Hey Guys, i am a bit lost how to start this, ANY input is appreciated. i have a business idea which evolves around a clientele which most of the time has several 10ks lying around dormant. this is money which is not needed immediately but should be possible to be accessed within one week or so. i know this clientele and have access to some people. the idea is to offer a trading service for them, which must meet a very specific setup - client must keep money on his own trading account - trading algorithm will trade on this account the sums of each individual aren't that big, but it is a bigger group of people with easy marketing (sales is different oc). so what i am basically looking for now is a business partner who can bring in the trading know how. i know there are "mirror" brokers out there, but this obv doesn't help me to much. algorithm must be - scalable to a certain extend (So no small cap stocks or similar) - able to provide a setup so accounts can be traded without revealing the algo - i prefer a high % of winners with low R-R - the trading algorithm will stay your asset, you do not need to reveal it in all details (ovv everyone should understand it). i am helpful for any input, i have done business with this target group already. regards
That's an oxymoron of sorts. Systems with High% winners usually have a small average winning trade amount and huge average losing trade amount. These systems usually have wide stop losses as well, and thus, don't really have a good R-R. Be careful of what you wish for in a system.
There are systems which trade infrequently, only trade high probability, have a high win rate, low draw downs. Intraday trading however does not have, that I'm aware of, characteristics of low R-R. To the OP, who trades the Algo? Does the Trader who owns the Algo trade it or otherwise please explain how this works. Thx.
thanks to both of you for the explanation. i thought having a high Win% and low R-R made low drawdown and a more continues equity curve, but i can be corrected. regarding who trades the algo) i think i don't really understand the question, when its an automated trading system i assume the computer trades it, no? but this is the plan, yes. the trader takes care of trading, (or more general the profitability of the accounts) i will take care of sales/marketing/administrative stuff. by taking care of trading it can also mean only setting up the algorithm on a machine. the trader will still have full ownership of the algo and it wont be disclosed (black box for the clients). it needs to be seen, but i can also image having 2 algorithms trading on the same accounts if it improves performance/reduces risks (but that is an advanced stage)
Yes, high win rate + low R-R = smother equity curve = the holy grail. Who's computer will the Algo reside on? My one algo can be traded 4 x ways. Long and/or short and different time frames. I'm sort of interested in your idea as I have a Auto system and may be interested in leasing it out for some type of commission. It trades Index futures.
I do what you want to do but it is manual. I do have the algo's etc defined. Right now my head manages it. Accounts are hooked into a master account I operate. They do what the master account does. A POA is involved to be able to do the link. The broker has blank POA's. I do not deal with DD or RR. Not part of trading plan or strategy; not needed. The trading is all transparent aand could be reverse engineered except for one thing. Lack of talent. (always the case) People take out or put in money since it is their account(s). I ask them to not trade. My part is just a personal courtesy. I satisfy their needs. I need them to solve local problems which they have defined. My plan is to finish the detailed automation so all I do is watch it. Now, I have coding helpers who do their own accounts. We use GTM for watching and setting codes in place. We take the full offer of the market. Long ago I used to do profit sharing in accounts of others; but I just surprised them and never asked them to send me any money. They gave it to others to solve local problems. Two things: The SEC is difficult to work with when your profile, according to them, is "insider trader". The surveilance trigger is multiple accounts. Then the money velocity kicks in. after that the "unbelievable kicks in. The SEC employees cannot learn. This deficiency has a trail that begins with SEC lawyers. I hope a movie comedy is made someday. The IRS always thinks you are geting money from somewhere and they do some sort of looking at papers. Usually they assign you an organizational name in the "organization" or one of the organizations.. And, of course, someone else is really you. It is hard to find ot their mistakes. Always have two or more IRS folks in the meetings or conference calls and make them transcribe it afterwards. Make them send the typed copy to you. Three full days is about 800 double spaced pages.
i cant give you that answer currently. the setup of this whole "construct" can be 2ways 1) money of clients is transferred to one trading account (must be a separate account with no access to it to withdraw), so this solution must have a built in security barrier which protect the client accounts from "fraud" 2) money of clients is on theyr OWN trading accounts (so we will have like x accounts) and each account is traded either by one instance of the same program, or if the program is capable of sending order to several accounts simultaneously, then by one program the trading program itself should be run in a data center, restricted to access to the server only by the trader. (i dont need access) in case of 2, we will just have several servers who run the program. i hope i understood your question correctly
Presently my system is designed to trade and trades with Interactive Brokers. I don't think IB allows one signal to numerous trading accounts. You may need 1-4 trading accounts and each investor owns a % stake. The 4 accounts would have slight variations of the algo eg, 4 algos running different time frames. Running for example 50 algos to 50 accounts would be not a good idea me thinks.
i prefer systems with 95%+ winning trades. must be scalable to 35 million and don't produce losing days. monthly returns at least 20% compensation: $9.95 per week per client, if profitable. after 6 months of free trial period. only serious offers please!