sell your strategy

Discussion in 'Strategy Development' started by cwazywabbit, Oct 14, 2008.

  1. Is there a company/firm to whom you can offer a winning strategy that would assess it, trade it and give you a percentage? (Collective2 is not what I have in mind.)

    I cannot trade it through retail for reasons of size and access to financial instruments.

  2. MGJ


    Do you want a percentage of the losses too, or just a percentage of the winnings? It's a question buyers will probably ask.
  3. Sophiekay: I think that looks a lot like collective2. The strategy isn't something I want to explain nor give so publicly. It involves a few instruments, it's not an indicator.

    Mgj: I wouldn't be able to take losses if they were trading a million dollars with it. It's something they would assess, run their own numbers and decide whether to take it on or not.
  4. Put together an extensive back test, higher a coder, higher a lawyer, and read how other traders did it.

    The Trading Edge

    Like everything else, it most definitely is doable, but you must put in the work.

  5. thanks for advice.

    I guess nobody knows a firm or company that is interested in buying other peoples systems?
  6. CBuster


    Such firms do exist - mine for a start. But, in my experience, many traders are shocked by (a) the level of detail and testing needed before going live and (b) the % split of the profits received by the system "seller".

    For example, we will not pay up-front for a system. We might pay a % split of the profits if (and this is a big if) the "seller" fully discloses the rules of the system and we run our own tests to confirm it works.

    Then we will programme the system ourselves and forward test in very small size. If all works as expected, size increases.

    Lastly, the seller gets paid. As a guide, you would be doing very well to get 20% of the upside in my view given you are not putting up any capital and the "buying" firm would be doing all the development work.
  7. MGJ


    Meanwhile the "seller" has fully disclosed her intellectual propoerty. In effect, giving it to you for free. A dishonest firm (perhaps not YOU, but some other nefarious firm packed with Shady Characters) would always discover that their own tests confirm the system not to work. The "seller" is always sent away with nothing. Then, one month later, the dishonest firm starts trading the system without paying the seller.

    How is a seller to decide whether or not your firm is trustworthy?
  8. CBuster


    Great point. This is one reason why we generally only pick up new traders / developers via introductions from people the firm knows well - where there is some level of trust. Trust (on both sides) is key.

    Anyone in the OP's position - i.e. a non-professional trader who needs capital but has (in theory) a working system - has a similar problem. No-one is going to put up capital AND trade it for you AND trust the system AND trust the porgramming skills of the developer without getting a decent handle on the rules of the system. I know my firm wouldn't!

    Oh - and FWIW - I am just a "lowly" trader. I don't own the firm I work at so I have nothing to offer the OP in this respect. I was just trying to give them an idea of what "deals" might be available. I have, on occasion, refered traders who have been signed by the firm, but not purely on the back of a post on ET! lol
    #10     Oct 15, 2008