DAFGroup, how we earned the first million

Many schoolchildren write an essay on the topic "How I spent the summer." So I, for a long time not a schoolboy, decided to write an article from the “How It Was” series. You will learn from it how we, having organized the DAFGroup company together with friends and relatives, and earned a million by selling our software.

It so happened that one cold March morning of 2008, I made my first transaction on the MICEX exchange. It was successful, and my account increased by 20 rubles in just 5 minutes. Wow i said his eyes glittered frantically in anticipation of a huge pile of money. Very quietly, so as not to frighten away luck, I began to calculate the possible profit: “So, the stock exchange works 7 hours, a deal every five minutes, which means only 84 deals. If in each transaction you earn 20 rubles, it will be, it will be ... big money, 1680 rubles per thousand invested, and if we say a thousand of these thousand? Stop, so this is a day! Multiply by 22 working days. ”After presenting the amount received, I closed my eyes like a cat in the bright sun, and saliva began to treacherously in my mouth. Wow, exhaled and leaned back in his chair. A sharp pain in the lower back, a consequence of a sedentary lifestyle (small oftop: "Children, do exercises in the morning!"), Clarified the dim brain. Where is the hoax? We read the conditions like this: commission of the exchange, broker's commission, my total profit was halved. But this is still a lot of money, even if not 150% per day, but “only” 70. Who then needs plants and factories? Something missed. So what? And taxes, and why do I always forget about taxes? Robbery percentage? No, like everyone else, 13% of the income tax is taken when withdrawing funds, the broker himself pays them to the state, know to carry the declaration once a year. Too good to be true? Well, don't care. Forward.

Also a chair, a table and a laptop three days later. The idea of ​​earning 20 rubles every five minutes failed, and 100 rubles a day, too, so what can I say, even the first twenty rubles could not be saved.
A healthy cynic, in my brain, was wiping the tears of the dreamer: “But I warned, I said, let's study everything, read, count, no, he needs to quickly, quickly, rushed. Where? What for? "
“But after all, the prospects are what, th go” - the visionary objected wearily.
Yes, the prospects are good and I like the idea. It is only necessary to understand what is the cause of failure and correct errors. Are there profitable deals? There are, and why some are closed with a profit, while others at a loss?
Fraer’s greed was overrun, there was profit in almost all deals, but more wanted, and hope was not justified by market movements, the deal had to be closed with a loss. The second reason, the speed of bidding, I do not have time to enter all the parameters in the terminal. While I deal with the buttons, the price will already roll back and you have to fix the loss.
So you need to increase the rate of bids and add an automatic stop-loss from greed, while reducing profits to close the deal. We will solve problems.
Alexey!
A programmer and a brother enter the call, part-time, which is very convenient, who else can write a “small” program for free?
There is a problem, you need to write a simple program to work on the exchange ...
A week later, everything was ready, and our first drive for the Alfa-direct terminal was already helping us with our operations.
')

It went, but I wanted to fully automate the process.
So the program "Fool" was born, it is "Bullhead".

When the price of the asset being traded changed by the minimum specified amount, the program made a purchase transaction and immediately made an order to sell at a profit of 3 commissions (one exchange, a broker and our profit) and stop loss from large losses. To collect all the movements of the market and up and down, the program traded immediately on the spirit of accounts, on one in long, and on the other in short. The COM facility of the Alfa-direct terminal could not withstand the load and died on the number of our applications, they began to look for an alternative. We reviewed a lot of brokers and went to Ayti-Invest, then they also had a COM object to the SmartTrade terminal, which later grew into a separate service, SmartSOM. In the process of working on our programs, we took such an active part in testing and refining the functionality of the smartcom, that the broker turned his attention to us and now we are engaged (for money, of course) of those. support for other developers. Instructions and examples on the use of Smartcom, also our handiwork.

Gradually, over the course of the year, we developed about a dozen different trading robots implementing a variety of strategies. In the end, one of the programs operating according to the well-known strategy “Breakdown Level” was brought to a state in which it was not a shame to show it to people.

And we decided to start selling, and why not? Just a couple of days, they “riveted” an unpretentious website, hooked up a payment acceptance script, from a popular, but not burdened with red tape, a payment aggregator and told the world about themselves in profile forums. We were surprised, but sales went. With a program price of 4,500 rubles, about 70 copies were sold in six months. A good increase in retirement, right?

But most importantly, we received feedback from customers, which gave a powerful incentive for the development of functionality and experience in creating programs running on different software configurations and hardware. Gradually, revenues from the sale and development of software have become for us a significant value, and we decided to make it a real business.
Since this is a business, then the approach to work is completely different, they stopped behaving with taxes and reanimated the individual entrepreneur's private entrepreneur, and now we pay taxes to the state from all payments to the current account. While traveling on the Internet, we found information about the Microsoft BizSpark program, she just started her work and we became one of the first Russian participants. It’s just a gift to get free access to fresh, licensed, clean versions of software for your work. Each course has its own approach, but, in my opinion, you need to pay for the working tools, and the software is no exception. We registered in the program and literally two days later we re-installed the systems ourselves. Now we use 3 copies of Visual Studio 2010, TFS, MSSQL, Windows Server 2008R2 and on a separate server, Windows XP virtual machines on Hiper-V for trading on the stock exchange according to different strategies and testing new software versions. In addition, the ubiquitous office, Windows 7 and Microsoft Expression package for recording training video clips.

