So I created this software...
- Thread starter Ian R.
- Start date
"your stockbroker", 10 years ago I was a stockbroker, a retail stock broker, it was never about being good at trading. The stockbroker who was "good" was just the best guy at sales, it had nothing to do with the quality of trades our book kept. I left that job after one year, retail stockbroking by human brokers should be made illigal!
I traded on E-trade when I was a teenager, did not even know what a stockbroker was then! Back in the dot com days I made way more than 30%, more like 300%. My point is I had a trading strategy, maybe not as state of the art as yours is today, but more sophisticated does not mean better, more parameters can mean more noise. At the end of the day, it is what it is, if serious about finance take the route most people are logging on to this forum for, an MFE.
Ah how I missed this site :D If I could get 30% monthly returns, the only thing you would see changing is my IP address from Canada to somewhere out in the tropics and a display picture of my gold plated yacht. This message would have also been typed by my gold plated parrot assistant 
Ian R. which broker are you using now? Run your system on that broker, generate monthly performance accounting reports for about a year or so, and once you have statements from a reputable broker showing that you have a sustainable track record of 30% a month, it shouldn't be too difficult to find a FoHF willing to seed your account. I'll recommend Interactive Brokers, pretty good commissions and API and they cater to institutional investors and hedge funds so it's a good starting point.
And if your system really works that wonderfully, so much so that your account has grown too large for you to administer, companies like Citco can help manage your legal, fund accounting, and investor relations requirements.
The idea here is that you need a track record, and reputable third-parties to verify and vouch for your record. 1 month simply isn't enough. I once had an account which gained 300% in 5 months, only to lose almost all its starting capital subsequently due to over-leverage
Any potential investor will want to be sure that your system doesn't do the same thing.
And if your system really works that wonderfully, so much so that your account has grown too large for you to administer, companies like Citco can help manage your legal, fund accounting, and investor relations requirements.
The idea here is that you need a track record, and reputable third-parties to verify and vouch for your record. 1 month simply isn't enough. I once had an account which gained 300% in 5 months, only to lose almost all its starting capital subsequently due to over-leverage
Any potential investor will want to be sure that your system doesn't do the same thing.this should be patently obvious, and i'm surprised no one's brought it up yet.
the past few months have been extremely rosy for equities. you could pick a stock at random and see gains of 5 to 10%. in fact, every single trade i've made over the past three months is currently showing green in my portfolio. one options trade i did last week is up 66%. do i feel good about this? sure. do i know that a lot of this has to do with headwinds and nothing to do with me? absolutely.
as many have pointed out, you need much more than just a month, especially if your test is in as good a quarter as we've seen.
edit: incomplete sentence
the past few months have been extremely rosy for equities. you could pick a stock at random and see gains of 5 to 10%. in fact, every single trade i've made over the past three months is currently showing green in my portfolio. one options trade i did last week is up 66%. do i feel good about this? sure. do i know that a lot of this has to do with headwinds and nothing to do with me? absolutely.
as many have pointed out, you need much more than just a month, especially if your test is in as good a quarter as we've seen.
edit: incomplete sentence
Especially if you have AAPL in your portfolio.
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Actually some of the successful trades were shorts. At least backtesting.
Sorry to also state the obvious but 1 year is an awfully long time to get the data... and at 10 trades maximum a week so far (since I am under 25k so I can't do any intradays) it's AWFULLY SLOW too.
Human error is also a factor: I am using Scottrade and they have no MOC trades for example. So I missed the 4 PM deadline a few times.
THEORY and practice is a world away... hence why some paper trades look wonderful but the reality is way different.
Also.... fees EAT a lot.
For example with a meager capital of 2K, leveraged 2X to play with 4k, each roundtrip is $14 ($7 a trade) and there can be about 20 such roundtrips per month.
For a total of $280.
I need to GROW by 7% a month just to keep even with FEES.
Imagine 1k non leveraged and you NEED TO GROW BY 30% A MONTH just to get even with fees.
This is the real world... as I experience it now. Maybe you tell me of your cayman islands fantasies because I do 30%... but if one has little funding they are stuck at that for a long while.
Who among you really try to make money off of trading? some of the answers here seem ignoring the sad reality I outline above.
Sorry to also state the obvious but 1 year is an awfully long time to get the data... and at 10 trades maximum a week so far (since I am under 25k so I can't do any intradays) it's AWFULLY SLOW too.
Human error is also a factor: I am using Scottrade and they have no MOC trades for example. So I missed the 4 PM deadline a few times.
THEORY and practice is a world away... hence why some paper trades look wonderful but the reality is way different.
Also.... fees EAT a lot.
For example with a meager capital of 2K, leveraged 2X to play with 4k, each roundtrip is $14 ($7 a trade) and there can be about 20 such roundtrips per month.
For a total of $280.
I need to GROW by 7% a month just to keep even with FEES.
Imagine 1k non leveraged and you NEED TO GROW BY 30% A MONTH just to get even with fees.
This is the real world... as I experience it now. Maybe you tell me of your cayman islands fantasies because I do 30%... but if one has little funding they are stuck at that for a long while.
Who among you really try to make money off of trading? some of the answers here seem ignoring the sad reality I outline above.
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If you are using AI it should be a joke to backtest.
Seriously, you are looking like a fool right now. 12 trades is not statistically significant.
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Yes but as I explained above it is slow on the real side... for backtesting I did hundreds of tests and I can see its performance quite well.
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Aren't we supposed to quote our returns net of Transaction costs , 'coz if thats not the case I can give you whatever gross returns you demand....
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Can we have a trial version for 1-2 days or you're still on the path of "people who matter" campaign?
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It is on a secured server and uploads results to a site every day
No need to distribute my code 
koupparis
Carpe noctum
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How long was your backtest period? I belive I saw 60 days, that's hardly a backtest, and it's heavily dependent on market conditions over that period. Which equities were you trading? How were they selected? Did you incorporate transaction costs in your backtests? Slippage? What's the frequency of your strategy? Were you using bid/ask prices or mid? There are many many more questions to consider when doing a backtest/presenting results. Answers to some of these may point to holes in your algo (or not).
Interactive Brokers charge only $1 per trade I believe.
If you're short on capital, but you are highly confident in the direction and time-frame of your picks, try leveraging by trading vanilla options or put/call spreads instead of stocks. The maximum drawdown is obviously much higher, but if your system is really that good the rewards should outweigh the risk.
If you're short on capital, but you are highly confident in the direction and time-frame of your picks, try leveraging by trading vanilla options or put/call spreads instead of stocks. The maximum drawdown is obviously much higher, but if your system is really that good the rewards should outweigh the risk.
alain
Older and Wiser
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Correction, for Stocks, IB charges 0.005 per share with a minimum of $1. Here is the full fee schedule
http://individuals.interactivebrokers.com/en/p.php?f=commission
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