Can C2 confirm whether its possible to get C2 star-certified if the strat doesnt close EOD? This doesnt appear in any of the formal requirements but I read in some of the other notes that its basically daytrading only for now. If so, can I ask why this is? Generally swing trading and long-term strats are more stable/reliable than day trading (in my experience anyway) so would think this is what C2 is trying to encourage? Looking at the type of strats that are getting certified, its basically one or two individuals with a few strats out of hundreds on the site. Is this really where C2 is going with this? Seems like it might be better if they opened it up to a little more variety (with the same drawdown, deployment restrictions etc) to get more interest. Also the ones that do appear to be certified seem a little sketchy to me. Why do they constantly change the names? Are they trying to hide poor performance, drawdowns etc? I just dont get it. Message to C2: Maybe if you guys got rid of the “guaranteed income” component of this, it would actually work better as it would attract better quality individuals who arent trying to game the system? All you really need to do is allow people with the right strats to get certified (WITHOUT needing to pay another $200 as this makes no sense if you’re actually trying to encourage people to do it in the first place). If people want to trade conservative stable strats (which they should) then they will seek them out so long as they’re differentiated/certified. Tbh this whole thing just reeks of an attempt to get more fees rather than an honest attempt to get a conservative portfolio of strats as Rob professes to do. Sorry but this is just my opinion. Maybe if he makes these changes he may also stop losing his own money (or C2’s money)? Never a particularly good idea. If you want to make more money out of the site, just change the basic fee structure. Be honest about it. People will appreciate it (not the fee hikes but the honesty!)
Daytrading is not a specific requirement of being certified by the C2Star program. Admittedly, though, the program is very restrictive about the amount of drawdown it allows. So, while it is conceivable that a C2Star strategy could hold positions overnight, if it used tight stops; it is more likely that strategies enjoying success in the program will close their positions overnight.
C2Star is still new, and very much still under development. We’re evaluating how it’s working, and it is possible we will expand the program to support a wider variety of trading styles in the future.
Thanks Matt, I hear you but disagree somewhat on the drawdown issue. For example, the swing trade strat i just uploaded has a max drawdown based on back test/walk forward clustering over the last 4 years of less than 3k (based on one lot emini sizing). The question is, do I waste 200 bucks just to find out you dont look favourably on it even though it meets the criteria? How long do you wait to assess the drawdown criteria? Would you award the certificate and then just remove it if the drawdown exceeds the limit? Just not clear how this works. Thx
C2Star criteria are mathematically defined and measured by the software. No human looks at a strategy and decides whether or not to grant certification. If you achieve the results outlined here you will be certified.
Ok thanks for clarifying. One final question. Assume the difference between the maximum open loss requirement and equity drawdown requirement is that the former only applies to REALIZED losses? So this would be realized losses from the last realized peak? Please confirm. Thanks.
I’m pretty sure the risk thresholds are on unrealized and realized losses
You mean both the open loss AND the drawdown restrictions? Not sure how that’s possible as both sets of restrictions are at the same level (5%; $2000) but apply to different time frames (ie drawdown over 24 hours and open loss over the life of the strat). Why have 2 sets of restrictions if they’re at same level?
Isn’t the 24 hour open loss set at $2000 and the maximum total DD at $5000?
No I think the open loss thresholds apply over the life of the strat. Drawdown restrictions are on a rolling 24 hr basis (aside from the 5k threshold you mention which is also over the life of the strat)
The max loss is $2000 over a rolling 24 hour period. The max DD is $5000 from the equity peak. Both realized and unrealized losses are included.
Appreciate the reply (and I hope you’re right) but this is not what it says on the website (https://www.collective2.com/c2star/showRequirements). It clearly sets these requirements side by side and differentiates between open loss (which has no time component) and max equity drawdown (which is on a rolling 24 hr basis). Am I missing something? Thx
I see what you mean. I think the open loss is the max loss in a single position, then the two other DD thresholds (2k over 24 hours and 5k lifetime).
C2 equity includes open and closed positions. Therefore equity drawdown requirement should apply to realized losses and open losses.
Makes sense. So what does “open loss” mean? Assume that’s only realized?
Ok so that’s a max realized loss. I think I’d like someone from C2 to confirm that understanding
No. Realized and unrealized for every risk metric
Ok I think I see what you’re saying Ethos. I think I got confused as my strat only holds one position at a time but I guess others may hold open multiple positions. Would still be grateful if C2 could confirm this is correct. Thanks
Strategy is removed from program permanently when:
“Open Losses” - if your open positions, when added together (whether one or multiple), ever exceed the maximum $2000 loss, this is a violation.
“Equity Drawdown” - First note that, whenever C2 measures equity, it ALWAYS includes both closed positions, and still-open positions (marked-to-market) added together. Using this definition, if your equity (open+closed) ever decreases by $2,000 in a 24-hr rolling period, or if your equity has ever decreased from its peak by more than $5,000 (regardless of time frame), this is considered a violation.
Thanks Matt. Maybe I"m missing something but if you have a 5%/$2000 limit on open losses (ie unrealized losses) why do you then need an additional 5%/$2000 limit on realized and unrealized losses (ie equity drawdown)? To make a realized loss, you will always make an unrealized loss of same amount first so wouldnt the open losses threshold always be triggered first??
Because if you close a losing position after it loses $1950, and then have another loser of $50 (whether open or closed), you will trigger the violation.