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The sharing/not sharing dilemma

  #32 (permalink)

North Carolina
Trading Experience: Beginner
Platform: NinjaTrader, Tradestation
Favorite Futures: es
Posts: 644 since Nov 2011


1. Okay, right so you shared the problem in your analysis. We'll also be offering out at the same prices: so we can't all get the exit. And we got in at random prices. Even if all the traders only moved the market 1 tick then that's a problem, it means you will be giving up at least 1/2 tick on average. It is 1/2 tick because 50% of time you will get in before the others and 50% after. On the exit, you can also expect -- even if it is 1 tick then that's another 50% or a total of 1 tick. There are very few specific scenarios where this can benefit you. The only real scenario is that if you can drive up the price enough to trigger stop losses or entice new buyers. I should point out that any trading designed with the intention to create a disruption is prohibited. But even if you trigger the stop losses, you only need enough buyers to trigger those stops. You don't need more. Why? Because there won't be but so many stops. It means you still have a constraining factor.

2. Look you can use a limit order or a market order. Both are constrained by scarcity in time/price.

3. It is very possible to develop a quantitative/systematic strategy in 6 months (even 1-3 months). The 50k is your time cost for the development of the strategy. My point is if you spend 6 months on a strategy at average ~20 hours per week at a professional rate, you have to make 25k-50k to cover your time cost. This is a real problem if you are an independent trader with limited capital. On the other hand if you can sell the strategy for $1k: you only need to sell 25-50 copies to recoup your time cost. More importantly, you did that without taking market risk.

Last edited by tpredictor; April 21st, 2018 at 02:15 AM.
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