The value of a strategy
The value of a strategy is not only in “how much it earns”, but in how the capital is utilized. The same strategy can skyrocket its profits not by changing the performance, but by changing the business model. With external capital and the right profit split, the trader’s performance multiplies.Personally, having developed a strategy with 15+ years of data and 2 years of LIVE, with almost perfect convergence between backtest and real transactions, I discovered that the most powerful asset is not only the system, but the way it is positioned in the market through the appropriate capital structures.How do you really utilize a profitable strategy?The same strategy can give completely different profits, depending on the partnership model and the type of capital.Let’s assume that my initial capital is €5,000.1️⃣ Trading with my own money (Broker)Capital: €5,000 – Return: 80%/year – Net profit: €4,000 – Performance fee: 100% to me👉 Trader profit: €4,000/year2️⃣ Darwinex (investor fund management)Cost: €5,000 – Capital under management: €500,000 – Return: 15%/year – Net profit: €75,000 – Performance fee: 15%👉 Trader profit: €11,250/year3️⃣ Prop Firms (capital of companies with profit split)Cost of challenges: €5,000 – Capital under management: €500,000 – Return: 6%/year – Net profit: €30,000 – Performance fee: 80% to trader👉 Trader profit: €24,000/year
