Trader trader competitor?
This year, the topic of trading on various exchanges (stock, currency, etc.), in particular, automated trading, is very popular in Habré. In most publications, the authors consider working with the API exchanges or terminals, and in the comments, users are asked to show not just abstract examples, but specific robots, referring to the fact that a trader in the market is not a competitor and everyone can earn money.
First, I want to show possible methods of monetizing robots, and then return to the question of competition.
I myself work mainly with the foreign exchange market and the Russian stock market, but all these methods can be applied to any instrument; everything depends only on your ingenuity.
1. Selling a robot
You can simply find a client interested in trading robots, show reports of trading or testing (everyone decides for himself) and sell it.
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Pros:
Minuses:
Examples:
2. Trust management
The client may agree on trust management of capital for a percentage of the profits.
Pros:
Minuses:
1. PAMM
The manager trades total capital consisting of his own funds and investors' funds: he performs trading operations on his account, and they are duplicated on the investment accounts connected to him. At the end of the month, the profit or loss from trading activities is distributed in proportion to the investments between the participants of the PAMM-account.
Pros:
Minuses:
Examples:
2. Copying transactions
Now there are services that make it possible to copy your transactions in the client terminals. Also, unlike PAMM accounts, there is not a percentage of profit, but a monthly subscription.
Pros:
Minuses:
Examples:
3. Pseudo trust management
There are customers who want to keep abreast of each transaction and at the same time can not constantly monitor the market. In the case of a pseudo trust management specialist tells the client what to do (via SMS, mail or phone), and the client takes the decision on actions. This can be done not only by a specialist, but also by your robot.
Pros:
Examples:
4. Participation in broker contests
Do you have a robot that you are not ready to bet on real money, but at the same time there is a chance that it will show a crazy result? Many brokers hold contests on demo accounts, the one who earned the most for the allotted period and takes the bank.
Pros:
5. Participation in international championships
Pros:
Examples:
6. Courses, training
Perhaps your system is not fully automated, then you can make a video training, book or conduct a webinar on the trading system.
Pros:
Minuses:
Examples:
Now let's go back to the question, why is a trader to a trader a competitor?
In the Russian stock market, liquidity is not high, so after selling several copies to large customers, they will begin to take all the volume out of the stock exchange (sometimes even moving the market), which will make further sales meaningless.
In the foreign exchange market, where the absolute liquidity competition is still huge, since no one wants to pay for the trading algorithm, if it is known to everyone or someone sells it cheaper.
First, I want to show possible methods of monetizing robots, and then return to the question of competition.
I myself work mainly with the foreign exchange market and the Russian stock market, but all these methods can be applied to any instrument; everything depends only on your ingenuity.
Classic:
1. Selling a robot
You can simply find a client interested in trading robots, show reports of trading or testing (everyone decides for himself) and sell it.
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Pros:
- Immediately get a large amount of money
- The client takes all the responsibility for controlling the robot.
Minuses:
- A client can refuse not so simple as it seems, and start analyzing his work in the terminal, try to disassemble or otherwise get a trading algorithm for further resale, and we naturally don’t need competitors
Examples:
2. Trust management
The client may agree on trust management of capital for a percentage of the profits.
Pros:
- If you are confident in your algorithm, it will bring more money than a simple sale, it is more profitable to rent something than just to sell
- Give the robot no one needs
Minuses:
- Responsibility for trading falls entirely on your shoulders, so it is better to sign an agreement that will protect your interests and the interests of the investor.
- Since you only have a login and password from the account, the investor may not pay the money to the manager, I advise you to discuss in advance the frequency of withdrawal of funds (monthly or quarterly)
Modern:
1. PAMM
The manager trades total capital consisting of his own funds and investors' funds: he performs trading operations on his account, and they are duplicated on the investment accounts connected to him. At the end of the month, the profit or loss from trading activities is distributed in proportion to the investments between the participants of the PAMM-account.
Pros:
- Broker automatically distributes income
- Clients can find you in ratings.
- No need to work with each customer account separately
- Algorithm do not need to give
Minuses:
- Broker can hide the actual amount of signed funds
Examples:
- Most brokers provide their own PAMM account service, and working with them depends on the broker.
2. Copying transactions
Now there are services that make it possible to copy your transactions in the client terminals. Also, unlike PAMM accounts, there is not a percentage of profit, but a monthly subscription.
Pros:
- You are not limited to one broker
- Just as with PAMM accounts, customers can access you via the Internet.
Minuses:
- This is an additional layer where slippage, time delays or other problems are not excluded.
Examples:
3. Pseudo trust management
There are customers who want to keep abreast of each transaction and at the same time can not constantly monitor the market. In the case of a pseudo trust management specialist tells the client what to do (via SMS, mail or phone), and the client takes the decision on actions. This can be done not only by a specialist, but also by your robot.
Pros:
- The most minimal responsibility
Examples:
4. Participation in broker contests
Do you have a robot that you are not ready to bet on real money, but at the same time there is a chance that it will show a crazy result? Many brokers hold contests on demo accounts, the one who earned the most for the allotted period and takes the bank.
Pros:
- Without investment
5. Participation in international championships
Pros:
- Cash prizes
- Good opportunity to shine
Examples:
6. Courses, training
Perhaps your system is not fully automated, then you can make a video training, book or conduct a webinar on the trading system.
Pros:
- Client trades himself
Minuses:
- Naturally, the client should not just tell the trading system, but literally chew all the nuances
- Few customers want to trade themselves.
Examples:
Now let's go back to the question, why is a trader to a trader a competitor?
In the Russian stock market, liquidity is not high, so after selling several copies to large customers, they will begin to take all the volume out of the stock exchange (sometimes even moving the market), which will make further sales meaningless.
In the foreign exchange market, where the absolute liquidity competition is still huge, since no one wants to pay for the trading algorithm, if it is known to everyone or someone sells it cheaper.
Source: https://habr.com/ru/post/244161/
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