I have developed a trading system which produces pretty good results. I would like to sell it to people and take a cut of their profits. But I am still in early stages of this thought. I am wondering how to promote it. But I am also wondering about what laws I need to abide by. I have posted two items on Craigslist (links below). Please review and comment. Please be frank (I know, I know, I don't need to say that.) http://sfbay.craigslist.org/pen/bfs/701048925.html http://sfbay.craigslist.org/forums/?act=Q&ID=92504571
So did you back test this on paper with no real market results? Not insulting just asking? Since you said you didnt have any money?
Asking for a 50% cut is very unrealistic, since the trader puts up all the money and takes all the risk. Seasoned hedge fund managers with lengthy proven track records only take a 2 and 20 cut (and their investors don't have to manually enter every single trade for themselves). Do you really think anyone sane would pay you more than double that amount? 10% would be a more reasonable cut, and you'd be very lucky to get that, since your system is 100% unproven and you haven't provided any way for the trader to check your credibility. They'd all assume you're probably curve-fitting a system that just works on paper- without even understanding what "curve-fitting" means... which is almost always the case in situations like yours. As for the legal side, I wouldn't worry. A) You won't get any clients anyways. B) You have no civil-suit liability, because there's nothing for them to take. C) The gov't would have no interest in filing charges against you. As long as you're not committing the heinous crime of *gasp* helping people get high, the gov't really doesn't care. Frank enough?
What is a "heavy?" Write code to backtest your system for a few years. Then trade it yourself for a few years. Profit. Then you'll be able to sell it.
If you don't have $25k to trade it yourself, why not apply the same strategy to futures or forex, neither of which require a minimum dollar amount or have a wash sale rule.
You seem pretty genuine unlike most of the other system sellers around here, so I won't call you an outright fraud right off the bat. Why don't you post a week's worth of trades on elite trader so we can see a forward test of the strategy? In order to have any shot at selling a system, you need to indicate what the training set was, how the algorithm fared against the held out data, and a number of different metrics for both sets of data. (If you've got a system you designed against the first 3 weeks and May and it did well in the 4th week you've got nothing regardless of how good the numbers are.) If you can do this and you haven't shot a major hole in your system it's worth far more than 25k. If you can't it's worth 0. If you still decide to try and sell the system (even if it works) everyone will assume you curve fit because no one sells a working system. The problem ultimately boils down to the fact that the system designer can't prove to anyone that the system is worth anything without essentially giving it away. There are a handful of dopes who will buy a system without doing their due diligence, but there's not nearly as much money in that racket is there is in running a functional trading system.
open up a trading room, make people pay a fee for room access and the indicator/method package, teach them how to trade it in the room everyday. 200-300 per person per month is a good start.
Why donot charge a fee for this system and be done with that like other1000 systems out there. No one will share 50% profits from their capital.