I’d be 4) lost money and stayed. I subscribed to my first system on 7/31/05 so will have 5 months under the belt at the end of Dec. I have learned a lot about what type/style of system I am confortable with (market orders only, trades about 1-2 times/day, stocks, futures or forex), and not (tight limit orders, options), but have yet to find one with these characteristics that has made money once I subscribed. If I could find a system that averaged 25-30%/year in a real account (ie. real trades, not C2’s hypothetical best case) with low drawdowns I’d be thrilled.
How much you are willing to pay such a system, if I may ask?
That’s a tough one because most of the money I have lost so far is from systems I subscribed to that had great equity curves and numbers (high W/L, etc.), and within a few days of subscribing ran into trouble (for two recent examples, TPS Daytrade Emini Russell and Options in the Green … I subscribed to each of them at exactly the peak in their C2 equity curves, but both looked good prior to that). Extreme-os is another system that looked perfect to me and I didn’t lose money trading that one using ITM signals, but didn’t make any money either (flat after about 45 trades). May be worth a try autotrading though.
So the reason your question is hard to answer is because “past performance is no guarantee of future results.” There are plenty of energy and real estate focused mutual funds who have returned 25-30% each year for the past 3-5 years but I didn’t get in on any of them prior to the run. From my C2 experience so far it would require some sort of payment based on performance to fork out more than the typical C2 system price (eg. $50-250/month) for any system simply because there isn’t enough history here to determine the robustness and longevity of a system over time.
C2 needs to offer a pay-for-performance option like real hedge funds do, the subscriber pays a percentage of net new profits (above the previous highwater market). I bet that would make system owners think twice before letting a drawdown get too serious (because it could be a long time before they ever get back to the point where subscribers have to pay again)
Of course the problem is determining what to account size base the percentage on since everyone has different account sizes.
Agreed. I’d gladly pay a reasonable percentage of net profits at the end of each month if the system had a good enough track record and methodology to give confidence in the long term profit potential (and drawdowns were low). What a “reasonable percentage” is I’m not sure, but there must be some benchmark for this based on, say, a $100K account size.
Stellar idea Pete. Hope the admin takes the ball and runs with it.
Can’t take credit for the idea, I have some money in a hedge fund and that is exactly how it works. The percentage is 20% but of course that’s 20% of my real net profit, not based on a fictious account size or non-reproducible trades.
I have priced my systems ranging from $69/month to $2000/month (max at C2 due to credit card charge limits) according to its performance, calculated based on each systems closed out trades.
This price for each system will be updated (up or down) every time a trade is closed for a particular system (eventhough the position size for a system will be based on its current equity.)
The systems description (short) may give a hint at how this pricing is arrived at. I’m sure many would find this interesting.
Pete,
>C2 needs to offer a pay-for-performance option like real hedge funds do, the subscriber pays a percentage of net new profits (above the previous highwater market).
It really great idea and I think it can be easily adopted in C2. C2 will recommend your payment accordingly percentage that is setted by system vendor and scaling parameter that is setted by subscriber. If you agree with C2 recommendation you’ll be charged automatically if not you can correct your payment accordingly your real account status.
I think the idea is much better that pay-for-performance based on RF (it was my idea).
Eu
This is a good idea and I for one would not mind having my systems setup like that. But… This make sense in theory, but I cannot see how it will be done on C2. It work for Hedge Funds, because you invest a certain amount of money and then you pay a percentage above the new highs for your investment/account. On C2, no one invest a certain amount of money to the vendor. Everyone have their own accounts and C2 don’t know the size of the account. Subscribers are just receiving signals. So there is no way for C2 to determine what your account size is, or what amount to use for the percentage fee.
If the fee is based on the 100K account here on C2, someone who is trading a system with a 10K account will get killed with fees.
Regards
- Fanus
"market orders only, trades about 1-2 times/day, stocks, futures or forex), and not (tight limit orders, options), … that averaged 25-30%/year in a real account … with low drawdowns"
I’ve copied this to my notebook and I’m going to stick it to the christmas tree. An experienced subscriber discribes an ideal system that all vendors need to pay attention to. But the only missing piece is the fee schedule. that’s why I asked. (It becomes an issue, especially for “US person” vendors. They pocket only about 40 cents for each dollar charged).
Thank you for your input Randy. I think 25-30% is resonable, doable. I’ve been reading your posts and feel sorry that trading has not been financially rewarded for you yet. I wish you Merry Christmas and do a lot better next year.
Thank you Watson, and happy holidays to you as well. I’ve been posting dollar amounts instead of percentages, but in total I’m down 24.5% from my starting account for C2 trading since 7/31/05. So I still have a decent amount of ammo left for 2006 to try and turn things around and get into positive territory.
Could not help but to make a comment on what is going on. A veteran of 19 years of trading and running one of the hottest alert room in the world, C2 system is great. Chosing a good system is the problem. There is one indicator that can help all of you to find a good system here. That is Sharpe ratio that is steady and growing. Also how long would it take using 25 % of capital for trades for recovery of drawdown. I am not offering any subscription yet, since not being familiar to C2 caused some drowdown, that was beyond control, and I blame myself for it. A resposible system maker, needs to give it a few months of track record, before allows anyone to subscribe to his or her system and that is something is missing here in C2. There should be a confirmation of the trade only when a system that has gone through the limit not when it touches. Good Luck everyone and happy Holidays.
Fanus,
I cannot see how it will be done on C2. It work for Hedge Funds, because you invest a certain amount of money and then you pay a percentage above the new highs for your investment/account. On C2, no one invest a certain amount of money to the vendor.
