Thanks that's very good advice and I was thinking the same thing. What about working for a hedge fund and I slowly develop a system for them overtime using my own methods? Do you know how I would I be able to start working for one? I'll sell at least how much I can make trading in in 1 year is my criteria.
If it comes to the general public, you're not going to find someone willing to spend more than a few thousand bucks so you're going to have to do a lot of volume. And again, it's running a business if you want to sell this. You have to pay for a slot at Traders Expo and do a lot of promotion if you want to get the volume. As for selling to the pros, that's a lot of cold calling and networking. Realize that to sell this, it'll cost you time AND money. If you want to work for someone, they'll still be more impressed you actually got the system to print real money than if you just show a backtest. And then they'll also want to know: are you a one trick pony? Anyone can get lucky and put a system together that appears to work, but do they have the flexibility to do more to justify paying you? You're going to probably have to show good proficiency with math and coding if you want someone to pay you a salary. Be prepared to discuss probability and statistics and other such things during interviews, and an educational background in those areas (or coding) will go a long way. There is a lot of pedigree required to work in finance, either that or a significant track record that would most certainly have to extend beyond the "he got lucky once" argument.
You also need to be more awaken. I know for sure if your trading system is being sold by one person you will soon see that it will be resold on the black market for 3% to 5% of your original price. And they have no shame no resell your work from corrupt countries. So you cannot expect a growing business at all reselling your system to the retailers. And you do not sell anything without building a solid website and do some marketing which can be costly too. Second, if you get hired, first you need to have at least an outstanding masters degree in a hard subject or better you have a PhD kind in any relevant field, then you have the chance to work with somebody. But again if you do not constantly produce new ideas, you will be kicked out within 3 months and your system is sold for 3 months salary for that institution. And if you do not have a chance to land a job in the desired fund or institution but they show interest in your work, then you have to be very careful, as there are many shady people around who just want as much information about your work so that they can reengineer all and you are left with nothing. And you just see that within months your edge (if there was one) is gone because they closed it with their trading volume. Third, the best option would be selling your work to a professional. But this is really difficult. First if you ever make calls you soon have no chance anymore to get a job in any of that industry as the info is spreaded you are gonna sell something to professionals. So you have no chance anymore to get hired and you are self employed lifelong. Also second, you need definitely a live track record with some meaningful trading volume. If you cannot afford trading at least 1 or 10 lots on each trade for 1 year at a reputable broker you cannot sell it. Because those professionals are not stupid and 99% of them will say they can do it on your own and do not need any outside input. So you need some connections in that area otherwise they would not trust someone from the street. But if you are lucky you can get like $100k at best. But I would say this is more a dream because only large banks and institutions do have that kind of money for experiments available, if. And they do not decide alone, so there are some more people involved when selling to an institution. And they would also question if you traded your strategy 1 year life with meaningful size why you cannot scale up on your own, and why you are selling that info ?. So if your provided promise is a bit too good to be true, you cannot sell it too, as no one believes or trust you. My two cents on that third option. I only have relevant experience on the other two options I told you above. I never tried to sell something to institutions as you have no chance anymore to get hired and you are on your own lifelong. Do not forget that, especially if your own funds are not enough to live from it comfortably for many years. The first two options described, has been my experiences I made with the past 2 decades on my own. So this is not just an artificial idea but based on facts. So you see why it is not a good idea to sell any ready made system to anybody. The best way is to start small yourself and then scale up as quickly as you can while keeping the risk in control.
Totally agree here. The number one question any professional will ask is "Why don't you trade it yourself, based on your own numbers you should be able to make more off of it than I can pay you". And if your answer is "I don't have enough money to trade it" they'll smell desperation and low-ball you. Amateurs don't care, they buy into the BS that "I'm doing this to give back to the trading community and help out" that all trading vendors bait the desperate with. As for the people who make a living designing trading systems in house at a hedge fund, most of the time they're math/computer sci students from top tier schools who sign away all forms of NDAs and non-competes. The firms want to be able to control the process from the inside as much as possible and it's better for them to train and work these kids long hours than take someone from the outside - unless you have experience running money somewhere else. Getting back to the original problem, I for one can't understand: if you love markets so much that you developed a working system on your own time, I think the best reward is to trade it and reap the rewards. I really don't understand why you'd want to sell the system unless you're in a bad spot with money, and that's never a good position to begin negotiating from. I don't buy this whole 'I prefer to design the car, not drive it' mentality. Heck, I don't think I've ever heard of a car engineer who didn't like to drive what they've created. But I may be wrong.
You first said institution, and then you said just one person. Which one is it? Institution or one person? It's great that you developed your Holy Grail system. Now to sell it, you need a business plan. You need to figure out how to advertise it, market it (posting a thread on ET is not enough), be prepared to provide all of the proof or documentation of historical profitability and be ready to be able to demonstrate it live, draw up the sales contract preferably with a lawyer. Your Holy Grail system is intellectual property so you might want to again consult and lawyer, a patent lawyer and register a patent for it.
lol no, but you can attempt to establish provenance/a patent with an integrated circuit, a new battery chemistry, etc. A drug or drug delivery to patent something with orphan status. If someone steals your trading IP you're basically fucked. lol very little on ET worth stealing (systems).