Let's say someone wanted to start a trading operation, but obviously has limited funds so they would need to save wherever they can. One place to save is on the IT infrastructure, where in general free tools are available. I would like to hear opinions and recommendation for alternatives, and experiences, for the following setup:- server OS: Linux- OOP: gcc- scripting: Python- statistical analysis: R- linear algebra: Octave- database: BerkeleyDB- front-end/GUI: ??? (Python maybe)As far as I understand, if you aren't selling any software to anyone, you wouldn't need to pay any royalties/licensing fees to anyone. More detailed question I have are:- does anyone have experience with BerkeleyDB? I heard from someone that it is one of the fastest database systems around.- I recently fell in love with C#. Is there anything in the open source domain that compares to it?- what do I gain from going with Linux? I know the mantra is that it is more stable than Windows, but I honestly can't remember last time I have gotten everyone's favorite screen saver, the blue screen of death.- in general, what do I get from using commercial packages that I do not get with the free stuff? Is it worth the licensing fees?Related questions: who to use for data and for brokerage? Since I would be investing a lot of effort in a good IT infrastructure, I want a broker that allows me to place trades through an API. I know that Interactive Brokers is the default answer for small players. I have also heard about Lime Brokerage. However my searching has shown that these discussions on the forum are a bit dated. Has anyone appeared recently?Last question: how much capital do you need to figure out whether a strategy works or not? I realize it will depend on what type of strategy you are trying to implement. I figure the low end to be about $50,000, and the high end about... who knows. I think in the beginning, it's not about how much you make in absolute terms, but about establishing a track record so you can recruit investors.

Berkeley DB is a API for a database, but you need to run c code on top to make it do anything useful. When most people talk about a database, they mean a relational database management system, and the two on linux are postgresql and MySQL.Your main costs are going to be not in licensing fees but in maintenance and support. Fortunately, there are a number of commercial companies that will do support for open source software. Also in a lot of cases, the commercial stuff has a bit more polish and some more capability especially at the high end. The thing that you do save with open source software is not so much in licensing, but in the fact that you don't have vendor lock-in, and if you are starting well beyond the technical limits of the software, you can scale up without paying huge amounts in future licensing.

berkelydb is useless. I hate it. On the totally FROSS front, what about MySQL and Postgres? Also, if you aren't selling software, DB2 is free for internal use for N users I think, Oracle is free for 'development' use, idk exactly what that means. I think this notional person of yours is going to be doing a lot of IT administration work and very little trading. Other businesses don't employ IT pros, programmers, dba's, etc. to manage this stuff because they are wanton cash-wasters. Also, the upfront licensing fee for software is generally a very small part of how much it costs to use and maintain.

I was involved in a startup hedge fund a few years back, I realise your not quite after the same thing, however the lessons I learned may still be of some benifit...The most important aspect for both your business model and trading models should be to keep your costs as low as possible. so you can maximise your profit margin.SoftwareUse of free software is a great start, and you should extend this as much as possible to include all software services, such as file server. dhcp, dns, firewall, email etc. Consider "outsourcing" as many of these as possbile - eg using web-based email rather then your own email server. Less hassle for you, and you won't need to worry about redundancy. It's most likely your desktop uses will want to use Windows and MS Office, to keep your costs down, think about OEM licences or even better, look at openlicence reseller, such as discount-licensing.com for job lots on Windows amd Office licences (yes this is actually legal).HardwareThink seriously about buying second hand hardware of eBay/Dell outlet or similar. You do not need the latest greatest kit for your workstations or server(s). It's very tempting to think your programs/databases require huge amounts of computing power to run quickly and effeciently. I run Postgresql on my workstation at home, which is a cheap AMD +3200, and performance is more then adequate. Most software services, file servers, domain controllers, dhcp etc will be very happy on a PIII, and these are dirt cheap second hand. Remember, costs savings here will help your bottom line, which will keep you in business for longer. LocationFlash offices in the heart of town (eg Mayfair) are nice, and you may justify it by thinking that clients will feel more comfortable seeing a company located in these areas. This is rubbish. You can always hire a meeting room. In the 3 years I was at the hedge fund, clients actually came to our office around a dozen times. Hardly worth spending $$k a month for that!Execution / SettlementYou will most likely require more then one broking shop to cover all the different markets. Make sure you negotiate very low commision rates (eg 3bps max for Equities). Use your estimated turnover figures to convince them. Shops like Cantors will fall over themselves to win your business! Consider executing CFDs etc, to avoid stamp duty. Negotiate hard with your settlement agent / prime broker, try and get them to waiver their fees for 6 months whilst you settle in (yes they will do this!).Automation wise, if you implement a FIX interface into your execution system, then it will be compatible with most execution agents. No need to work with a brokers proprietry API.CapitalThere is no such thing as too much, however think in terms of milliions. with 50k, your fixed costs will quickly outstrip any money you make. I would say $5m is a more realistic figure. Give yourself at least a 6 months trial.

Thanks for the input, it is instructive. However, what you are describing is a small hedge fund. My idea was more along the lines of working from home, at first in my spare time, to establish the viability of certain strategies I have about trading. I realize it would make more sense to join a trading desk/hedge fund somewhere, but it seems I have been pegged in the IT hole lately, and due to certain circumstances, I can't just quit and spend a possibly extended period of time looking for a job. I just want to develop something with an eye towards flexibility and scalability, in case my ideas do make sense.

QuoteOriginally posted by: estyberkelydb is useless. I hate it. On the totally FROSS front, what about MySQL and Postgres? Also, if you aren't selling software, DB2 is free for internal use for N users I think, Oracle is free for 'development' use, idk exactly what that means. One has to be careful about using "free as in beer" software which aren't "free as in speech" because the point of the licensing restrictions is to get you "hooked." Once you've built a database infrastructure, it is very, very difficult to switch, and DB2 and Oracle have designed their licenses around getting the user to base their operations on their proprietary systems and then cashing in when the user needs to expand beyond a certain point.

QuoteOriginally posted by: hazeriderThanks for the input, it is instructive. However, what you are describing is a small hedge fund. My idea was more along the lines of working from home, at first in my spare time, to establish the viability of certain strategies I have about trading. One thing that should pleasantly surprise you is the amount of computing power that you have available from a home machine.

QuoteOne thing that should pleasantly surprise you is the amount of computing power that you have available from a home machine.Which is why I got a dual processor, 2 gig machine at home

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