I’ve been a member here for over a year now, and while I’ve watched some strategies make money for a few months, it’s always followed by substantial losses. Are all the decent subscriptions private or is this just not a sustainable model? I guess great traders and programers aren’t interested in selling their signals for a few bucks?
I am of the belief that no trading strategy C2 or elsewhere is going to be profitable each year. At C2 many subs want to find a unicorn but they don’t exist. Instead I think investors need to just accept this reality then not return chase. Instead find strategies you can stick with C2 or otherwise.
Well, here’s a list of strategies that have been tracked on C2 for a very long time:
One potential retort to the Old Timers List is to say: “Well, you need to try to identify the strategies before they appear on this list!”
In some sense this is true (and this indeed is the crux of the problem in all of finance – not just C2 – how to know who is good before they are provably good?) …
But in another sense, is that really true? I mean, do you really need to predict who’s going to appear on the Old Timer List before they appear? Maybe it’s good enough to know who is on the Old Timer List now?
There’s a reasonable case to be made that since objects in motion tend to stay in motion, and objects at rest tend to stay at rest, maybe (?) - strategies on the Old Timers List tend to stay on the Old Timers list?
That’s a reasonable school of thought, in any case.
Not sure I personally subscribe to it. (I personally lean toward the belief that strategies can be good for a while, but they inevitably tend to degrade over time as the markets “discover” whatever the strategy knows.)
But there are different reasonable views once can have.
Having an unprofitable month or two is one thing, performing well for a few months and then having a drawdown that wipes away months of profits and more or less disappearing… or worse creating a new profile and doing it again.
InteractiveAssets… I do not think it is unreasonable for a trader or system to turn a profit each year. I’m honestly a bit speechless on your comment that we should expect to lose money year over year. Anyone can do that, why pay extra for it?
Matthew, I agree on focusing on old-timers. The trouble with that is finding one that is still public or for someone who has not moved. I’ve simulated so many with so much promise but most seem to fit the same profile of consistent wins, smaller losses, until the big one. I get discouraged when I find older great strategies that are no longer accepting subscribers, but it seems those are the only worth following. You do have to take a chance on finding the next real deal, I suppose.
Hey that is perfectly fine to see it differently. That is what makes a market after all. I’ll try to expound on my view in hopes it helps, but if you still disagree - no harm no foul.
I don’t think we should expect to lose money every year but certainly need to be ready to lose money for a year or several in a row depending on the aggressiveness of the investment styles you pick
When you look at the pros such as Warren Buffett, Peter Lynch, Joel Greenblatt etc. they do not make money every year. Even when they managing smaller accounts they don’t make money every year.
I’m of the opinion that it just isn’t realistic to make money every single year. How many strategies that are old have made money every single 12 month period? I just went to the old-timer leaderboards and sorted by age. I then clicked through each strategy that was 5 years or older. There were zero strategies that didn’t have at least one calendar year with a net loss. That was out of 19 strategies that survived to make it to the leaderboard and the thousands that failed likely had a losing year or two also.
So one may come to the conclusion that C2 is “bad” but I think that isn’t true and the wrong lesson. C2 is great. But investors need to have realistic expectations and control their behavior. You could go with balanced mutual funds and index funds instead - not a bad choice. But you will still have entire years of losses.
There is however one way to essentially never have a losing year. That is to invest extremely conservatively. For example, you could just leave funds in savings accounts or buy ultra conservative cash equivalents in places where you earn interest or dividends. By doing this you are unlikely to ever “have a loss” for a year. However, you will lose real purchasing power nearly every year due to inflation.
PS: I believe the book Little Book of Common Sense Investing by John C. Bogle is perhaps the clearest explanation I have seen of the uphill battle that "beating the market” is.
Respectfully, I’ve never had a red month in my own trading or investing. I’m not able to trade every day, but keeping wins bigger and more frequent than losses is basic trading that is rare here unless I’m missing some unicorns hidden somewhere. Still amazed if it is readily accepted here. I considered C2 a way to diversify into other markets than the ones I trade, but it’s been a year and not a single strategy has turned a profit. Not one. The more I look, the more blown strategies I find. Many hidden. I think managers and C2 for that matter really need to look at it from the investor’s perspective. I don’t feel that anyone is. It’s all about getting subs. Perhaps I’m not the target audience and my standards are too high for a marketplace setting if month-over-month profits are a maybe, but I’d certainly rather have quick simple, smaller, consistent trades than the complex drawn-out martingaling and bag holding to keep C2 stats pretty as long as possible… until they can’t. The information provided to investors is often misleading and it takes a great deal of looking through months of data manually to see the degeneracy. The money here is definitely in selling strategies over healthy investment habits from either investors or managers. No one listens to investors at all. There are so many threads spelling out what we want and it’s always “well the market is hard and risky and is in tough conditions right now”. That’s the market always.
