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Its a new futures system with the same martingale techniques ( averaging down … ) , current max DD is 37.5% . If that’s the current max DD and the markets aren’t that volatile and the system has been running for just a few months , then what the max DD will be in the future ? I would say 75% , always the max DD is yet to come .
Caveat Emptor .
The new one you’re referring to will almost make Texas DD look like a wise sound investment because at least TDD was trading stocks so it was possible to scale it down to a small percentage to reduce overall impact on your account whereas this new one has already been artificially “resized” (take a look at the fractional futures contracts traded in the past) so that 37.5 % historical drawdown that looks like only $20k was actually much, much higher when traded in real life. There is no such thing as fractional futures contracts so when it goes underwater this time it will be an account-crushing massive vortex sucking in huge quantities of cash of anyone unfortunate enough to be trading it with real money. Should be even more spectacular to watch than the last one.
C2 is littered with Martingale strategies for 2 reasons. Firstly, they produce eye-popping win rates and secondly, as long as luck is running the right way and the markets are kind, their performance looks great, until it doesn’t. This translates into subscription fees and ultimately, the demise of those same subscribers’ accounts. Trade them for long enough and the odds of that happening begin to approach certainty.
The odds of account blow up will approach certainty unless, of course, you manage some nifty tricks like convincing the futures exchange to start providing you with fractional contracts. I’m sure most exchanges would be happy to oblige!
What System are you referring to? There is no reference.
If you are going to say a system is a martingale system have the audacity to mention my system, Maximus Decimus. For clarification, the 37.5% drawdown was from one period of bond trades that went a little haywire in the system. Since then, there have been no bond trades as I wasn’t at the time able to scale the trade properly (conform it to prudent risk standards). I should also note that the 37.5% is a bit extreme… as the position was well into the green before it reversed. Yes, I did rescale the system to bring the system back down so it accurately measures my current drawdowns. System trades 25k contracts overnight and some intraday exposure, and I recommend 1 or 2x the amount in the account.
Other than that, I believe the max drawdown is 13% or under 9k and that is provided you got in at the very peak of the system. There are zero characteristics associated with averaging down outside of what system states and or anything associated with martingale. System doesn’t bet any larger than its maximum contract amount. You can say what you want but martingale is to keep betting larger and larger. If sitting through 30 points of S&P losses is your thing on a regular basis to make 10, let that be. I’d rather take several trades or losses then sit through that on a regular basis.
I believe I have been fairly upfront since about mid July about the unclear signals system has been receiving and that recently they have started to improve. Hence why most trades have been shorter than what prior trades were like. This likely will change as signals becoming clearer to the system.
I should note that you and I have different criterias of volatile markets.
If all is as you describe I have one question: Why aren’t you trading your system yourself? If the performance continues as you seem to say it should you will become multimillionaire MUCH quicker than just collecting a few subscriber fees instead of actually trading it 
Bear Earns,
My comments on martingale systems were only intended to be read as general observations on a particular class, or style of system and were in no way intentionally directed toward your system specifically. If readers misinterpreted these comments and associated them with your system, I apologise and reiterate that they were only intended to make readers aware of the inherent risks associated with martingale trading approaches.
As is now reasonably and generally well understood, market price series are leptokurtic, in that they have ‘fat tails’ and higher peaks when compared to normal, Gaussian distributions, have non-stationary measures of central tendency and a tendency toward in-finite variance. Simply, the probabilities of large price movements, up or down, are much higher than would be the case if the markets were, in fact, random processes. It is this feature of their statistical price distributions which presents an often under appreciated level of risk involved with any trading strategy that increases its bet size in the face of losses. The same reasoning applies to trading strategies that move their stop losses further and further away from their entry price as price moves against an open position.
The purpose of my comments were simply to highlight this potential risk that is usually present in trading approaches that exhibit, amongst other things, exceptionally high win rates. I am unfamiliar with your system and am therefore in no position to state whether or not my comments would apply in the case of your trading approach. Readers should note that I am not referring to any system specifically and I apologise again if any reader has associated my comments with yours in particular.
Based on the strategy description and actual trading history on C2 the strategy will scale up to 11 highly correlated futures (ES, YM, NQ) at the same time on a $65k or less account. Now, technically that’s not doubling down forever, which is impossible due to margin limits, but it is equivalent of betting over $1.1 million dollars of US stock futures contracts in one directional trade which is more than enough to take an account of that size to zero in a blink of an eye. That is the reason the manager is not TOS certified, and is instead charging high fees and promoting it heavily in the featured area. MD, like TDD, is a martingale system by any reasonable use of the definition, plain and simple.
Also, the peak auto-trade subscribers coincide with the peak of the equity curve so it’s reasonable to assume that nearly all subscribers are deep underwater while the manager cashes large checks every month without risking anything. Sadly, it’s a common theme with these kinds of systems because the risk is not obvious until it’s too late.
The manager told me he does trade his own money on the system. Of course I have no way of proving that he does but perhaps he will clarify here for all to see?
-RV
The beauty of C2 is that you don’t have to go by what a manager says because it’s all in the track record and in the “Trades Own Account” verification badge for all to see.
Also, in addition to the dangerous martingale style of trading mentioned, this manager does not adhere to what he says he will do. In his description he states:
Max contracts held at any one point in time are as follows
5 ES (S&P E-mini) Contracts (7 including intraday)
3 NQ (Nasdaq E-mini) Contracts
Actual trading record:
On 7/21 he was long 6 NQ, and long 4 NQ
On 7/22 he was long 8 ES
…
The Closed Trades listing is a little misleading as to maximum position size. It a manager trades back and forth without fully closing the position, it will show a higher position count than the actual exposure. For example: long 1-2-1-2-1-2-1-2-1-2-1-0 will show 6 contracts long, rather than 2.
That said, this system seems to be using too much leverage.
True, however, you can drill in to the details to see exactly how many contracts and at what time they were opened and closed and in what order. The results I posted are based on that, not the total contracts on the entire trade. For example, on 7/22 he opened 5 long ES at 10:28, then at 10:29 bought another 3 before closing them at 11:05 for a loss. On 7/21 at 10:52 he bought 4 NQ and at 13:42 bought another 2 for total of 6 (the total contracts shows 7 but only 6 were opened currently, which is still double his promised “max” of 3)
Good point. Over trading or too much leverage usually leads to the demise of any system.
Looks like TSH was right again. Maximus Decimus is shaping up to be a slow motion train wreck as predicted–down over $18k from the peak just when everybody got sucked in by the parabolic equity curve without looking under the hood. ouch! Nice call TSH.
Another major red flag popped up regarding this Maximus Decimus system: Developer has just implemented a 168 hour blackout on the publishing of closed trades. Why any manager would hide their CLOSED day trades for an entire week should be obvious: because they don’t want people to see how how their martingale entries and over leveraging were used in recent trading. The manager has no free trial either so there is no way to experience the trading activity on live data until you’ve already lost $199.
I have always had a 168 hour blackout period and that is nothing new. If you want to see my trades live you can easily subscribe. I also have a 45 day free trial. I don’t believe you can accurately measure a system in a few days.
To clarify my max positions open tend to be 7 contracts. It may vary and there has been a time or two I’ve been at 8 intraday. I consider contracts like Es +Nq+ym+gc etc. So because my max allocation, doesn’t mean I am maxing out my es position, while maxing out the rest. Let me know if that isn’t clear.
Thanks for clarification and it is good to pass along information such as what you shared. Risk and control of it is the best defense.