I would like to recall the kind words of the Intel company which gave us delicious branded chocolates and a 160Gb SSD for participating in the competition for the best multi-threaded application. The disc is now working and does not buzz in the computer of the main developer. The ability to test your application on a remote 24-core server allowed us to optimize the program and speed up the work of some algorithms in multi-processor environments up to 10 times. It's damn nice when such huge companies like Intel and Microsoft pay attention to small developers and share resources and knowledge with them.

The fact that we act as playing trainers, in the sense that we trade using our software ourselves, and not only sell it, gives us a huge advantage, and that is how the idea of ​​our main product, the R9Dx trading pair Pair Trading , was born. We were always haunted by the idea of ​​simultaneously trading in long and short with one tool, which theoretically significantly reduced the risk of operations, but the practical implementation did not succeed. And once we thought, why not go into a deal in different directions, on different instruments, but one sector of the economy? Theoretically, they move together, but due to different news noise is not the same, thus it is possible to control the risks and make a profit. We tried in the terminal a couple of Gazprom in Long, Lukoil in short. After 15 minutes, closed the deal with a profit. Further tests showed that even at the moment of strong movements in the market, the spread, i.e. the price difference between the instruments in the pair will change slightly, which allows you to clearly control the drawdown in transactions. In fact, this is one of the safest ways to trade on the exchange. We do not pretend to authorship, smart people have long invented everything and called this method of trading Pair Trading, and we still rarely read books, Harry Potter does not count, and we reinvent the wheel.

The work began to boil, and after a couple of weeks the test version was ready, working on historical data. In the course of the tests, the idea came to average the position when the spread diverges, to transfer its average closer to the current values, because the greater this discrepancy, the higher the profit earned and to maximize the profit this discrepancy must be redeemed.
After the announcement of the program, the first order came on the site, we estimated the program quite expensively, for 25,000 rubles, the potential client gave the required amount without unnecessary red tape. But he received the program only after 2 months. Constant problems with the logic of work in the calculation of multidirectional instruments and the protracted output of Smartcom, thwarted our release plan by the beginning of summer.


Terms of development and remain our sore spot, and the delay in release for 3-4 weeks is almost guaranteed. The most prominent example is the release of the third version, which was planned for October 2010, users saw it only at the beginning of April 2011, which is actually not surprising because a small upgrade resulted in a total change of code and functionality expansion, in fact, the rewritten product is not 90% could appear in 2 months. Some customers did not appreciate it, and went to competitors. However, sales only grow.

At first, we didn’t have a rental or demo version, people bought an expensive program on description and video clips that the most interesting customers were not noticed. Six months later, we made available an order for a functionally unlimited demo version for a period of seven days, sales did not fall and remained at the same level. After another quarter, the possibility of renting was added, and immediately the proceeds slumped strongly, but two months later, it gradually returned to normal and has since increased by about 5-7% per month.

Like any profit-oriented business, we have a financial plan. It sounds like this: "A million a year, a million a month, a million a week." And then the same thing, but in dollars.
Why is this possible?
The calculation is simple. To date, the exchange, as an additional method of enrichment, is carried about 100 thousand people. Actively selling them about 30%. The potential circle of people who may be interested in trading on exchanges in Russia is about 2.2 million people.
Approximately 10% of professional traders actively selling these chose this path to generate permanent income, for them our program can serve as a tool that greatly facilitates the conduct of multiple simultaneous transactions with different trading strategies and instruments.
For the most part of people trading on the stock exchange, our program provides an opportunity to get acquainted and start profitable trading with low-risk arbitrage strategies. The implementation of which is impossible without the automation of actions for the simultaneous purchase / sale of various assets. Here, an unimportant advantage of our solution is the availability of a module for analyzing trading strategy settings based on historical data and a virtual trading mode in real time, without executing transactions for “real money”. These modules allow the user to optimize their trading strategy before entering into real transactions.
If we can prove to our non-professional clients the effectiveness of our software (for which the site has a section with examples of settings for various strategies, and what is more valuable, a demonstration of real-time trading), then the client base can expand to 10,000 people and the possible income will approach 126. 5 million rubles. In the case of attracting a mass audience, the client base can reach up to 200,000 people.
It is also worth explaining how we chose the cost of our program.
It amounts to 25,000 rubles for an unlimited license or 1,000 rubles for a monthly rent. If the client chooses the rental application, then the maximum amount limit in the transaction is 250 tr.
It does not make sense to sell more expensive, so our program is not a ready-made trading robot implementing one strategy in the “Pot Type” style, pressed a button and move profit to the ATM, ”here prices start from 100-300 thousand rubles. We, too, are not a simple trading terminal, manually operated, so those 300 rubles per month, as many of our competitors ask, do not reflect the usefulness of the tool.
If you take foreign analogs, then there prices also range from $ 400 to $ 800 for a full license and about $ 40 for rent.
We have not yet regretted setting the wrong prices for our work. Even on the contrary, having learned from conversations with competitors about the volumes of their sales, they were once again convinced that soft coercion to purchase a full license, by limiting the maximum amount traded, was the right decision. And allowed to significantly increase the income from the sale. Now half of the clients who rented the program for more than three months are buying a full license.

In the next 12 months, we plan to increase the number of licenses sold to 1,000. For this, we constantly develop the capabilities of the program. For example, in the last release, the processing time of a tick was reduced to 3 milliseconds, placing an order to 30 ms. This is one of the best indicators among commercially available programs. In the near future we plan to release an update of the robot with the ability to trade through the module "Scalping" glass, as well as a special application for smartphones with very interesting functionality.