How to prevent brokers from knowing your strategy?

That's apples and oranges.

I think what people who worry about this fundamentally miss is that brokers don't want the risk of trading. Even if I am trading alongside James Simon, as a broker I still run the risk of losing on that trade, whereas if all I do is collect the commission, I'm going to come out ahead regardless of how Simons' trade turns out.

Come on, this isn't rocket science.

 

This is another tactic...I have posted two tactics thus far and hope to be ontopic.

Trade with many different dealers to not become so large to them...(trade under the radar as to not lead their book).

ES

P.S. Do not discount the discussion around your specific request OP, as you need to understand the otherside of your trades. Again, technically it is impossible to hide your executions from the dealer and a good quant can reverse engineer much.

 

A third tactic it to set up stealth executions to trick the dealer into thinking where your stops and target are...You can hide the stops and TP's..or you can set out phoney ones to be modified later...

sorta like the DOM in equitiy trading and those games with the HFT's...

ES

 

the broker firm may have no interests. The individual employee must think differently.

 

archipelago started electronic clearing,it was sold to 4 or 5 major firms(i.e. GS),each acct(yours,mine,everyones, has its own I.D, #,,so it is very easy to track the whales and copycat their trades,if you boil water and add noodles it eventually will froth and boil over,you need to turn down the flame,when enough people are lopsided to the long or short side,these big houses with the data and the funds to move the market can turn it and force out the weak hands,this happens on a regular basis,it should be but is not illegal,or at least is intentionally ignored by prosecutors thru some loophole law passed by a paid off D.C....it 's not going to change anytime soon...learn to spot the turns

 

Short answer: You cannot.

 

So an individual employee will risk losing the job to reverse engineer your strategy?

How many of these cases have there been?

And, to go back to my first point, unless my strategy involves chasing a single tick, I don't see how it hurts me for others to be trading in my direction. For any given trade that is made, 99.9% of the volume that will happen between the instant that trade is made and when it is exited happens after the instant it is made. So, all of that volume, and the trader sentiment it represents, swamps anything that happens the instant you make your trade. Whether your trade turns out to be a winner or a loser depends on what happens after you make the trade, not what happens simultaneously.

Let's say you hold a trade for 10 minutes and your instrument trades 100K shares, lots, whatever over that 10 minutes. That means 10K units every 1 minute. You trade at 1 particular second within the 1 minute block your trade gets executed, which implies that there are ~167 (10K/60) units trading within that 1 second, some in your direction, some in the opposite direction.

So, you are saying that what ultimately happens to your 10 minute-long trade is dependent on what happens during the time .167% of the units are traded?

Again, come on, this isn't that complicated.

 

agree it is not that complicate. it is just logit that more people are using the same strategy, less money can be made for each user. otherwise, do you think every one would be billionaire if James Simons publish his secret and who would lose the money to him?

 

And when was the last time everyone in a specific field of human action decided to follow the same strategy? Never. Even if James Simons were to publish his secrets, other traders would take the basic ideas in a bunch of different directions, some good, some bad, and the market would still fluctuate.

I showed you how the numbers break down for even a 10-minute long trade and how the volume of those who are not following your strategy is 99% of the volume that happens during the duration of that trade. What is your response to that fact, rather than speaking in vague hypotheticals reflecting outcomes that have never occurred in human history?

 

randomize your stops target, entries.

Once your system gives you entry, use random generator to alter the entry point, time, etc, etc. as markets random most of time this may not nagatively affect performance. In the right spot it will enhance.

Then, let them try reverse engeneer