Are you an investor? It can help you make more money

Most of the investors are losing money…
Around 85% of them lose money, 5%-10% are even and 5%-10% making money…

Bad statistics and I believe that many investors are not aware of it…

Investor who is coming to C2 in order to find a strategy, basically is more lucky than most of the other traders… He understand that he needs to be a professional in this field in order to make profits and he is looking after a professional exactly the same way he is looking for a good doctor when he feel pains…

But this is only the first step to achieve the goal…
The second step is to do a money management and risk management for his own funds…

What does it mean?

See few stories here…

From my experience in a year and four months here in C2, I saw many investors who made the wrong decisions one after the other. Even when the investors realized that they had made a mistake, they could not make a new decision that would improve their situation…

Ego and emotions play key roles among many investors and lead them to make erroneous investment decisions and bad timing.

I have gathered here the classic mistakes I have encountered with my investors over the past year.

  1. Wrong allocation of funds - an investor who was subscribed to the VIXTrader Professional and the first and the second trade caused him a loss of 2% - 3%… He decided to cancel the listing due to this small loss because he entered with too much money and could not withstand in a small loss in percentage but maybe in dollars it was significant for him. In a classic way, immediately after canceling, a new high was made…
    After a while he re-registered and again lost immediately a few percent and again canceled and again the strategy reached a new high… :frowning_face:

So what happened here? It turns out that only an investor who carries out risk management for his money and allocates the right amount for him to the strategy, is the one who can persist in it and harvest the fruits that it can give.

  1. Fear of heights - An investor who doubled his money in the past year informed me few weeks ago that he decided to leave because he thinks that after the market falls, the strategy will stop working. Of course, he canceled at the lowest point because of irrational fear…

I do not know if he did the right decision from the performance point of view but I am sure that he did wrong decision according to risk management…

What is the solution? The fear can be irrational, so my advice to an investor suffering from such fear is to reduce the amount of money he invests through the strategy. If the strategy loses money then the investor will lose less and if the strategy will gain then the investor can return later to full investment with more confidence…

  1. Lack of patience - an investor enter to the strategy and discovered that at the end of the month the strategy earned but a competitive strategy gained more…He canceled his registration for my strategy and registered for the other strategy. Immediately after he was registered, he lost almost all of his investment… Investor disappeared…:frowning_face:

The solution in this case, in my opinion, is that the investor should allocate to the strategy an amount that can be treated as long-term savings and compare it to other strategies every six months or more…

I would be happy to see here investors tell us about their experience and the mistakes they made here… Developers may share from their experienced with investors in their strategies…These things can be of great value to most of the subscribers…

it seems to me that money management and risk management are of course the key of any good strategy, but the investor must manage wisely his money as well and invest only those amounts that will allow him to sleep at night comfortably…:slightly_smiling_face:

4 Likes

To be honest I don’t know how many “professionals” exist here on C2. To me it seems like alot of kids and foreigners (or both) that realize if they throw a quick profit up they can make back their subscription fee and a little bit, or a lot more.

Why does it matter if they are foreign?

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I mean I guess it shouldn’t matter if they are “kids” if they trade/invest well.

Thanks for your comment, which seems very appropriate. I would add one more factor to what you well describe: Emotional Control. The behavior you describe is a typical emotional response to an adverse market situation.

The discipline and the control of the emotions are fundamental for the success in the financial investments. Investment strategies can be learned in many places. The techniques of money management and risk management also.

The problem begins when the market gives us the signals contrary to what we expected. Under these conditions, most individual investors lose control and behave as you describe in your post.

People do not change … a person, yes.

I think what you mentioned, @RobertPeterson, is very good. Along the lines of what you said, as a investor on C2 I wouldn’t tie money to any strategy unless I would be okay with not being able to change it for a year. In other words, I need to know that my scaling percent is small enough that one rogue trade leader cannot wipe out my account. Second, this means I need to have enough confidence in the trade leader to trust them over a long term, to me that means they need to have a long track record of being consistent and reasonable. No offense to people who subscribe to strategies younger than a year, but my first thought is “are you out of your mind!” Third, I need to know that the money is not something I need to spend in the next year. Just my two cents.

I think c2 is fine the way it is. Most developers are trading paper money, as an investor its difficult to not be emotional with our real money. Finding the right strategy is just like trading the market our self, emotional trade is always a bad idea. panic out, fear of missing out chase. happens to the best of us. we end up doing the same on with sub or un-sub strategies. “OMG, he just lost me $5000. I’m so done with him!!!”

In regarding staying with the strategy or ride thru the draw down. That is just come from trading experience. I had ride thru 25%-35% draw down before, a few times actually. Because i made my money back, so the next draw down of 50% didn’t really scare me. But you have a lot of beginner traders on c2, they are here looking for the holy grail; 50-100% annually with 10% or less draw down. sorry they dont exist, if they do it wont last more the 2 yrs.

I mean i have 2 of my 7 subscriptions regularly invest in xiv, luckily they didn’t take the hit. So i didnt have any xiv that night. But if they did, i’m NOT gonna blame them for letting it happen. Because things like this happens, black swan event or not. I cant say he was a bad developer for not knowing the next day VIX will spike 150%. i know trading vix is ultra high risk. Not every investor here are ready for that, they want the return from shorting vix, but not wanting or knowing the risk of termination event again, that also from experience. i remember Brexit was a SURE thing pre-vote, every expert said no way it will pass. BOOM, next morning $XIV down 60%. I still survive that draw down, and i learned from it. which now i always reduce scaling during a LARGE macro event, like the 2016 election, North korea, and recent bitcoin frenzy.

For me as an investor, what is not ok is endless martingale or blindly expose me to leverage. I don’t usually end my subscription, but i unsubscribed from Dont Worry recently, not because of the draw down. I had 50% draw down before with Volatilitytrader 2017. a 28% draw down doesn’t scare me, but i wasn’t expect a strategy only invested in ETF w/ only 50% market exposure of my total balance for last 6 months. overnight, he leveraged my account into so many futures, it exposed me to 500% of my account balance. so the whole “don’t worry” part is completely out the window, and that’s the reason i unsubscribed. There are strategies i’m in now, i know i’m always 80-200% leveraged, because i was told by it and i’m ready for it. i wont subscribe to a strategy that been trading 1 future contract last 8 months, and next morning i’m holding 12 futures contracts.

in regarding c2 overall, only thing i would change is the amount of new strategy being created each week and every month. There are so many of them just swinging for the fences first 6 months. If they get lucky they get on the top of the leader board and subscribers starts to rush in. 3 months later it blows up or he take very low risk to prevent draw down, so he can just leech off the monthly fees. C2 need to have some sort of large penalty or restriction for these non TOS strategy to take massive risk to get on the leader board. If they crash & burn early, they just hit reset and do it again. I saw a developer start like 8 new strategies all at the same time. First strategy massive leverage long ES futures, 2nd strategy max leverage short ES futures, 3rd long UVXY, 4th one max leverage short UVXY. he did the same thing on CL_F and YM futures. I bet in a couple weeks, he will have 4 strategies on top 25 list, and show that he out perform every other strategy in Feb. he got nothing to lose, but a few bucks paying new strategy fees to c2. 1 new subscriber would have already made up the fee he paid for all 8 strategies.

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I would really like to see C2 build in a feature that allows a subscriber to prevent the 500% of account usage problem or a stated maximum by the developer that can not be changed without warning.