is it justified for me to concern about broker reverse engineering my strategy?

Discussion in 'Automated Trading' started by trend2009, Jun 30, 2020.

  1. I developed a very simple strategy working on thin market, this strategy has been put in live trading on March. in 3.5 months, the return is 130% after around 10000 trades. the strategy is very simple. if the IT engineer in the broker spent 3 hours looking into my trading, he would figure out how I did it. if he competes with me, the strategy will cut profit at least in half.

    below is the equity curve of the strategy.
    murray t turtle and speedo like this.
  2. Not going to happen if you're using a reputable broker. There are many threads on this.
  3. d08


    Of course they would. Nowadays many outsource the support. Once you contact with an issue, he'll go through all your trades and will figure it out. I'm sure it happens all the time but good luck proving anything.
    yc47ib and henry76 like this.
  4. traider


    combine it with some discretionary trading or other strategies. that will obfuscate the pnl.
    dennis86 likes this.
  5. virtusa


    You need 10,000 trades to make only 130%???? That's 0.013% per trade average.
    I am sure it is a very very simple system. Don't be afraid nobody will try to hack your "system" as it is not worth it.

    10,000 trades in 3.5 months means average about 150 trade per day. Do you have 150 signals a day?
  6. I still say it will not happen at a reputable broker and won't even be noticed unless you're swinging millions.
  7. virtusa


    There is no room for that. His average profit per trade is much too small for that.
  8. traider


    how did u see the avg profit per trade?
  9. xandman


    Avg profit alone is myopic. Look at his equity curve. It shows a superb risk-return.

    Just as saying 3.5 months is too short, we need to also look at the frequency to see if there is enough data to be statistically relevant.

    HFT is a prime example.
    dennis86, henry76 and d08 like this.
  10. virtusa


    130% in 10,000 trades. 130/10000=0.013% average.
    If his returns are compounded it is even much less.
    #10     Jun 30, 2020