Algorithmic Trading System Developer

Discussion in 'Trading' started by rmotta81, Apr 19, 2011.

  1. rmotta81


    After almost 3 years I've completed a fantastic futures trading system. My question is: how do I get to find investors or partners to trade this algorithm?

    I have every single type of out-of-sample walk forward data available with reports, graphs and etc to prove system feasibility.

    How do I do it?

  2. trade it yourself, make lots of money.
  3. 8,386,569 other people are trying to figure this out, too.

    the money is sitting on very few hands.
    go to monte carlo. live like a prince of persia, tell everybody at the bar or on yacht parties that you're making a killing $$$ with your trading system.

    don't forget to visit casinos where arab sheiks lose 0.5 mio dollars on a single night.

    nobody will ever want to know NOTHING about your trading system. nobody will have the slightest clue why it profits.

    all investors care about is whether you're successful, laid back, sharp, bright and cool. see bernie madoff.
  4. I had the same question a week ago. It took me a week and a few phone calls and my group got everything we need. If you have good names behind you it shouldn't be hard. If you are a 21 year old with a tradestation account you will have a very difficult time, impossible I would say.

    Are you willing to put some of your own money into the system?

    How much money do you realistically need?

    What technology do you require?

    You can go to a prop firm but then you are their slave. Most likely they will claim the model as their own and I have no doubt if the model is as good as you believe, if it resides on their servers, it will be stolen. If you can negotiate with a prop firm and keep the model then great. If you need a colo I would get all this on your own so the firm doesn't have access to the server just in case.

    Another problem is that because it's an unproven system the clearing firms will try and not offer you exchange margins, they have really cut back so you will have to negotiate with them. Some of the requirements were comical.

    If you can build a track record you are all set but be careful, try to look for indy money first.

    Just my .02.

  5. It took you 3 years? Gee, where have you been my friend? I have software here that will generate 10 full systems in 1 hour that will blow your mind with no opimization no curve-fitting, fully tested out of sample:

    Every second that goes by another fantastic system is born and every secod that goes by another fund manager wannabe blows his capital from poor risk and money management skils and bad attitude.

    Take my advice because I am in this s*&t for a long time: serious investors look for many many more things than just systems. Of course, a solid track record for the past five years with an account of at least than 500k is required. If you go institutional, a solid track record with more than 50 million under management.

    Good luck to you.
  6. intradaybill,

    please tell us how much $ do you manage? having 1,000s of out-of-sample proved systems.

    you're selling your pattern generating software over the internet.
    thats very different from managing a fund...

    do you have requests from hedge funds? is there even one >0.5M investor who considers trading your methods?

    the ONLY way to millions in this business is this...

    set up your OWN regulated fund. build a track record. with good connections to the right people, money will flow.

    you say that institutions pay attention to the internal design of systems and to the skills of the developer himself?
    They have no idea about such things. Nada.
    They could hire you because you **seem** to be reasonable or due to your univ. degree.

    Good luck OP. remember, there is 10000x more systems out there than people interested in trading them. In general, (99.5%) people prefer to trade totally shitty methods.
  7. i wrote the message not bold enough.

    even with 5 year track record, $5 mio AUM... sharpe ratios of 3.5 , rock solid strategies, etc.
    99 out of 100 contacted people will NEVER want to join.

    think about it- 99% of traders lose terribly. Many of them destroy their accounts several times. most people will trade every INSANE, stupid, super-risky, garbage method under the sun.
    its in human very nature - to be miserable , struggling, etc.

    almost all people choose fake, expensive, run by scam artists:

    - "spirituality" (the priests love your children, yeah)
    - "medicine" - big pharma pills and toxic treatments
    - investments

    if you'll find ONE investor who is sane, logical, without excessive ego and who does not cheat or steal - my god, its like a black swan
  8. I've heard of people disappearing after they have shown such a system to the wrong people.

    Better to burn it .
  9. Kpatel83


    i have spent also about a year working on a algo based gray box application that is showing significant upside. When this application finally shows profitability I will work out a profit split with the trading company I am with. I would not want an "angel investor" as your then obligated!
  10. Your statements are highly questionable. I've also written and operated software that can generate 10 to 100 great looking strategies per hour per CPU node. Such claims by themselves are meaningless.

    What is the mean cross correlation of PnL between these strategies on hourly, daily and monthly time scales? What is the correlation coefficient matrix rank? What is your group autocorrelation of PnL between your in-set and your blind out-of-set periods?

    There are four possibilities here:

    1) Your cross correlation on a relevant time scale is high, indicating that you are generating close variants of the same strategy. Keep in mind you can have a very low hourly or daily cross correlation, then see that correlation blow up on a monthly time scale. Most likely your strategies are highly related. They will profit together and fail together. In-set/out-set autocorrelation tests are unreliable.

    2) Your cross correlations are truly low on an appropriate time scale (there is diversity) but your in-set -> blind out-set autocorrelations are low. That means you've curve fit or over optimized.

    3) Size capacity is very low. Or risk or drawdowns are too high and therefore limit size or leverage.

    4) Or you have done what is extremely difficult and are well on your way to making 100s of millions. You also won't need investors. If you truly can generate so many viable strategies with low cross correlation you'll have a very high Sharpe ratio and no drawdowns for the portfolio. Just increase your leverage and you're done.

    EDIT: The cross correlation test is actually more sophisticated than just mean cross correlation. One must determine the rank and decompose the correlation coefficient matrix. Only then can you measure true diversity of a population of strategies.
    #10     May 7, 2011