Selling systems I developed to hedge fund

Discussion in 'Professional Trading' started by mchugh, Jun 26, 2005.

  1. mchugh


    These are all very valid concerns and great suggestions, but the bottom line is that unless you know someone very well who is a higher up at the hedge fund, how can you trust anyone. I'm not a computer guy and my systems are not complicated. They just work. So I don't think I can trust anyone with them, regardless of security precautions I might take. I don't know enough about computers to know if I'm making an intelligent decision when it comes to firewalls, TCP's, etc.....

    And I do think that a growing hedge fund would be open to new systems which might diversify risk, open doors to a new market (the bonds), etc. If a hedge fund is growing rapidly and doesn't trade in a liquid enough market to bring on new funds, then a new market is their only recourse to expand.

    Thanks again for all the interest.

    I'm just as confused now as before, though.
    #31     Jun 27, 2005
  2. I will try to clarify things for you.

    2/ If there is no disclosure, you MUST have a real money trading track record before anyone will even talk to you. You are not dealing with general public here and standards are much higher.

    There is hundreds of inquiries, similar to yours, per year at HF's .

    Your options are: 1/ Get a break from trading and see if you can come back and trade your systems again.
    2/If not , find someone who will trade it for you.
    3/If you can come back then trade it, develop track record then sell yourself as a trader.
    #32     Jun 27, 2005
  3. mchugh


    Sounds good, Walther - that's what I've been doing - building a track record. I'll continue to do so and in a year or two's time, I should have sufficient data to sell. I was just curious as to the nuts and bolts of such a transaction.

    #33     Jun 27, 2005
  4. Could you hire an employee to trade the system or have a brokerage firm trade it for you.
    #34     Jun 27, 2005
  5. mchugh

    I'll tell you what give it to me and I will grind it out for you.

    I sit here all day and grind the box anyway so what's another grind... :D

    I will split it with you 30-70 of net profits.

    As a man of deep faith your secret is safe with me.

    I answer to a higher authority then non disclosures. :)
    #35     Jun 27, 2005
  6. mchugh


    I would rather trade it myself if I'm going to assume the risk. After working on the floor for eight years and seeing what I saw, I have a problem with trusting others in this industry to be as competent as I would like them to be.

    The brokerage idea isn't a bad one. But again, continually broadcasting my trading signals doesn't appeal to me. They could be found out.

    I think Walther hit it on the nose. I have to grind it out and build a longer track record, then make some sort of move after that.
    #36     Jun 27, 2005
  7. mchugh


    Sounds good Samson77, I'll send it right over! :D
    #37     Jun 27, 2005
  8. Hi Walther,

    Do you mind saying how this is done? Also will it work on signals derived from esoteric strategies like say Gann's square of nine or astrology?

    I suspect what you say is possible, but I would lke to have an understanding of the process of reverse engineering signals.

    Thank you.
    #38     Jun 27, 2005
  9. prophet


    Yes it is possible. There are quantitative traders that can look at the system trades and statistics and have a good idea of the basic setup or opportunities the system trades, then hone-in on a match using optimization or search methods. However, I wouldn’t fear this too much because such traders are probably smart enough they don’t need to make money by reverse engineering systems. They can probably design their own excellent systems.

    There are plenty of hedge funds that have capital and motivation, but not the kinds of market insight and brainpower to reverse engineer a truly robust and novel system. They may not farm out that task for fear the guy doing the reverse engineering will steal the algorithms.

    The more sophisticated the system, the more difficult it is to reverse engineer it from the signals. This is especially true of adaptive systems.
    #39     Jun 27, 2005
  10. I've visited Collective2 and its a great signal site. If the Systems Developer is getting out of the tradign aspect of the business, then this is a great resource. These people may contact you independently while using the service to arrange something private, so you would end up with more than $100 / mth or such in fees for the signals.

    But the best alternative is to post your resume, possibly including trading / systems results on monster or efinancial as a prop / quant / systems trader and request an outrageous salary and then be taken seriously off the bat rather than work your way through the world of trading signals via internet sites....
    #40     Jun 27, 2005