Dear @Maverick74 Please read ... Appreciate Your Thoughts Below is an explanation of the Funding I am seeking. I made it safe simple and very profitable for all. Prop Shops are not interested even though P/L split was never discussed. ************************************************************************************ Dear X We have created a Black Box Trading System which was tested and retested over several hundred live trades. Documented annualized return on equity is over 120%.We are ready to roll it out quickly but systematically. We trade long and short quality corporate stocks. Our win/loss ratio is about 50/50. The system achieves this using 4 to 1 leverage provided by Interactive Brokers (IB). Equally important due to our risk management rules our stop loss per trade is about ½ of 1% of equity. Risk as measured by monthly P/L and the maximum drawdown is exceptionally low and all trades are closed at the end of each day to further reduce risk. To demonstrate our confidence in our trading system we will absorb all net losses. We are interested in funding $200,000 now and increasing to $1+million within six months based on our proven results. At the start our Account will be $50000 to meet our responsibilities if needed. Please note a second Black Box trading system with similar returns but requiring more capital is in final testing. Existing clients will be first to be invited to participate in that funding. TKs RC
I think you can find someone interested. Over what time period are those trades tested? I know 120 live trades sounds like a lot but it's really the time period that is more important. For example, you can test your strategy out on 10,000 trades with great results over a given 3 month time period and then the next 3 month time period suffer huge losses. You need to prove your system is robust over time not over number of trades. Number of trades is very misleading. Having said that, I'm sure you will find a firm. Unfortunately the equity space is very capital intensive and the number of firms are down to a few. I would look more towards a private investor maybe.
Thank you very much... the 120 was 120% annualized ROE... the trades were 105 trades over 3.5 months. The low risk and my taking the losses puzzles me. What do they have to lose? Any ideas where to find private investors. I'm confident and will be sure everyone does very well P/L split...Lehman formula .... No risk to them. Appreciate your input.
I think you will need more then 3 months. I would shoot for 3 years of historical data (backtested) against a random data set using a monte carlo type approach. Normalize your returns by risk and compare to the random portfolio.
Thank you but I've already traded hundreds of live trades in development. This deal is extremely compelling and safe so I'll just go for a private investor per your suggestion and pay them 20% first before I get paid.I take losses and IB has accounts to safeguard the investor/client money and keep it liquid.Thank you for your advice it was very helpful.
Yeah just for your own personal education, it's not the number of live trades that matter. Let me give you an extreme example. Say I have a system that only buy stocks and it buys them on the open and sells them on the close. Say in year X the market was down every single day that year except one day (day46). On that day the market was up huge and every stock in my sample data set was up huge that day. I could theoretically run a test with 5k simulated trades in which ALL of them made money. I go to an investor and tell him how wonderful my system is that despite the fact that the market was down every single day but one, my system was up 100% and all it does is go long. Very impressive indeed. The 5k trade sample here is useless. For if we ran the test on ALL 252 trading days my system would have gotten killed. The issue here is a 3 month sample is statistically meaningless regardless of how many trades you executed. It's curve fitted to a very specific environment. And you really should understand that.
I'm sure you are correct... but Equally important due to our risk management rules our stop loss per trade is about ½ of 1% of equity. Risk as measured by monthly P/L and the maximum draw down is exceptionally low and all trades are closed at the end of each day to further reduce risk. To demonstrate our confidence in our trading system we will absorb all net losses. No risk to the investor ...if they don't like it they walk. If I'm right they get 20% liquid and risk free. BTW the trades were all the same rules everyday long and short between Jul15 and Oct 30 2015...not the greatest market and the development trial and error live trades were the previous six months... Any thoughts on searching for private investors would be great.Thanks again for your help.