This seems to be one of the highest performing stock systems on Collective2, with a #2 rank. This system seems to have performed just amazingly since it’s inception in March. Looking at the AUM, it seems there are 82 users who are auto-trading this strategy. I’ve been considering subscribing. However, I have subscribed to systems which look good at the start then completely blow up after some time. The system creator has mentioned that there might be significant drawdowns to the system, anywhere from 20-50%. That is why I am hesitant. Does anyone have any thoughts on this?
In the description it says:
$10k+ recommended, but minimum of $5k+ is ok to start.
With a strategy that has huge P/L swings you might want to use a smaller portion of you capital so you don’t freak out with a large draw down. If you have $10K maybe scale this to $6K and see what happens after a year. Let’s say you increased your account substantially and now it is up to $22K. Now rescale it to 60% again and dedicate $13,200 for the next year. This way you don’t blow out your account. QuantTiger suggests autotrading this and letting the AI do it’s thing. Also who knows what this strategy will do in a flat year. I could see investors subscribing to multiple strategies on here to diversify and not rely on just one. I am not a subscriber and good luck.
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@QuantTiger has been doing amazing work. I don’t personally subscribe but have been considering it. So far I have never AutoTraded a strategy other than my own, but have considered diversifying with a bit of my money.
At first my biggest concern was that AI TQQQ was just doing well because TQQQ was doing well. That concern has partially gone away since in the last few months QuantTiger has handily beat not just the market but TQQQ. For example, since the IRA compatible version started it has beat TQQQ. See the two charts below for reference.
I am actually considering subscribing to AI IRA Compatible since it appears to have more consistent capital requirements and could be autotraded in an IRA where my broker would prevent excess margin use suddenly occurring etc. No offense to @QuantTiger, but without using an IRA how can I guarantee another trade leader can’t suddenly use too much leverage and do what happened in the thread I posted the other day.
Part of me wants to see it subjected to more difficult market periods before I subscribe, but since I have some extra funds at the moment I may give it a go before that.
I hope you find the charts helpful.
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The strategy is definitely posting some really good results and risk is fairly well managed (no random leverage spikes that are a resultant of martingale positioning). If the drawdown is the concern, you could always have more cash to back the account. The strategy started right after the March crash which resulted in it never being tested then. It has managed to be fairly consistent and is a good strategy for bull market conditions. The only cause for concern is how it handled September-October but in the strategy’s defense, those market conditions were not entirely normal even for a sell-off. Since it is not tested in bear market conditions or strong drawdowns, I would personally just allocate high-risk capital that wouldn’t cause me any trouble if I lost it. I have not looked through the individual positions to see how they play out or anything like that, only a surface-level look which means I could be missing glaring issues of course.
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In my IRA account I have 25% TQQQ, 25% SPXL, 25% options, and 25+% cash. If you want TQQQ just wait until there is a 10% sell off in the Nasdaq and it should touch the 100 DMA. Load some TQQQ for a 30% haircut. I sold off 30% profits on this last rally and kept my core capital. Sold 20% profits of SPXL and kept core capital. Rinse and repeat. I just opened this second IRA account 2 months ago which was perfect timing and now it is up 25%.
That seems like a good idea and I may do just that. I agree, diversification is a nice way to reduce risk. Thanks
Yes, that was my concern as well, since TQQQ has been progressively going up since March any strategy that traded TQQQ is going to do well. But it seems there was a somewhat significant drawdown in TQQQ in September, and this strategy handled it pretty well. BTW, thanks for Charts @InteractiveAssets.
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@ABBots good points.
They are on our watchlist. They are one of only three portfolios on C2 that we at Put - Equity - Call consider competition.
This system was started right after the crash of Feb-March and has lost more than made on combined Sqqq plays. Buy n Hold outperformed it & add in the 1200 sub fees. Just facts. I foresee this coming back to earth in a couple months.
There is only one strategy on C2 that have 100+% compounded annual return for more than a year. All of those large gains were in the first year and each year afterwards was nothing to write home about. Also it comes with a 80% drawdown yikes! C2 doesn’t have futures options so it is highly unlikely to continuously achieve exceptional returns. Good luck when there is a flat year.
Well it seems like C2 is going through a little evolution from ultra conservative drawdowns to those looking for outsized gains. Consecutive 100% years with dd. under 40% is achievable imo. I know on paper I can do it, I’m just gonna have to walk the walk.
I wish you the best with that. I know real money account fills aren’t going to be the same as paper fills. If someone can allocate a slice of their account to high risk and take those draw downs then it may be worth it to them. Diversification is the key with that.
