Dear Matthew,
Thanks for your email last night.
Actually, to recoup the loss caused purely by the mistake from the C2 auto trading platform is not my top agenda. The big draw down for me is that the incident indeed puts a dent on my faith to totally trust C2’s auto trading platform, which was a big fantasy lead me to fell in love with C2 at the first place. I feel let down by someone I thought I can trust.
I am amazed and equally disappointed that C2 did not send any acknowledgment (or an alert) out to the clients immediately after the incident. If C2 can send the Signal Bounce out, C2 should also be able to send an Alert out in case the order was not placed according to the system vendor’s intention.
Along this whole auto trading operation chain- Gen3 to Broker, C2 should be always in the front line to notify its subscribers in real time, good or bad, AS IT IS. To wait for your clients to initiate the communication after they, themselves, found out abnormality in their trading accounts by contacting both trading desk and the system vendor is really not a proper way to conduct this business. I don’t think any business of trading services could have a successful ending, if they don’t treat their clients’ accounts as their own.
I fully understand and agree your statement that “by signing the auto trading agreement, C2 will not be responsible for any loss from the auto trading for any reason…”. Nevertheless, from my 25 plus years’ investment experiences, I do believe, in someway C2 could still be held liable and facing legal challenges if the loss reaches certain level. Hope all those signatures from C2 auto trading program subscribers will not provide too big cushion for C2 to feel so relaxed.
Finally, for the sake of all your subscribers and your company, I wish all of us could get something good from this to prevent it happening again. Once is too many!
All said, I am still going to hang on with C2 a little bit. Your hard work deserves two life lines for C2.
Good luck and best regard.
Ning,
I missed the thread, what happened?
Jim
Ning,
I have had some similar frustrating experiences. Matthew has said previously that he is working to improve system stability and reliability, and separately emailed me to say that quality assurance work on the beta site will be pushed back to 2013–I’m assuming this is so that he can focus on the fundamental task of ensuring C2 runs smoothly. I, too, have been waiting for C2’s core functions (server stability, timely issuance of signals, accurate statistics) to finally get the attention they need, and Matthew has discussed addressing this recently with a planned hardware upgrade. Hopefully in time C2 will become reliable enough to use on a more hands-off basis. C2 issued a press release last year claiming that it was profitable with revenue in the millions, and trading volume has increased 10-fold since then, so financially speaking, C2 should be secure in the short term. It remains an open question as to whether C2 management can successfully navigate this high-growth period and take autotrading to the next level, or will leave the field open for C2’s competitors to overtake it.
Jim,
The following is what I got from Matthew’s email last night.
"What happened was that the order was sent to your OEC account, and then almost immediately, C2 expired the order because it was outside of silver market hours (or so C2 thought)… and so then we tried to cancel the order in your OEC account… but we could not because you had already been filled.
So C2 AutoSync saw that you had a position that you shouldn’t have (according to the C2 system) and closed your position, fairly soon after opening it."
My major concern is that I should not be kept in the dark during and after all those activities in my account, while C2’s site showed no trade opened after I had received Signal Bounce. If I did not just by a chance look at my account balance from my brokerage account, I would not even know there were trades opened and closed with a loss.
I share your concerns.
The trade signal in question was a signal by Trading Points to go long silver yesterday at 19:00 ET. It would have been very profitable if executed. C2 cancelled it with the remark expired.
I sent Matthew an e-mail and asked for an explanation and what steps have been taken to avoid this in the future. I reminded him about this again today. So far no answer - very frustrating.
BTW, normally I trade this system manually but yesterday I could not be at the computer at certain times so I set it up for auto trading and as a result missed out on a very profitable trade. BTW, I experience C2 failures on other systems lately. Matthew, where are the priorities?
That missed trade at the current silver price of 17.380 for one contract would be worth about $3,600. Doesn’t this hurt, especially since it would have made up for some recent losses of the system.
Hi guys -
Here is what happened.
On Monday night, the system developer for Turning Points issued a day-order trade signal for the electronic silver contract.
As soon as the market opened, the signal was “expired” on the C2 platform because C2 incorrectly determined that the electronic silver contract market hours for Monday evening meant that the market was closed.
So: almost the instant the electronic silver market opened, C2 erroneously expired the signal. Thus no position was ever opened on C2. Thus no profit (and no loss) was recorded on C2. The signal was simply canceled without being executed.
At least one customer, Ning, was filled in his brokerage account at the exact moment the markets opened (obviously in the second or two before the expiration notice was sent by C2 to the broker interface). So C2 AutoSync behaved correctly: it saw that no position existed in the C2 Model Account, and - further - that there was no working signal for silver in the Turning Points system. And so: the erroneous position was flattened in Ning’s account.
The entire chain of this error was caused because an order was cancelled at C2 prematurely. But AutoTrading itself behaved correctly: it didn’t see any valid signals or positions at C2 and so it made sure no brokerage account held any position. At least that part functioned as designed.
