How to sell your strategy

Discussion in 'Strategy Building' started by QUANTUM_QUANT, Sep 14, 2007.

  1. After being a system developer for quite some time I have experienced the “HOW DO I SELL MY SYSTEM?” problem numerous times. The solution to this problem is not obvious and it is much more complex than the developing of the system it self.

    Description of the problem

    1. Inability to answer the question: “If your system works and it is that good why in the hell do you want to sell it? Why not to trade the system your self?” No answer to this question will be satisfactory to one who is asking this question. All the arguments that the system developer can come up with will only result in sarcastic remarks and the further isolation of the potential buyer.

    2. Disclosure of the principles that the system is based on leaves the developer completely unprotected and vulnerable regardless of any elaborated protective agreements that the developer might come up with.

    3. Non disclosure of the principles usually turns the buyer off because he/she would immediately suspect the fraud.

    4. Sending remote trades/signals (real time or look-ahead trading plans) even with the free trial or with the charges in the rears makes the buyer uncomfortable because if the losses occur the buyer has no repercussions against the seller of the system other then stopping the payments for the service and bad-mouthing the seller (which does not help much).

    5. No joining accounts, agreements, NDAs etc will ever work because neither buyer nor seller wants to be exposed to losses or law suits.

    Of course, there is a tremendous desire in the trading community to

    - develop the efficient and reliable systems
    - to purchase efficient and reliable systems

    Fortunately for both parties there is a simple and effective solution to this problem that eliminates the risk and anxiety on both sides!

    Here it is:

    1. The developer creates the system and protects it any way he likes.
    2. He determines the maximum drawdown the system should experience during its operation.
    3. After reaching the payment agreement with the client in case of successful operation of the system the developer deposits the amount of money that would be enough to cover the drawdown on the client’s account.
    4. If the system at any time produced the loss that is equal to the deposited amount the client has the right to stop the system operation and use the deposited amount to cover the losses.

    If the system works the way the developer thought it would then the operation continues. If the system fails the developer only loses the deposit (which could be as little as $250 or so).

    Let me know what you think of this approach. I certainly see my self entering in this kind of an arrangement.

  2. MGJ


  3. I am very sorry.
    I did not see my earlier thread appeared so I re posted it. Please disregard this thread. Something wrong with my computer.
    Sorry again.