WTF are you posting on a thread about outside funding if you don't have any interest in outside funding? What exactly are you trying to accomplish, what would "provide value" to you?
Fully mechanical trading system that makes money month after month is rare. It is even more rare for Joe Sixpack like me to come up with it.Since it took me nearly 10 years to find it and a lot of effort i will be very careful how i go about it. This whole trading thing is really survivor of the fittest and those in possession of fully mechanical strategy will not go to fundseeder and expose their strength.
Saw them recently, and was looking into them. Not for myself. I already trade OPM. But I saw Jack Schwager was involved, and I like to keep up on folks in the industry ... what's going on. And I sort of started digging down the rabbit-hole, and saw some posts here (believe it or not, from a Google Search) But I gotta say, some of the above comments, sorta crack me up. The paranoia, without understanding how the industry works, is detrimental to some of you folks getting anywhere. Honestly, in the interests of helping some of you understand how the business works, which might help you in the future? I figure I would clear a few things up. Why would Fund Seeder do this? Read their pitch. They are basically a type of IB (Introducing Broker) firm. And the IB Business? Is nearly risk-less when it comes to market exposure. THAT is why some go the IB route. Jack Schwager himself states that he is NOT to be considered a professional trader, as he understands it's not in his wheel-house of talents (have to respect him for being able to say that, when so many perpetual losers just can't admit that) Regardless, yeah ... they look like a type of IB business. Just fee harvesting for the ability to introduce business. THAT'S why they do it. They come out and say so. They dont need to trade well or have open market risk. They don't need to clear trades, and have exposure to thousands of positions. They just get a fee, for "Introducing Business". By the way, if some of you, or many of you discover you can't trade? The IB business is not a bad business to be in, for the above reasons. Folks get into the IB business, because they can pick up a fee, and can sleep at night, NEVER HAVING TO WORRY ABOUT AN OPEN POSITION at all. That is a very attractive model, for those that don't have the "risk / trader / investor" mindset. Can't really fault people that go that way. As far as "stealing my strategy". Honestly, that one made me sort of chuckle. If you've got some "back-tested system" that you think is the bee's knees because it's "back-tested" with IN sample data for 5 years? I'm telling you having done work in Quantitative Strategy Architecture. No one wants it. Well, let me be a little more clear. No one with a brain in their head wants it. Unless you have at least 12 years of In-Sample, and 3 years of the same process OUT of Sample? We don't want it. Heck, I've had kids try to pitch to ME, some supposed strategy, and they have some broker statements for 6 months, and they "backtested" it for 5 years (5 years? What's the point?). And the only thing I am thinking? Is ... "How can I politely tell this kid to lose my phone number?" We don't want your strategy, because we don't believe in processes with that little data. But what if you have tested it through 11 years of in sample data, and have 2 years of out-of-sample data? Most firms STILL don't care about your strategy. Heck, I run 16% annualized, with a Max DD of around 2.7% ... and I could care less who sees my trades as I execute them. You MAY NOT see the program I have, that spits numbers out at me. It's not at my broker, and it MOST CERTAINLY is not some silly chart setup. Why? First of all, because many Firms, FoF's, heck, even savvy Individual Investors ... now, are about layering strategies for the benefit of non-correlation. They just need to know enough about what you're doing, so that they don't put you in a pile of cash, next to a guy that is doing the same thing, and double their risk through too tight a correlation of strategies. THEY DONT CARE ABOUT YOUR PRECIOUS STRATEGY; they want different traders running different strategies. The enemy, is having similar traders running similar strategies. The reason is obvious. DD periods will become more pronounced. They want myriads of strategies, all doing different things. Then, there open market risk is very low, and they don't have to worry about 6 sigma moves (or worry as much) as the rest of the nit-wit single-market single-direction traders out there do. May 6, 2010 happens? Meh, so what. We have 5 traders, and one was trading long equities, one is in the Ags and had a so-so month, one killed it and has had a stellar month being long a bond spread, one is short Equities, and one trades currencies. That is a simplified version, of non-correlation. By the way? That principle is what most of the top-performing firms out there do. If you do that? You don't NEED to copy someone elses strategy, because you just _ _ dont _ _ care. And not caring due to non-correlation? Is a good way, to make a lot of money, and sleep very very well at night. Secondly? ROFLOL ... Let them try to copy it or ... what did someone say? "Reverse Engineer it"? Even if they cared enough to do that? Well ... LOL ... Good luck. 95% of Wildly Profitable Traders out there trade Grey Box programs (I do). Please. TRY to reverse engineer what I'm doing. The Grey box is mine, and locked away ... and I just execute it. Intelligent seeders / Investors / Firms / FoF's know that if you have a brain in your head ... you've protected it with some rather simplistic Grey Box methods to keep that process secure, and it'd be pointless for them to try anyways. I'd refer to it as systemic-discretionary. The metrics may change once a year. They may not change the way I trade at all for two years. They may change the way I trade 3 times a year ... and if you miss ONE of those switches? You'll go from having a 5% year in 2008, to a negative -25% year. That's why we run Grey Box in the first place. And smart Investors, know this. They know they can't reverse engineer a fantastic strategy, for a number of reasons. First of all, they may watch it for 8 months, and know they don't have all the pieces, because 4 pieces of the strategy may not have signaled. So it's too detailed, and if they get ONE of those details wrong? They lose money. A lot of money. They're not stupid, and they know that. Well, the smart firms and Institutional Investors. Only an idiot would try to copy a successful PM's strategies. Which brings me to another point ... There is another reason why Firms would want to talk to someone, and then lose interest? They find out the trader is trading a SINGLE strategy. So some guy comes to them. They have ... let's say ... 6 years of in-sample, live trading the process, great metrics? Wow. Sounds interesting. Then they find out the trader is a SINGLE strat trader, his intra-month numbers are HORRIBLE, and his top line numbers LOOK good, because the E-Ratio ONLY shows up by looking at his process performance over a long period of time. And then the worry is that he or she has accidentally benefited from a positive Noise Ratio. Again, there's no real secret here folks. And no one is out to "get" your strategy. I don't use them? But there are a million firms out there (Well, not a million, but there are a LOT in the Introducing Broker business, or a TYPE of Introducing Broker) doing things very similar to this ... and trust me ... they just don't give a rats behind about your precious strategy.