So my friend and I have partnered up and formed an LLC. We made a deal with my prop firm that we would give them a certain amount of hours of programming work every month if they gave us 20-1 intraday buying power and allow us to keep 100% of the profit.
So, we should have the account funded and ready to start trading sometime in February. The nice thing about 20-1 margin is that we only have to put up very little cash and can trade with a lot of money. We each only put in $5000, so we start trading with $200k intraday buying power. Our plan is to take out nothing and let the account compound and grow. We will start out risking $200 per trade (2%) and gradually bring this down to 1% as the account grows.
The risk of ruin is relatively high to start, but still pretty low, and even if we lost what we put in, it wouldn’t be the end of the world. But that’s not our plan, only an acceptable conclusion.
The testing has been going beyond our expectations. It is trading very well. On Friday it made 9.5R – it is outperforming me.
The nice thing about Interactive Brokers is that they allow you to create a paper trading account, so that you can get a good idea of how you would do if it were real money. This even includes slippage and commissions. The results aren’t exactly what I expect when we go live, but it is as close as you can get.
I plan to post the complete details of this ATS experiment for all to read – I’ve created a category especially for posts about the ATS.

This entry was posted on Monday, January 15th, 2007 at 11:58 pm and is filed under ATS, trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.