Protecting successful trading strategy

Discussion in 'Automated Trading' started by bbk, Nov 28, 2008.

  1. bbk


    I am curious about how people protect their profitable trading strategy when they have an account with broker like IB, thinkorswim. The brokers can easily monitor the accounts with very good and consistent performance and then look at their trading records. They can easily figure out the secret. Is there rule protecting our trading secrets from being stolen by our brokers?
  2. Yes, open two accounts with two different brokers. Say you want to buy 10K Qs, buy 20K in one account and sell 10K in another and do it with a fast algo. Do that by randomly chosing between the two brokers for every trade and they'll get totally confused.

    It costs a bit more but secrecy is expensive.
  3. Do you really think brokers go trough accounts to figure out what their costumers do ?

    I should say that I would not be surprised if they did, I mean when it comes to money people would do just about anything.

    However as long as the costumers do well the broker will do well too, right ?

    In my opinion most brokers simply don't care about " figuring out " what their costumers do and place more energy and time on how to get more costumers, that is a sure money maker.
  4. If someone can *easily* figure out your "secret" it is not an edge.

    Of course brokers would monitor what you are doing but only if you get to Warren Buffett level. If they see an account go from 1000 to 100 million in a short time you can be sure *somebody* will be looking at it. If you ever get to billionaire level you can just buy the broker or have your own and that way your secrecy is assured.
  5. wickcity


    Without a doubt, I think they do. Especially, the top trading accounts.

  6. Take a look at this automated trading strategy no protection. I don't know the exact strategy but at least I can see what they are doing.
  7. monti1a


    Simple solution...I've had this concern as well.

    I keep my charting software and analysis on a different platform than the one in which my brokers provides. I only execute through my brokers, therefore my brokers do not know how I'm generating my profits if they were so inclined to 'peep'.
  8. Paranoia is a bitch.

    Stop trading if you don't like it.
  9. I wish I had that problem, that my stratergies are so good and profitable that my broker spies on me :)

    I think most trading stratergies have a lifespan of a year or less...
  10. #10     Nov 30, 2008