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Fair price for ATS

  #41 (permalink)

Market Wizard
Boca Raton
Futures Experience: Advanced
Platform: Variety
Broker/Data: Optimus Futures, LLC
Favorite Futures: Futures
mattz's Avatar
Posts: 2,158 since Sep 2010
Thanks: 2,018 given, 3,000 received
Forum Reputation: Legendary

Zoetheus, I want to give you useful info about the retail traders: Most will pay $150-$200 per subscription for the month, and many will even pay that per lot of subscription. Small percentage will pay one a one time fee of $1500-$2500 if the account if large enough ($25K and up). Sharing profits with the vendor is out of the question if soliciting retail accounts, as that would require licensing.

Allow me to share some input that you and your vendor might find useful.

1) The "code" could not be given out to the public, and allow them to trade that on their own. If the system is any good, traders will pile up lots, and that in it self will cause slippage for and deteriorate the returns of the system. So if there is a broker trading this, he/she must be conscious of the number of lots any one trader is given and that info has to be know to him.

2) You must look at the drawdown of any given system, Double it! and ask for an appropriate account size.
Systems sooner or later go through a draw down, and if the customer is not being explained on that, sooner than later, will pull his subscription out. My suggestions: ask for bigger account sizes that trade less lots, this potentially will minimize the risk. Small accounts can't survive most systems.

3) If the system is executed in the hands of a broker or a vendor, how is it being executed? what process is taken place to come as close as possible to the hypothetical/real results for the customers that will come on board? How is the low latency execution will be done?

4) Something I have learned the hardway: Did the vendor program it himself or did he come up with the concept and someone else has programmed it? This is SO critical. The vendor will have to give support on the program that it is running on. For me, if the Vendor wrote the code it's a huge plus, and any potential problems he would be able to support.

I think the data you are gathering is an excellent idea! This shows that you want to help the vendor and the people make the right decision.

Many traders are against automated trading, and I understand the passion of being in control, getting educated and the challenge. But in reality, many traders lose. Automation allows for discipline: automation does not change the number of lots on perception, it takes losses and it takes its profits. I have seen systems that have been trading for years without one single line of code changing.

I hope this will be useful and may many gather info like you do before they release anything out.

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
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