Getting Investment/Retail Quant Team Outlook

[mscuyguy]

My partner and I have been implementing systematic and algorithmic trading strategies on the foreign exchange market using Interactive Broker's Python API. For like the first 8 months we lost around $5,000, but recently have learned some important lessons and turned the ship around. We are both engineering background, with strong programming skills and little experience in finance beyond what we have been exposed to so far. We only manage a low 5-figure account (our own money) and I am wondering what is recommended to do from here. For the past 3 months we have achieved solid returns with little portfolio volatility. Ideally we would like to court investors (family and friends), but we do not have a long enough track record for it to be a great sell. It is also a little disturbing to me how much misinformation and scams are out there (especially in forex). How do we go about this in a professional way that makes clear to potential investors that we are the real deal? We are at this weird point where we have great results, but not enough capital.

Also on a side note, I would be interested in what anyone has to recommend for other algorithmic/quantitative ventures besides forex. Forex was nice for us because of a low account minimum and low fees. Options and Equities generally scare us, because we perceive there to be a very big learning curve. We are also not doing any high frequency or statistical arbitrage, so it would be hard to imagine we would have an edge in that area. Any thoughts would be much appreciated. Cheers

 

[BlackMamba]

Two quick thoughts:

1. A couple great months of performance/low volatility is usually not a sufficient quantity to really claim anything at all, in my opinion.

2. To begin courting close family and friends, put together some marketing material (e.g., a fact sheet or pitch deck) describing both qualitatively and quantitatively (to the extent possible) the investment strategy thesis and what objectives (risk, return, etc.) the strategy seeks to deliver to a prospective client. Send these out to close family and friends, schedule meetings to discuss, etc.*

*It's worth noting that there are some obvious regulatory aspects of marketing your service to a prospective investor, so you may need to at some point consult legal council on how to correctly proceed.

My two cents! Hope that helps.

 

[mscuyguy]

Two quick thoughts:

1. A couple great months of performance/low volatility is usually not a sufficient quantity to really claim anything at all, in my opinion.

2. To begin courting close family and friends, put together some marketing material (e.g., a fact sheet or pitch deck) describing both qualitatively and quantitatively (to the extent possible) the investment strategy thesis and what objectives (risk, return, etc.) the strategy seeks to deliver to a prospective client. Send these out to close family and friends, schedule meetings to discuss, etc.*

*It's worth noting that there are some obvious regulatory aspects of marketing your service to a prospective investor, so you may need to at some point consult legal council on how to correctly proceed.

My two cents! Hope that helps.

Thanks, I appreciate your insight.