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

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

  1. zdreg

    zdreg

    Nobody cares, period. That includes brokers who churn and burn their customers.
     
    Last edited: Jun 30, 2020
    #11     Jun 30, 2020
  2. zdreg

    zdreg

    If you have concerns, realistic or otherwise, switch brokers every few months
     
    Last edited: Jun 30, 2020
    #12     Jun 30, 2020
    eastern_warrior likes this.
  3. guru

    guru

    Brokers have employees who could be curious and generally lack integrity. But first they’d need to be alerted and have a reason to look at your account. So simply don’t contact them with any questions.
    On another hand, many people make lots of money, just not with such smooth P&L, so a dishonest broker/employee would be too busy looking at other accounts first and not seeing any way to replicate their results, thus learning that it’s a waste of time looking at anyone’s trades. This obfuscates your results too, and generally makes it pointless for them to simply scan all the accounts for high profitability.
     
    #13     Jun 30, 2020
    trend2009 likes this.
  4. d08

    d08

    I don't care if I make 130% with 100 trades or 10,000 trades, irrelevant mostly. It's the risk profile that matters and he has an awesome one. @trend2009 might be a trading savant from what I've seen.
     
    #14     Jun 30, 2020
    blazespinnaker likes this.
  5. virtusa

    virtusa

    You should care because of the fact that the expectancy is very important.
    His average profit per trade in 100 trades is 100 times bigger than in 10,000 trades. So what you say is wrong.

    If his profit is average over 10,000 trades 0.013%, it means that his profit at a 50% winning rate should be 0.026% if he would put a stop at 0.013%.
    50% winning at 0.026% and losing 50% at 0.013% gives 0.013% expectancy without taking in consideration the commissions.

    Trading the ES 0.013% equals about 0.39 points or 2 ticks. If he would put a stop at 2 ticks he will get stopped out most of the time in seconds.

    If he would make his return in 100 trades things would look much better. Trading the ES 1.3% equals about 39 points or 156 ticks. If he would put a stop at 156 ticks he will probably never be stopped out.It would change/improve his risk profile massively.
     
    Last edited: Jun 30, 2020
    #15     Jun 30, 2020
  6. traider

    traider

    How much rebate are you getting? What is your commissions for trading 100 shares?
     
    #16     Jun 30, 2020
  7. Absolutely they will! Both consciously and unconsciously via risk management systems.

    Obfuscate your trades, dude! Open an account on another broker and hedge it. I would even go as far as making similar looking trades.

    Congrats on your system. Be careful though, the market has been a different beast lately and it may change again.
     
    Last edited: Jun 30, 2020
    #17     Jun 30, 2020
  8. Simple strategies do not work. The key word here is: March.

    For strategies that do work, reverse engineering is not possible.
     
    #18     Jun 30, 2020
  9. traider

    traider

    his equity curve is still going up like a straight line in June
     
    #19     Jun 30, 2020
  10. (sigh)

    I don't quite understand the motivation behind posts like this.

    Some guy crashed the entire global markets with a very "simple" strategy and I can't imagine that reverse engineering it was very difficult once they narrowed it down to that one trader.

    If what you're trying to say is that long term strategies that work for significant periods of time are often more complex in nature, than yes, I suppose that is reasonable. However, with most automated systems that are not subjective, there are strong hints from the trading history that scream "look over here" and any reasonably educated and talented quant can probably locate the alpha.

    There are exceptions of course, but it isn't really a factor of the complexity of the system, but rather of the trading pattern and signals used.
     
    Last edited: Jun 30, 2020
    #20     Jun 30, 2020
    trend2009 likes this.