouraged. This also involves media coverage making them discouraged or too optimistic versus what the program is telling them.

4. The 2nd guessing can also take the form of pure disagreement with the system, for instance if it said to buy at a major market low when things looked especially gloomy or vice versa during euphoria periods.

5. How much work will it take also eliminates anther X percent of possible system users. To illustrate this, here?s an example. Early versions of my program took me 5 minutes per day to update. I had several people ask me if there was any way to automate that so they wouldn?t have to spend 5 minutes per day. Think about it.

6. You would also loss another X percent of investors due to 'the grass is greener on the other side' syndrome, wherein they would drop off to chase a different system that looked better.

7. another X percent of people out there are religiously convinced it can't be done at all; to the extent they will steadfastly refuse to even look at trade receipts. Over the years I've seen about 75% of the people who respond just quote some sound bite they once heard saying 'you can't time the market' or must be curve-fit etc etc. When you press them for details, many times it turns out they have done little or no work on their own, just read an article once by a broker who said so. If I talk to 50 people, I get perhaps 5 like him that actually will do the diligence.

8. others feel that dollar cost averaging is the only way to go.

9. Others are all hung up on management fees to the extent that they will ignore a 20% fund with 2% fees in favor of a 14% fund with 1% fees, because a sound bite told them fees are everything.

10. others will get all hung up with macro bear or bull projections and miss all the intermediate moves a system could produce for them, sometimes ending up on the wrong side of an entire run.

11. It takes money to make money, so if it takes $5,000 to trade a given system, how many potential users did you just eliminate?

12. How many people will make some excuse to withdraw their money because they want a new sofa? (or fill in the blank)

 

I've seen variants of this idea saying that if any one indicator was all that useful, everyone would follow it and it would become useless. In particular I've seen this said about the vix. Yet, it is as useful to my program today as it has been at any other time since the first back-tested trade in 1996.

 

In part, I think that is because it measures fear levels translated into option premiums and as such is a guage of the crowd. As a mass effect, the crowd is highly consistent, decade over decade.

 

I've been at this since late 2000 to correct my own gross inability to be a trader by using my career abilities as a programmer and fascination with contrarian indicators into a program which removed 'me' from the picture.

 

In short, unless it delivers 10% per month to their account in a bank with zero risk, I say no system or indicator will ever become that widespread because people are people.

[cowpip 10]

Now if it's Forex, they'll throw some stop spikes, requotes, and late fills at you just to keep you throttled down, but otherwise, the world's your oyster, mate!

 

And even those won't seriously affect your trading if you're smart. Stop spikes are great for hitching rides. Misquotes happen, but I've never had a really bad misquote - nothing but a few pips above/below the normal bid/ask, and that was usually during fast price action. The worst misquotes will happen immediately around or after a news event, but if you trade that close to the news, you deserve a misquote.

 

You're bang on, forsearch.

[TWI 10]

If you have a strategy and lay it out in all its detail I can almost gaurantee that most people will be totally incapable of trading it. Particularly after the first loss. It is so psychologically hard to take other peoples draw downs.

[januson 10]

hmm, is 15-20% much to keep as a secret? On a good day I can make 25%, believe it or not The 25% is from leveraging a small amount of money and calculate the return percent out from that.

 

As I see it, the real deal comes into play when you think you can make 15% a month out of a billion -which is impossible singlehanded. Forget about the percent, they are relative. Instead, imho, it's much more interesting to talk about a monthly return of n-value! Keep a consistent n-value return each month without too much interference in the market will make you a happy man.

[waveslider 10]

To me it sounds like you can make 25% on a good day, or lose 25% on a bad day. That's volatile. Its not at all hard to do with a small account - with the e-mini 25% would be 20 pts in a day with minimal account.

 

When you start trading a big account, you will start dealing in percentage terms. And yes, percentage is relevant, because it demonstrates the amount of volatility in your account - no matter the size.

 

The ideal trading objective is to achieve maximum return with minimal volatility in the account.

[januson 10]

The ideal trading objective is to achieve maximum return with minimal volatility in the account.

 

Exactly, that's my point. So when speaking in percent return of investment, one should also pay attention to account size, sharpe ratio and maximum drawdown, they will all have a negative/ positive impact at the trader psychology! :missy:

 

IMHO: Besides that, any strategy should be tested and proved succesfully before entering any discussion about getting silly $5000 (excuse me threadstarter), which again is way to much to get started with a strategy that's expected to return 15% a month.