Easy. From one side system vendor knows minimum account size for his/her system, trades that are impossible and average amount of profit if there is any. From other side a subscriber doesn’t pay for nothing and if subscriber wishes to pay the payment will be from real profit on his/her account. In the case all payments are based on system profitability in real life for real account.
Something unfair again?
Eu
Eu
You say: "From other side a subscriber doesn’t pay for nothing and if subscriber wishes to pay the payment will be from real profit on his/her account."
But this is the problem. How will C2 know what the subscribers accounts are? The only way to do it is when each subscriber tell C2 what account size they use to trade the system and how much profits they made and then pay the percentage. What prevent anyone from trading a 100K account, but tell C2 that he is trade a 10K account? Will you be willing to open your account so that C2 can connect it to determine your account size? And even if you are, what if you do C2 unrelated trading in the same account as well? And what if you are subscribed to more than one system? Or will a subscriber have to open a seperate brokerage account for each system he subscribe to?
The theory is good, but I just don’t think this is practical to be implemented on C2, unless C2 act like a broker/hedge fund by having someone invested a certain amount of money like with a hedge fund and C2 trade the account for the subscriber.
Regards
- Fanus
Faramarz
You say: "There should be a confirmation of the trade only when a system that has gone through the limit not when it touches."
This is not a well thought out statement. When the market touch a price, it means someone got filled. Following your reasoning, what if this someone is a subscriber to the system on C2? That mean that someone have a fill, but C2 doesn’t show the fill because it didn’t trade through. Since the C2 doesn’t show the fill, the vendor has no reason to continue managng the trade and the subscriber is on its own to manage the trade.
Also, the limitations of sharpe ratio is well documented and many systems which are untradable because of very small profits and unrealistic number of shares/contracts traded have high sharpe ratios. You cannot just look at sharpe ratio and think a high sharpe ratio means a good system. A system making 50% annualized with a 10% drawdown will have a lower sharpe ratio than a system with no losing trades and an annualized 30% return. Which system would you rather trade? The “better” one based on Sharpe Ratio, or the one with higher return and reasonable drawdown?
Regards
- Fanus
Fanus,
>How will C2 know what the subscribers accounts are?
It’s already in place in C2 ;). Scaling configuration as in “Trading Permissions”. Subscriber can configure it for his/her own convenience in billing.
>What prevent anyone from trading a 100K account, but tell C2 that he is trade a 10K account?
Nothing. Have you ever been in casino? 
People who wins usually are more generous lol. Also, I don’t ask to remove all other forms of subscription. Only add one new after that it’s subscriber choice and a system profitability.
>And even if you are, what if you do C2 unrelated trading in the same account as well?
You can be sure, that when we start speaking about real money a person will dig in to account to figure out from where wins/losses come.
>The theory is good, but I just don’t think this is practical to be implemented on C2
It’s freedom of choice. I think it’s practical and if it will be implemented I’ll switch to the model.
Eu
Eu
>How will C2 know what the subscribers accounts are?
It’s already in place in C2 ;). Scaling configuration as in “Trading Permissions”. Subscriber can configure it for his/her own convenience in billing.
- Then a subscriber can scale to the smallest scale possible and enter bigger trades manually when he receive the trade. Also you based this on the assumption that everyone use auto-trading. What about the ones who don’t?
>What prevent anyone from trading a 100K account, but tell C2 that he is trade a 10K account?
Nothing. Have you ever been in casino? People who wins usually are more generous lol. Also, I don’t ask to remove all other forms of subscription. Only add one new after that it’s subscriber choice and a system profitability.
- Then fair billing is not possible, since you expect the subsriber to be honest and accurate about his account size and this is human nature to want to pay as little as possible for something.
>And even if you are, what if you do C2 unrelated trading in the same account as well?
You can be sure, that when we start speaking about real money a person will dig in to account to figure out from where wins/losses come.
- Yes, you as the subscriber can be sure. C2 who is doing the billing cannot be sure and in fact do not even know what the account size is and will have to rely on the subscriber to give it the information so that the subscriber can get billed.
>The theory is good, but I just don’t think this is practical to be implemented on C2
It’s freedom of choice. I think it’s practical and if it will be implemented I’ll switch to the model.
- We will have to agree to disagree. I don’t think this is practical as the whole concept is based on subscribers telling C2 what account sizes they are trading. This is like watching pay per view channels on TV and receiving a bill for it at the end of each month. However the cable company doesn’t check how much you watched, but rely on you to tell them how much they should bill you. I don’t know about any company who rely on customers to tell them how much they should be billed.
Regards
- Fanus
Randy May says:
>I am confortable with (market orders only, trades about 1-2 times/day, stocks, futures or forex), and not (tight limit orders, options),
Those are exactly the characteristics of my system. I trade Dow futures not more than 10 times a month, using only market and stop loss orders. You sound like a bad omen for vendors, but I would be proud to break your string of bad luck.
>If I could find a system that averaged 25-30%/year in a real account (ie. real trades, not C2’s hypothetical best case) with low drawdowns.
I know my system is very new, so maybe that’s why you missed it, but so far my DD is only, well technically there was no real DD and the system’s result is a bit above your desired 30% annual gains. Please come over and take a look. You could put it on your watchlist and hopefully in the near future you will decide, that mine is the perfect system for you. Take care…
Just wanted to let Declan Fallon tht I appreciated his input.
He may be offering a system but I thought his input was honest and useful.
I personally have been trying out CoinCollector and Hawk-fx for about a week only.
Although CoinCollector did well, a large portion of trades were not executed through TB. Don’t know where the fault lies.
Hawk has has a bad time of it this last week but has overall good performance.
I would like TB to be a useable product but am not encouraged so far.
