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Another solid month in the books -- keeping to that 5%-10% per month goal

I am pleased with the performance so far and I believe it has been within my expectations. Total P/L on the strategy is now ~20%, or $50k of profits (I trade my own system, 100% scaled). I have increased the subscription fee to $279/mo. If one scaled at 10% on $50k, assuming my general long term monthly performance expectation of 5% to 10%, that is still $2,500 to $5,000 per month, which easily covers the subscription fee.

Have a good weekend all and to a prosperus August!

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It should be mentioned that only auto traders who scaled at 100% (none presently does) could have received the same results because some of the most profitable trades were done in e-minis and not micro contracts. Had he used micros even subscribers who scaled at 10% (the majority) would have received the same results. I hope he will use micros from now on if he trades futures indices.

Hi Karl,

Yes we have discussed this and at the moment I plan to continue to use e minis instead of micros. I have however started to use ETFs for index exposure in this account instead of futures so that followers are able to participate in the trade even as recently as today with the QQQ/IWM pair trade (bet on large cap growth outperforming smid cap names).

Yes, but this type of trading uses a lot of margin. I auto trade at 10% and had I only allocated 10% of your current balance (about 30K) I would have gotten a margin call, the required margin was way over 30K. I think it would be better if you traded in micro futures rather than huge amounts of QQQ or similar ETFs. If you continue trading this way I would have to stop trading your system (even though I got grandfathered into your original subscription fee) simply because it is not economical in relation to the required margin.

Fortunately there are now a few good systems which trade in micros and I hope more of them will come online, it makes it so much easier for subscribers to scale to their preferences.

Since the trade leader does bring up 10% scaling in the strategy description then all trades should be accommodating that. Trading 10 micro ES for every mini ES. It looks like everything else is fine. I would be adding micro VIX to one of my strategies, but C2 doesn’t offer it. Carrying a full VIX contract wouldn’t work for many of my subs because of the size and capital requirements.

Right, so from my perspective, to do 10 micros instead of 1 Mini is roughly $40 round trip per trade compared to $4 through interactive brokers. This would add up to probably $3,000+ a month in extra comission for me (ToS), which is currently less than I am compensated on this site. Should that materially change, I am definitely open to using micros, otherwise I will plan to use ETFs and the mini to maximize P/L. My objective is to make the strongest risk adjusted return I can, which I would imagine is most people’s objective too, so I am cognizant of paying extra comission when it is not in my benefit to do so.

It would be fair to your perspective subscribers to set a higher recommended capital amount to carry all of your positions. Otherwise your gains from your trade size wouldn’t reflect what your subs would get at a smaller scale since they can’t open all the positions. It’s kind of false advertising IMO. Maybe you should recommend 25% or greater scaling.

When I bought one MNQ at the opening this morning the commission at IB was $0.52, so that would make $10.40 for a round trip of ten micros.

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I just checked as well. MNQ was $0.52 vs NQ $2.10, so it’d cost $3.10 more per contract of NQ, or 150% more in commission.

Looking at my account that trades futures assuming this ratio, my commission on just today would have been $93 more. Assume I do that even half of trading days per month, that’s $930 in commission.

Re the other point yes I will change the description to recommend more minimum capital, I originally estimated 30-40k but 50-60 is likely needed to avoid margin issues unless you have portfolio margin access.

@The-Tendie-Man last week it looks like your strategy had about a 20% drawdown within a week where the market had a 2% drawdown. First is that accurate? Second, was this level of volatility anticipated and a necessary part of your strategy or was that outside of your expectations?

Hey, technically it is accurate but that is because C2 doesnt track future options. I didnt realize this at the time. The account should be up 40% or so now actually if the future options I purchased were correctly accounted for. Unfortunately they were not.

The level of volatility was within my expected range, although that instance was at the high end of it.

So all in all I should be up about $99k against the $250k model portfolio, or ~40%.

Going forward I wont be using future options in the account as subscribers arent able to replicate it. I didnt realize this until after the trades were closed.

Oh interesting! Do you have an account statement that would show that or a portfolio analyst statement that would from IB?

See here

https://imgur.com/a/thQhGNZ

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Since C2 doesn’t do futures options are you planning to just run the strategy in a way that doesn’t need them or do some other work around like ETF option?

Yes it’d just be using the ETF equivalent

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