What is considered best practice in protecting an EA from pirates?

Elkart posted:
    Basically me experience is that if you can really do this, money arrives and it arrives fast. People can tell if you know what you're doing or not. No need to sell EA's.

You can not trust a client not to fiddle with EA's. You'll always get a genius that wants double the money and goes double the trade sizes, then when he wipes out it's all over the forums and internet. You can't even trust them to always have internet or electricty so they're online at least. Or even understand what they have to do.

And you definitely cannot trust a third party tool to be reliable. Not when someone trusts you to do the best you can not to lose their money. What happens if that tool starts doing doubles trades? What if it's offline? And how would you monitor it?

These are excellent points to remember. Problem is most EA creators do not care too much about their client's money since the money is made from the EA's fees and not the trading.

For a professional trader, using a third party service and relying on it would be indeed out of the question.

Thank you all so much for your valued input and ideas I can use to move forward on.
Regards

Elkart posted:
    Not something I would do. Need to have direct control of what's happing in the clients account. Ultimately I'm responsible for that account and liable in many cases.

Not an option for a real pro.

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Basically me experience is that if you can really do this, money arrives and it arrives fast. People can tell if you know what you're doing or not. No need to sell EA's.

You can not trust a client not to fiddle with EA's. You'll always get a genius that wants double the money and goes double the trade sizes, then when he wipes out it's all over the forums and internet. You can't even trust them to always have internet or electricty so they're online at least. Or even understand what they have to do.

And you definitely cannot trust a third party tool to be reliable. Not when someone trusts you to do the best you can not to lose their money. What happens if that tool starts doing doubles trades? What if it's offline? And how would you monitor it?

I have to disagree here. With this method you are selling trading advice, not managing client money. The client subscribes to your your advice for which they pay a fee, and they have the option (not obligation) to auto trade your signals. You are no more liable than you would be for selling an EA directly to a person for their own personal use. The client controls their funds with their broker, meaning they can stop trading your advice at their discretion.

The risk management is worked in to the signals. For example if the account your displaying has $100,000 and trades 2 standard positions per trade, a subscribers account of $10,000 would trade 2 mini lots. A subscriber could of course, reduce or increase the position size if they wanted to.

If the subscriber fiddles with the recommended settings it's their own prerogative. They can change position size, exit the market early, or stay in longer. So, yes it is a risk but, as far as some dolt wiping their account out because they chose to take on risk in excess of the system, and then posting horrible things all over the internet. It isn't that likely for a few reasons. For starters every trade is audited by the site and displayed publicly. So even if 'imbecile X' blows their account and blames it on system XYZ, XYZ's complete trade by trade history is available to the public. The only way this would be bad for the developer/trader is if the system really does suck and they are still trying to sell it. But, that's a value add for the subscriber. The other thing that can be done is to name your system something different than what the public may know you by currently. So let's say you write a trading blog and don't want your name tarnished by 'imbecile X' for no fault of your own. Just name the system something obscure or unrelated. The performance of the system is what matters anyway, not a catchy name.

Can't trust a 3rd party tool???(that made me laugh histerically) MT4 anyone? That is a 3rd party trading tool. The same concerns could be raised about it's connectivity (or any electronic means to trade). That is one of the inherent risks of trading retail FX. If you deem it to be too risky then it would not make sense for you. I am just throwing it out as an option.

You are right in that there's no need to sell EAs however, selling your trading advice is not the worst idea in the world. Assuming your trading advice is worth anything... And if it is, the sales revenue is infinitely scalable. So 'not an option for a real pro' is a fairly narrow way of thinking. Assuming by 'real pro' you mean a person who trades for a living/business ( AKA profit).

Since maximizing profit and minimizing risk/expenses are the 'meat and potatoes' of any money making business, I'd have to say that adding a low risk revenue stream with negligible work load increase is something that every 'real pro/professional trader' would do. Especially when it does not impede your ability to manage client funds...
 

In South Africa I'd be legally required to register with the Reluatory Services if I dispensed trading advice. Yet if I use software I wouldn't.

I don't personally know one successful pro trader who sell signals. The guys who I know either trade their own accounts. Or trade client accounts, or mentor. And to me it's not an option either. Client has very little chance of making money. I'd rather trade for him.

Same with distributing EA's. Plenty of asking for setting here and other forums where people just can't get them to work.

I probably do think about this lot with blinkers, quite right. But to my mind, to make money for a client, I'll have to do it for him.

And a question that I'm asking myself more and more everyday is whether I want clients at all. And everyday the answer is little bit more no...

Hardly seems worth it. I'll deal with principles still, but retail clients I don't want to handle.

That's certainly understandable. 'Investors' are barely tolerable and only worth the trouble if they add substantial value. So, if they aren't needed I wouldn't deal with them either.

Providing specific advice requires registration here in the States too however, publishing general advice does not. Publishing trades is not even really advice, they're actions that are being reported so, advice is not the best way to describe it. Broadcasting trades to people who pay to see what you're doing is perfectly fine in the US. Many personal trading blogs already post live trades, which is not unlawful. So, a trader/developer could not provide individual advice to Tom Jones and different advice to John Doe however, they can provide their advice to anyone interested in receiving/paying for it. For instance a person could go onto any forum and post that they believe gold will decline soon because, blah, blah, blah. They could do the same thing in a paid newsletter or any other subscription.

I'm not familiar with the laws in South Africa, though.

As for not knowing any successful traders who sell advice. Just because something is not done today (or is, and is just unfamiliar to you), does not mean that it is not effective or reasonable. And, if there were no successful traders selling advice, even better. A profitable trader would spread like wildfire and generate a healthy revenue from subscription fees.

I know Timothy Morge sells advice via a membership type forum. He (someone he employs) also publishes advice on twitter.

Obviously it's not going to be everyone's favorite thing to do however, selling trading advice is more than worth it for me if it doesn't take any more time out of my day. I'm a big fan of efficient, scalable, systems.

I know Ed Downs sells signals in stocks. And he's a successful trader. So I know people do do it.

But none of the ones I know do. And I suspect there's a reason for that.

Elkart posted:
    And a question that I'm asking myself more and more everyday is whether I want clients at all. And everyday the answer is little bit more no...

Hardly seems worth it. I'll deal with principles still, but retail clients I don't want to handle.

yeah, you don't win in either case.

i would say that if you can afford to trade your funds only, this would be the best way to go. once you trade someone's money, it feels like you're working for someone which ironically, is the opposite point of trading.