Where things failed was that C2 had incorrect market hours for a futures contract. While it’s reasonable to say, “I missed out on a very profitable trade,” and in some sense that’s very true, it’s equally important to note that from the perspective of the C2 system (whose performance AutoTrading is trying to replicate) there was no profitable trade. No trade was made at C2 because the trade was canceled at C2 before it could be filled. This was a problem, surely, and one that needs to be addressed, but it’s not a problem with AutoTrading. It’s a problem with clocks and market hours and futures contracts.
As far as Ning’s post (above) goes, unlike Ning I have a policy not to quote on public forums any private emails I receive. I will say only that Ning requested to be paid for the fact that he opened and closed a position in silver, at a net loss. As a matter of policy, we can’t offer such compensation.
I’m sorry that C2 canceled this signal erroneously, but that is what happened, and we will try to investigate the underlying cause and fix it as quickly as possible.
Matthew
Jeffrey -
You wrote me a deadpan and funny email in which you reported a bug and suggested that I look into it "when [I] begin the QA process on the beta site."
That was obviously a jab, well done and well taken, for which I issued what I hoped was an equally humorous reply: that I was thankful for the bug report, and that I hoped to begin looking into it when QA work on the site begins in the year 2013.
Now, it’s clearly a warning sign when you need to explain your sense of humor to other people (and it probably means you don’t have one), but – Jeffrey – I’m sure you know my email response was a tongue-in-cheek joke, right?
Matthew,
My mistake–I’m notoriously bad at interpreting dry humor of the written kind. In any case, I am slowly starting to increase my allocation to C2, but am not at the point of evangelizing it to my friends and family. All of my “jabs,” so to speak, are in an effort to help improve C2 so that I can start recommending it, no matter how rancorous things may seem on the surface.
Two thoughts on the above:
1) C2 is pretty unique in the functionality it has - allowing vendors to put up systems, trading pretty much stocks, futures, forex, options, with robust statistics.
There are a few “competitors” of which I know (do not contact me for them, this is C2’s website). And no one offers this kind of combination.
2) Lights-out autotrading, where you just accept vendor trades and expect to bank profits, with little monitoring on your own is not really a good idea for most, especially for newbies. I think autotrading is more of - let it make the rapid moves and deal with the position changes, but keep your eye on it every 30 minutes or so to ensure it is what you expect. ESPECIALLY do not do this with heavy leverage; or you may learn one nasty day that EVERY trader and EVERY system has a “risk of ruin.” I have seen too many vendors blow months worth if profit in a few days or less.
I understand what you’re trying to say, but who is to say the competitors won’t eventually catch up? No one can stay still in the world of business, especially not finance. C2 didn’t exist yesterday, and has some solid strengths today, but who is to say what will happen tomorrow? And now there are some competitors who have options available that C2 does not have. No need to ask you, Google will reveal all.
As far as “lights-out autotrading,” as you put it, I’m not sure why you keep injecting this issue into every subject. The question is not whether an individual system will succeed or needs to be monitored; this can be appropriately addressed with money management (allocation sizing) and diversification. The question is whether C2 itself will succeed–if it does not, then no matter what risk management steps one takes, no matter how well diversified one is, if one is trading money through C2, then one’s money is at risk. Would you trade through a broker that inappropriately closes out your trades or whose servers periodically crash? It is this systemic risk which we are trying to minimize. All of the stats and graphs and even a system’s edge mean nothing if the trading functionality is not working properly (or to be hyper-correct, per Matthew’s post, working precisely but not accurately), or the servers crash.
We are more tolerant of these risks with C2 because it is still fairly new, but don’t discount how much trust we are putting in C2 when we autotrade with Gen3. C2 has total control over our brokerage accounts, and when we subscribe, we are paying not just for the vendor’s signals, but also paying C2 to execute those signals faithfully. Why is it still a matter of debate as to whether or not that is a reasonable expectation? Am I really in the minority in that regard?
Matthew,
To accurately answer Jim’s question: “What happened”, I copied EXACTLY your explanation from your email. My intention was to avoid adding any word of mine onto yours. If my action violated your sense of privacy, please accept my sincere apology.
Though most our communications have done through so called “Private Emails”, I still consider them as a Trading-Related Open Discussions. If some of the contents could benefit our trading community and C2, it might no be a bad thing to quote the original onto the public forum. You have my permit to quote all or part of our conversations from now on, and you should rethink your policy too.
As a none native English writer, I don’t know how to decor a sentence as a fiction writer or to win a game of trivia as an Ivy league graduate, but I do know how to state a fact as honest as I can. So let me rewrite a sentence from you post above:
You wrote: "…I will say only that Ning requested to be paid for the fact that he opened and closed a position in silver, at a net loss. As a matter of policy, we can’t offer such compensation."