If you have been trading for a long time and have never had a red month (with reasonable levels of risk) I beg you to create a strategy here. I and others would certainly want to subscribe to you if you can deliver on that. You essentially would be the unicorn here.
I’m currently sending trades (via a bot connected to Interactive Brokers) to a signal group I run with a few other day traders and was intrigued by C2 to offer auto trading. I was referred to C2 by another signaler who ended up blowing multiple strategies here (and hid it), so that wasn’t a great introduction either. We do not want my group getting all of the emails suggesting strategies run by people who have not been vetted at all and are crashing people’s accounts. There are lots of discussions here on investors needing to see more information, it’s a complaint investors have had for years that has not been addressed. My partners and I are planning on offering auto trading for our signals next year (we are swapping our own signals now using a custom bot), but are in talks with a developer for something more tailored to what we are doing with our group (and as a bonus, it will cost less to our customers and we will keep more). How can I recommend C2 to anyone to follow my signals when I see so many issues here and a lack of listening to investors? This is an awesome concept here and they’ve had such a huge head-start on the competition, but the standards here leave a bit to be desired. This is an extremely high risk investment environment as it is currently set up. Its not like I gave a couple strategies here a couple weeks… I gave many strategies many months and not a one could protect its profits. That’s a core responsibility of a trader, especially one managing money for others. Maybe it’s because I have a group and a chatroom so I can really see this every day, but these aren’t just accounts you’re dealing in. It’s peoples’ lives and hard-earned money and they are trusting C2 and strategy managers to do what they say they are going to do in descriptions and statistics… but don’t even get me started on how I’ve seen the statistics manipulated by managers who know how. It’s simply much too hard to see that so many are going through 10k drawdown for $100… which works until it really, really doesn’t. With firm rules and discipline, it’s not hard to avoid drawdown on the week and month. It’s when traders get tilted or algos have holes in them… which should not be happening when other peoples’ money is involved. I was honestly hoping there was some secret stash of good strategies on here, but this discussion has shown me otherwise. Unfortunately, this opportunity was not what I was hoping, but now we know! So I do offer signals, but I also care about who I partner with because a lot of newer traders look to me for advice/recommendations. I can’t recommend what I’m currently seeing to people trying to improve their financial situations. That’s what it comes down to at the end of the day.
“Investors need to see more information”
Ok, what specifically? I’m happy to add any stat that can be calculated, and which is possibly helpful. We literally have thousands of stats visible. We run CPUs day and night to keep stats updated. What specifically is missing?
"but don’t even get me started on how I’ve seen the statistics manipulated by managers "
Actually, I’d like to get you started! How does one “manipulate” statistics? People tell me it’s possible, but I can’t figure out how to do it. Please be specific and tell me how stats can be “manipulated?” The obvious thing someone can point to is that some managers leave a losing trade open, and juice their “winning %” Okay, but the losing trade still appears on all the return statistics, and is visually represented on the equity chart. Furthermore, C2 dings strategies that have large losing positions. Or is there some other stat which can be “manipulated” that I am unaware of?
"We do not want my group getting all of the emails suggesting strategies run by people who have not been vetted at all and are crashing people’s accounts. "
Collective2 offers a white-label solution. You can have a C2-ish site up and running in one day, under your own brand, complete with autotrading and compliance, and only your strategies will appear (or those you specifically vet). (Send me an email or just ping firstname.lastname@example.org if you’re legit and interested).
On a more general note, when I read a post like this, I think you are complaining about the finance industry in general. You’re basically saying: some strategies look good for a while, and then sometimes they fail.
Which is true, and lamentable. But is that really a “C2 issue?” Isn’t that the case in all of finance? Hedge funds that charge 2-and-20 blow up all the time. Look at Tiger Global, just to name the most recent example.
We have strategies on this site that have been around for 15 years. Sure they’ve had drawdowns over that time, but they’re generally positive. What stopped you from choosing those strategies?
Collective2 lets individual investors make their own choices. We try to arm people with as much knowledge (stats, track records, etc) as we can possibly provide. If you think we don’t provide enough information, be specific and tell me what’s missing. If you think C2 is somehow misleading, be specific and tell me what to improve. If we’re not providing what you need, be specific and tell me what’s missing.
