I honestly don't know what the paranoia is about here. A system that does about 50 trades a year. I highly doubt you are going to get so front run that the edge would evaporate unless you somehow magically get the low tick all the time. The holding period for trades is very important here too. Are you holding for days? If so, how is a broker going to destroy that edge? Are these just very high probability daytrades? The ones that should be worried are scalpers, but seriously, what is with all this paranoia? I sincerely hope you are literally making millions to be this worried about someone stealing your code.
I know some one who is extremely successful in day trading only works on single chart. unfortunately I do not have many of his trades. possibly James Simons' system is abased on single chart too, since he diversifies among so many markets.
Okay. I understand all that. Thanks for the explanation. My follow up question - is that how prop desks are run at Goldman Sachs, JP Morgan, DB, Morgan Stanley?
Thanks Epic for your comments. How could you prevent others to use your signals? As an investor may place just $1 million with your CTA program, however he could actualy use the same signals of yours to invest extra $10 Million (i.e. 10 times) by himself under his own management, without paying you any fees for the $10 Million. Do you use the same/similar sort of "NDAs, Non-Competes, and Non-Circs" you mentioned below? Regarding Non-Circs, do you mean Non-Circulating, why?
Strategies with fixed rules do not work consistently to worry about protecting your strategies, most successful strategies have huge element of discretion. Price patterns and volatility patterns do not follow consistently repeatable patterns , although price may make regular up and down movements , these irregular patterns are not copyable. How price travels from a to b varies in multiple price movement patterns, deploying all the patterns together may produce profits on some , but losses on others.
Tenthousandmen - on a separate note, is it just me, or was your negative review of NinjaTrader (along with your thread that used to be here - http://www.elitetrader.com/vb/showthread.php?threadid=245094) deleted? If that's how ratings work on ET, can we get rid of all the ones with red down arrows removed from MultiCharts (http://www.elitetrader.com/so/?action=view&SR_ProductID=123) as well?
Non-Circ = non-circumvent It precisely deals with part of the issue you are talking about. They sign a legal contract stating that they won't attempt to circumvent my program by running $20MM in their own account, and $1MM with me. Or, using my trades as indicators to run their own program for other clients. In any case, it doesn't really matter as they only have access to end of day updates sometime in the evening. I trade far more frequently than that. The likelihood is that if they tried to mimic the overnight position, they completely miss the intraday round-turns that have already been exited for a profit. The edge would be completely gone in that case and they would make more money just having me run the whole chunk, even after fees.