Know-How Exchange : Research/Metrics

Hi Prashant,

Read your link and found it interesting. Besides the money though, is there any advice you want from this forum?

Koen

You're asking for investors to purchase your theory. Crafting algorithms based on optimizing results based on past data is (relatively) easy. Crafting algorithms that work into the future is hard. You need to prove you have something that works, and the best way is to garner a substantial track record audited by an independent/trusted organization (and runs automated, not with human input). Once you have the verified proof, investors are more likely to be interested (and before you hire an auditing team, talk to investors first to ask which firms they trust to do this analysis).

Just curious, have you published any papers on statistical theory, or on the application of statistics to financial markets?

If I were in your situation, I would begin by conducting seminars for financial planners on the application of statistics, or I would be in a blog discussing the application of statistics for financial applications, or I would do something (if you have not done so already) to position yourself as an expert in this area, and to introduce yourself to keep people in financial markets before asking for money.

I have been a successful trader in commodities futures and have co-authored a book on the subject. I am quite familiar with Fibonacci and used technical factors in my own trading. I've also sold training courses on the subject and spoken widely on the topic (even in Vancouver).

Regardless of how successful your trading strategy is it will not be an easy sale. There are not many who can keep their own egos in check and trade successfully, regardless of the system or strategy. And among those who can, the life of a full-time trader is not most people's idea of a great lifestyle. And part-time traders don't last long, as you undoubtedly know.

So the problem becomes how to make money with your system. Should you market it to others, use it for your own account, hire people to implement on your behalf, or become a professional fund manager?

I have too many dents in my helmet to recommend marketing the system to others. The problems are many; you won't get rich that way. It's very difficult to get traders to buy a "black box" system, and you don't want to reveal the essence of your approach without some assurance that you'll be properly compensated. Catch-22.

So the choice either requires a significant investment of your money or a significant investment of your time, or both. How confident are you in the system? Are you ready to bet everything on it? Do you have the discipline and confidence to take the plunge on your own?


P.S. After several years marketing the book and the course, we finally sold our rights to a large commodities broker, they made a few modifications, and they now use it internally and with certain trading clients. So much for that project.