Listen and listen good , outside of collective2 these sevices and signal providers dont mark to market , and they dont account for drawdowns and open positions losses aka unrealized losses .
So when you hear someone say i never had a red month he means closed positions p&l .
These guys dont believe in intratrade drawdowns .
The moment they join collective2 as a trade leaders they get exposed and all the losses and bad trading behavior start to appear . Thats whats great about collective2 , transparency.
Well, I would like to see that strategy running on C2.
After a few months of simulation we can decide ourselves if it’s worthwhile following it or not.
(And if if there are really unrealized losses or not)
I have to agree to that… there are way too many bad traders on Collective2.
Disappearing after crashing and re-incarnating with a new profile.
I’ve been simulating as well about 10-20 new strategies every month.
That would be more than 700-800 strategies in the last few years… all of them failed.
There are just a handful of oldtimer strategies that still perform well after a few years…
But then again… I had better performance just buying and holding Berkshire Hathaway.
If you have a strategy with a good long-term performance and low drawdown…
You are very welcome to start this strategy on Collective2.
I find it so surprising that someone that says they are making money every single month trading would spend a year at C2 looking for ways to diversify. Goodbye you unicorn!
Not surprising at all. Talk is cheap and easy, real trading is not. It is very difficult to be a good trader on collective2 (or anywhere for that matter) because C2 exposes you with your verifiable track record. That is why all those signal providers who are ‘great traders’ making millions on emails, telegram, instagram and what not, fail miserable the moment they bring their ‘expertise’ on c2.
A few months isn’t statistically significant. There all loads of new strategies doing different things, so some of them just by chance ( dumb luck ) will perform well for a few months.
Then to evaluate systems, you can’t just look at consistent returns and max drawdown. Some systems have hidden risks like high leverage and adding to losing positions or selling options for a very high notional amount.
If a system is taking high leverage or selling options for big amounts then the system can suddenly crash at anytime even with month or years of good returns and low max drawdown.
Some example are futures and FX based systems that can use very high leverage,. It’s ironic that most of the C2 Star systems are futures trading systems!
And then when you sub to a system, then it’s not a good idea to quit if the results and trading are within the normal historical ranges of the system. For example you sub to a system with max 25% drawdown and then you quit after 15% drawdown. That’s probably the point when the system just had a blip and is about to turn back around!
Use a few systems together that are uncorrelated, that are 2 years plus old, max drawdowns below 35-40%, don’t use high leverage (max 4-5x leverage ) and are not futures based. Hold for min 2 years or until a max drawdown exceeds 40% or a sudden 30% drawdown ( system falls 30% plus within a few days ) then there is a good chance of positive return across your subbed systems ( aggregate return for all the systems subbed to ).
Unfortunately, some systems and/or markets can stay “uncorrelated” or correlated for a long time until they all crash at the same time, in a big way.
10-year US Treasury yield versus US stock market
Crude Oil/ Australian dollar
Crude Oil/ Canadian dollar
NOK/USD versus oil price
Look at the 2008 crash for example. all the so called “uncorrelated” financial instruments came down hard (including the “safe” real estate and insurance sectors), and investors lost billions of dollars.
Now, if the trader uses two different strategies at the same time, on different time frames (say a trend and a counter-trend approach) then yes, now we are talking about uncorrelated systems.
Put together, these type of (technically) uncorerraled trading systems reduce the drawdown and produce a smoother equity curve,
The trick is to find them of course, on Collective2 or elsewhere.
You are talking about uncorrelated assets becoming correlated at some periods of time. A lot of systems go in to cash positions often, so there isn’t the same problem. The uncorrelated systems part was only one thing of a few things that I said a sub should look for.
In theory this is a good idea, trading uncorrelated systems reduces risk.
In practice it is almost impossible to determine if System A and System B are uncorrelated, even if they are both uncorrelated to the S&P 500, or trade uncorrelated assets (bonds, real estate, gold, etc…)
It doesn’t have to be a perfect uncorrelation if all the strategies you trade are good. As in they are profitable for majority of the months and on yearly basis are almost always profitable.
You should want that if a system has it’s max drawdown (30-40% drawdown ) then you don’t want it that all your systems have this max drawdown at the same time.
If the strategies aren’t correlated with the market and are all good strategies then it’s extremely unlikely that they will all have 30-40% max drawdowns at the same time ( especially if you have already eliminated super high leverage systems and systems that add to losing positions )
I’ve been on C2 for many years and in profit, so I’m just saying what works.
And a system that is good for 6-8 months or even a year, is not necessarily a good system.