I started doing it about 2 yrs ago. I sat down with a group, and we talked about what I was doing. After they understood, they decided that I was a kind of momentum investor, but a conservative one. I worked out a deal with them whereby I notify them of a trade I propose to make, and they decide whether or not to make their own trade based on their degree of trust in my "momentum" call, since they have their own ideas about my consistency of exiting my positions. In exchange, I can contractually sell them my position before I trade it, and the margin to which I am exposed is discounted by a proprietary factor that is determined in part by their decision to make their own trade.
It's a bit complicated. They do riskier things than I do, and use my positions as an "intuition factor" in their algorithm, which is the thing that they were missing. It turns out that for some reason I am right much of the time, and that they can make money based on my feelings--a lot more money than I am comfortable with making (i.e. more risk than I am comfortable taking).
No, I neither want, nor need, to work for them. I prefer to remain at arm's length, independent, trading using my own money, in my own way. I do make concessions, for instance recently trying out DDM and its companion DXD. We used SSO for a while a year ago, to good effect especially for me personally, however the market has apparently shifted such that they believe that DDM may serve their needs better. I'm fine with it, for the moment--but like I said, I will likely stop using it fairly soon.
So I have a margin safety net of sorts, that has come in handy twice with DDM. I am aware of this factor, but I never consciously consider it.
I may soon use some individual stocks for this again, that have much less margin and way bigger volume than DDM. I will post if I do.
These guys do a lot of number-crunching. I was told flat-out by them that the way I do things, I will make a bit of money and probably beat the market, but never make a lot of money. They were shocked when I said I was pleased to hear it, as that was exactly the result that I was aiming for, but they were happy because they could rely on my consistency.
I consider it to amount to the same or slightly better result as going long, but with more maneuverability and control. This year I'm doing much better than others, but that will of course probably even out by year's end.
Like I said before, this is not for everyone, it's a pain in the butt, and it takes some capital. But I'm the kind of person who NEVER drives on cruise control, I just don't trust things that much. Plus, there are good deals on trading fees now if you don't trade insanely often.
I'm still looking forward to a potential forex play.