The sentence should go like this: "… I will say only that Ning requested to be paid for the fact that C2 erroneously opened and closed a position in silver, at a net loss without Ning’s awareness. Why didn’t we send any thing to alert Ning about this error made by us? We don’t have any explanation. Do we notice, in stead of a net loss, the potential huge profits loss on that silver trade from Ning’s multiple contracts entry? We don’t care, as long as C2 did not lose a penny, thanks to Ning’s signature on our agreement. "
Matthew, I am not sure I love C2 as much as you do, but I really hope this baby could grow into a healthy adult. If one day C2 becomes a public traded company, I will rush to get my shares for sure. There is an old saying: “The sharpest knife needs to be hammered more.” The more we picked on C2, the better it will be.
Ning
Very well said, Jeffrey. I am 100% with you.
I also had a net loss on that (non-)trade. I don’t expect to receive compensation from C2, but I do agree with previous comments that rock-solid autotrading should be the absolute top priority. Fancy drag-and-drop charts are nice, but the basics come first. Everything should be quadruple-redundant fail-safe when it comes to autotrading. And security features like site-wide SSL too, possibly with some extra layer like a security device for vendors with over X subscribers, or something along those lines.
"who is to say the competitors won’t eventually catch up? No one can stay still in the world of business, especially not finance. C2 didn’t exist yesterday, and has some solid strengths today, but who is to say what will happen tomorrow?"
The current attempt aside, C2 has also introduced new features along the way. I have surveyed most of the “competition” and they are still far behind in several ways. The biggest danger might be if a large company (such as an InteractiveBrokers) decides to get into this space and invest significant resources into it.
"As far as “lights-out autotrading,” as you put it, I’m not sure why you keep injecting this issue into every subject. The question is not whether an individual system will succeed or needs to be monitored; this can be appropriately addressed with money management (allocation sizing) and diversification. "
Obviously I don’t inject lights-outautotrading into every subject, so stop trying to be melodramatic. I said it several times, as autotraders keep bringing up various kinds of autotrading blunders and unexpected results. Letting such things sit for hours or days is how some traders will learn about “Risk of Ruin.” It is not like this place is Goldman, with large staff and highly evolved trading mechanisms.
Thinking that diversification and money management will solve autotrading problems is off base. Some of us have been here for 2-3 years. Some systems have imploded suddenly based on sudden movements - manual or autotraders have been hammered. The difference is, that those who keep thier eye on it can take action; Money Management and Diversification do not replace this or guarantee against failure.
And we are not just talking about Gen3. A number of people have a lengthy path from vendor/C2 via the internet into TradeBullet/T68 on their PC back out through the internet to their broker to the exchange, with confirmation through the broker, over the internet, etc. etc.
There were complaints on T68, within the last week or two.
Index, how many accounts do you have here, anyway?
The biggest danger might be if a large company (such as an InteractiveBrokers) decides to get into this space and invest significant resources into it.
A real possibility, to be sure. Many brokers have had autotrade technology for years, but C2’s advantage here is its willingness to verify the statistics, which the brokers have been unwilling to do.
Obviously I don’t inject lights-outautotrading into every subject, so stop trying to be melodramatic. I said it several times
Perhaps I slightly exaggerated, but this is a well-known literary device to communicate an idea. That idea is that you are monomaniacal about flogging the prediction that 99% of systems will fail. See what I did there? Another exaggeration for effect.
Thinking that diversification and money management will solve autotrading problems is off base. Some of us have been here for 2-3 years. Some systems have imploded suddenly based on sudden movements - manual or autotraders have been hammered. The difference is, that those who keep thier eye on it can take action; Money Management and Diversification do not replace this or guarantee against failure.
Please re-read what I wrote. Diversification and money management are not meant to solve the autotrading problems. This whole thread is about how those cannot solve autotrading problems–only C2 can solve the autotrading problems. Diversification and money management are meant to mitigate disaster, not provide a guarantee against it. If you are so obsessed with a system’s failure that you must monitor it constantly throughout the day, you are not executing the principles of money management and diversification properly. A system should be traded like a stock in a portfolio; if it is instantaneously annihilated, it should hurt a bit, but not cripple one’s ability to trade. It sounds like you are allocating too much of your trading capital to C2, let alone individual systems.
On a side note, many of us who autotrade have day jobs and are not professional traders, and thus don’t have the capability to monitor the systems throughout the day. We compensate by choosing to trade slower systems. I think you’re taking a certain elitist attitude that isn’t warranted. Believe it or not, most users on this site can take care of themselves and don’t need you to stand between them and the abyss. You know how you can add value? Instead of proclaiming the death of most systems, you can apply your keen intellect to recommending those systems which you feel are the best. I’m sure there are those who would appreciate your input.
And we are not just talking about Gen3.
The title of this thread is “Auto-trading Gen3 to Broker.”
Dear Matthew,
Thank you so much for letting me know the possible cause for the problem in Monday night’s silver trade.
Also, deeply appreciated the tireless efforts made by Matt and his detailed explanations on the root of overriding original order price problem. Great job!
Ning
