How to sell a profitable trading strategy?

Discussion in 'Options' started by Aquarians, Aug 11, 2019.

  1. Aquarians

    Aquarians

    It looks like research is eventually giving results (after 14 years it would be about time) and backtests show a yield of 30-40% per year with a Sharpe of over 2. Good enough to deploy it on my own money, but I've too little of those money to be worth keeping this just for myself.

    I know the "regular" path for retail (a.k.a "dumb") traders is to run the strategy on their money for a while then show "track record" and hope someone buys that. But there's also the quants working as researcher in hedge funds and once they find such a strategy, they don't have to run it for 10 years on their own savings to convince the fund to deploy it on it's capital. It's their job to do that, if the strategy withholds theoretical peer review and passes staging (virtual paper) tests, it's getting promoted to production.

    I've never worked in such an alpha research position, partly because getting one is about as straightforward as winning the lottery and partly because in my location (Romania) the only work avaible is of the low level code monkey type. And when you got that, the whole ecosystem (local peers, local managers, remote managers, remote CEOs) is structured around never acknowledging that monkeys can think (me doing research as a side project), let alone talk (bring it out in the open). It's like Sarah suddenly starting to say, right before she passes away since she's nothing to lose anyways, "fuck you yew piece of shits, you could have been rich if only the thought that my opinion matters would have gone through your tiny heads" ( https://www.nytimes.com/2019/08/09/opinion/chimpanzee-sarah.html )

    So anywayz, I have to re-run the tests on a broader scope but this time I'm 99.9% confident it's the real thing. I've been 98% confident previously and it was faulty data, since then I've thought of a curated data feed as a possible side business to my side business but that's small change anyways (although I've listed the subscription price at $12,000 / year). Now it's most likely not the data, or if it is then I'm raising my curation price to $120,000 :)

    So how to proceed from now? :)
     
  2. tomorton

    tomorton

    You've spent 14 years on this project and you say you don't know what to do next. I could not under any circumstances put any faith in anything you say.

    But if you find that psychiatric help is a little expensive, I might be tempted to help out.
     
  3. Aquarians

    Aquarians

    Preferred path is through networking. I'm starting to work with a former big-finance trader who's friends with a guy whose father in law is a high network individual (some $100MM net worth). I know the latter is willing to put up $1MM-$5MM of seed capital into a hedge fund business (he's already got about half of his money in stocks anyways). As long as what I have is legit, I think I have a good chance on getting that seed capital.

    My problem now is not that my research results are not up to the challenge, as far as I see it they are up to much more that millions, probably could handle billions without anyone much noticing. My real problem is security, how to handle research results with enough discretion that they keep working ... indefinitely?
     
  4. So at 98% it didn't work but now at 99.9% it does ?
     
  5. TommyR

    TommyR

    taking someone elses money is a very costly mistake.
     
  6. TommyR

    TommyR

    you should think about how to hire people to do useful code without ever knowing whats going on or seeing important bits. if its good. if its not then dont.
     
  7. ffs1001

    ffs1001

    As my post count shows, I am relatively new to Elitetrade, but I am not new to trading - been doing it for a couple of decades. I do it for a living with my own money. I came to this site as a means to learn from others (and share some of my own knowledge), and I'm trying to stay professional but a couple of threads have made me question the seriousness of some of the posters:

    1) A guy who has a winning system capable of making him 30-40% a year and yet he has not used his own money to benefit from it, but instead is looking for someone to give him millions for the "system".
    2) A guy who claims to have made 8000% profit in a week.
    https://www.elitetrader.com/et/threads/up-8-000-for-the-week.334957/

    I have no idea what to make it all frankly.
     
    tomorton, ironchef, Metamega and 2 others like this.
  8. TommyR

    TommyR

    you want a switch guy who doesnt know anything outside of that but is the best at switches. so its very specific.
     
  9. TommyR

    TommyR

    if you want millions you should build an app for connecting buyers and sellers of second hand event tickets.
     
  10. Aquarians

    Aquarians

    Have you read the part about taking me 14 years to get here? I'm 41 now so that's on top of 27 previous years, some of them spent in almost abject poverty after hyperinflation hit us, others in the turbulent years that preceded that hyperinflation when we got rid of communism and enough of them in that very communist system that wasn't that bad to start with all along on a side note, btw.

    Do you know how 41 years of this cost? How much 41 years of YOUR system cost? When you're struggling to stay alive at $100k / year you don't have much time for side businesses, accumulation of capital or what else. After 41 years in this crap (on top of millennia of similar carp, sorry crap), I got less than $100k of savings. My net worth just to have survived these years at a very decent $100k per year is $4,100,000. That $5MM seed investment from the Dutch nicely covers it. That's all.
     
    #10     Aug 11, 2019