Starting an automation project with other people - advice please.

[arbitrage16]

I have been trading manually for a couple of years now and have recently begun discussing an automation project with a couple of friends who are very well versed in Excel and various programming languages.

At this early stage my feeling is that the project would approach edge development from two positions - trying to translate what I know about the market and my manual edges into a bot, and secondly harvesting data from the market which can then be analysed to uncover further edges.

My approach will be to put those guys onto a path of learning about the markets initially, spending some time staring at the ladders, and over time begin to introduce my conception of how the market moves.

Be great to hear from anyone else who has done something similar and any experiences they'd like to share - trading is usually a solitary pursuit so will be strange sharing it with others

A practical question I had - is it best to create the bots and then deploy them separately, from our own betfair accounts, or to pool our resources into one and then split the winnings? Both of these have obvious pros and cons, commission being a big factor, so any opinions on this would likewise be interesting to hear.

[BetScalper]

I have been trading manually for a couple of years now and have recently begun discussing an automation project with a couple of friends who are very well versed in Excel and various programming languages.

At this early stage my feeling is that the project would approach edge development from two positions - trying to translate what I know about the market and my manual edges into a bot, and secondly harvesting data from the market which can then be analysed to uncover further edges.

My approach will be to put those guys onto a path of learning about the markets initially, spending some time staring at the ladders, and over time begin to introduce my conception of how the market moves.

Be great to hear from anyone else who has done something similar and any experiences they'd like to share - trading is usually a solitary pursuit so will be strange sharing it with others

A practical question I had - is it best to create the bots and then deploy them separately, from our own betfair accounts, or to pool our resources into one and then split the winnings? Both of these have obvious pros and cons, commission being a big factor, so any opinions on this would likewise be interesting to hear.

Passing on an Edge to someone else is dangerous. What happens if they then sell this information onto a sports trading company who then in turn start dumping ££££££ into the market. Sooner or later you edge will disappear.

[Dallas]

I guess it comes down to how well you know and trust the people your about to work with.

There nothing wrong imo with working in a small group of trusted friend then either pooling resources into 1 account for the purposes of the bot or each running the bot/s yourselves providing you can stick to staking agreements etc and you don't start in house fighting trying to front run one another

[wearthefoxhat]

What Betscalper and Dallas say...

If you're not sure about some of the crew, then forming a collective via a legally binding contract. (Worker Cooperative) A good accountant would advise.

A Worker cooperative is a type of horizontal collectivism wherein a business functions as a partnership of individual professionals, recognising them as equals and rewarding them for their expertise.

I think your idea is a good approach. If your group all invested into it, then they all benefit from the results. You more so as you would retain the lions' share.

Many stock market traders are now basically algo baby sitters (with computer science degrees) that can analyse and tweak the algo if it doesn't behave.

[arbitrage16]

I think your idea is a good approach. If your group all invested into it, then they all benefit from the results. You more so as you would retain the lions' share.

Yeah, I appreciate the risks outlined in other posts - some perhaps a little apocalyptically - but agree that by pooling the expertise we have then the project becomes greater than the sum of its parts.

Your mention of 'lion's share' is also relevant, I have been wondering how to organise this between the three of us. I have worked incredibly hard for 2 years to acquire this market knowledge so feel that is fair, but am sure they would probably think otherwise I considered an equal 3 way split, as if I was to take the lion's share that might create ill-will and a likelihood of a split further down the line.

[wearthefoxhat]

I think your idea is a good approach. If your group all invested into it, then they all benefit from the results. You more so as you would retain the lions' share.

Yeah, I appreciate the risks outlined in other posts - some perhaps a little apocalyptically - but agree that by pooling the expertise we have then the project becomes greater than the sum of its parts.

Your mention of 'lion's share' is also relevant, I have been wondering how to organise this between the three of us. I have worked incredibly hard for 2 years to acquire this market knowledge so feel that is fair, but am sure they would probably think otherwise I considered an equal 3 way split, as if I was to take the lion's share that might create ill-will and a likelihood of a split further down the line.

I suppose it depends what they bring to the party.

You could always make it 28/28/28% split, with 16% put into a long term pool (you can define long term). Anyone that jumps ship early, forfeits future shares in the 16%.

[Dallas]

I think your idea is a good approach. If your group all invested into it, then they all benefit from the results. You more so as you would retain the lions' share.

Yeah, I appreciate the risks outlined in other posts - some perhaps a little apocalyptically - but agree that by pooling the expertise we have then the project becomes greater than the sum of its parts.

Your mention of 'lion's share' is also relevant, I have been wondering how to organise this between the three of us. I have worked incredibly hard for 2 years to acquire this market knowledge so feel that is fair, but am sure they would probably think otherwise I considered an equal 3 way split, as if I was to take the lion's share that might create ill-will and a likelihood of a split further down the line.

I suppose it depends what they bring to the party.

You could always make it 28/28/28% split, with 16% put into a long term pool (you can define long term). Anyone that jumps ship early, forfeits future shares in the 16%.

Another way would be to ratchet it so you get the greater share to start with but hand over bits of it over the months once your jobs mainly done and you've brought them up to speed and they are looking after the excel side now.

[arbitrage16]

I suppose it depends what they bring to the party.

You could always make it 28/28/28% split, with 16% put into a long term pool (you can define long term). Anyone that jumps ship early, forfeits future shares in the 16%.

I have no idea about Excel, they have no idea about the markets, indeed have never opened up betfair. Part of the problem I have is understanding if they are too 'big' for the project. One of them is a software engineer, which sounds great, but I'm not sure if that is really required for building a bot to trade horse racing markets, given that I've never done it before.

I suppose the question of how much Excel knowledge is required for creating a bot is hard to answer, because you can go pretty deep with these things.

I think the idea of a long term pool is a great one, something I hadn't considered. My experience with people/money is that it can make them do funny things, so part of my hesitation about green lighting this project is that it'll turn people into arse holes and end up being more stress than it's worth. I think the long term pool legislates somewhat against that.

[ShaunWhite]

Would the share you expect to payout exceed what a contract coder and perhaps local data analyst would cost?
From what you describe you're bringing the lions share of the knowledge to this venture, a split might end up being expensive in the long term. Knowing Excel and a bit of other languages doesn't sound like an especially valuable skill or hard to source, how's their understanding of APIs etc or working on other collaberative projects or trading systems? How sophisticated will your system be? Re: where to start, data collection and analysis starting about 4-6 months after that, then followed by a trading system.

Don't fall into the 'dragons den' trap of giving away half your new business just for the want of some hired help for a few months.