How to protect strategy from theft by а trader

Discussion in 'Professional Trading' started by 0878337, May 6, 2015.

  1. Pekelo

    Pekelo

    The bottom line and short answer is, you can't really. Unless you are using family members or extra loyal friends, the chance that the trader takes it to somewhere else and trade your strategy there will always exist.

    The reverse strategy as was advised above also doesn't work, because as long as a system is consistent (loser or winner) it can be used as a winning system.

    Look at it this way: As long as your system isn't affected by more people using it, like liquidity issues, others using it might actually strengthen the system. You bought long? Well, so did others thus pushing the price in the wanted direction.

    So I would say, don't worry about it, unless it is such a fragile system that competition would kill it, but then you might need a better system...
     
    #11     May 7, 2015
  2. Sig

    Sig

    Then thank you for pointing out the obvious, yes brokers have computers and its technically possible to scan for accounts that consistently win. We're in violent agreement on this point. Pretty sure I didn't ever disagree with that fact, I actually said "they're not going to go find your account and try to reverse engineer your strategy, mostly because you're just not as important as you think you are."
     
    #12     May 7, 2015
  3. Sounds like you're a PM at a fund/part of a fund. Outside of hiring people you trust and/or stringent non-competes the only real way is to trade it yourself. Or you go automated.
    What you might think of as theft is what the execution trader would call 'learning experience'. Every strategy on wall street diffuses out eventually.
     
    #13     May 7, 2015
    Occam likes this.