I have been pondering the following scenario. What if you have a solid trading style that makes you money and that is easy to follow and generates high probability setups. Lets say it is an easy breakout system. Your broker has all the information on how you enter, exit and manage your trades. If they see a customer making good returns do you believe they will try to study the customers trades and take advantage of the information? And if they do. Is it possible that the trading system leaks out, more people trade it, and it looses its edge? Or am I just being paranoid
Last edited by zktier; November 14th, 2012 at 09:05 AM.
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Decent brokers are HAPPY for their customers when they do well. You are protected by privacy rules as far as your account so no is allowed to share/distribute your method. If your wins are consistent and last for a quite some time, it is not uncommon to be approached by your broker to see if you would like to become a CTA and get some guidance from there.
Since your question started with "what if...." I think you should build it first and focus on that.
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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It's never wrong to be paranoid in that matter. I don't think that anybody can easily grab your strategy from simple watching the executions. But the attackers can do front running your trades. The main attack surface are the binaries of your strategy.
For the sake of argument. If you are dealing with an unethical broker that somehow figure out the core of your strategy and is using that information to make their own trades. Would that change the market structure? I am thinking that the broker want to keep that information a secret and prevent more people using that edge.
An real example might be the turtle method. When that became official did the edge disappear or did it not change the market structure in any real sense?
I don't know enough about anything to compare.
I'm just talking about my (very personal) paranoia - I don't trust anybody but myself, and even myself I trust only so much (very little, actually).
So, what I'm saying is: I prefer to do business (any kind of business) directly, by myself, using only minimal resources, and without intermediary/middleman/broker - just so that I can still sleep at night.
One more thing - with regards to the "shill" - I have absolutely no intention to attract any kind of attention towards the tiny market niche that I may (or may not) have discovered for myself. I completely support everybody's attempts of finding their own path to happiness, even if they want to walk down a path that I would never even look at.