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#21

I believe the whole 1% alpha over 60 day rolling should be taken out, or at least not overly punished by throwing a system out (eg., what if I am only 0.5% above in any one 60 day period, which is normal, and balances out over other hopefully more profitable rolling periods).
Needs a lot of thought, I just hope Matthew et al are not launching this too prematurely, or overly-motivated by the additional fee income. It has to be done right.


#22

I don’t disagree. They are hard or to achieve. Perhaps none that have crashed would have ever made it. However, I have seen absolutely beautiful equity charts with very low drawdowns that crash and burn. I highly doubt any of them would have done well on IB’s stress test.

My point is that one of the fundamental problems with C2 is that subs have no guarantee that leaders will stick to their promises such as stop loss on every trade, not using more than X margin, and staying consistent.

At any point your leader can go from trading using 2 times leverage for months or even years then start using 10 times etc. Any normal fund would have an agreement of some type legally preventing certain levels of behavior. I believe C2 should create the capability to limit this behavior or create automatic stop losses on each trade. To be clear this should only be for systems that sign up for this feature.

To further my point here is a screen shot of a strategy I want to use as an example. Now I can’t tell from the screen shot very well what the max drawdown was or the rolling 60 day return. However, I can tell you that the previous drawdowns and the previous returns did nothing to indicate what was coming. A stress test could have and margin limits or stops could have reduced the damage. Instead we have a -433% returns with a 100% max drawdown. I do not see how the current C2Star will prevent a similar situation Again this one probably didn’t pass the criteria because it had say a 10% plus drawdown. My point is that the criteria are completely wrong. It isn’t about are the criteria too tight and should they be changed to 20% drawdown. The criteria are completely wrong in my opinion. They should be about stress test numbers and limits on margin.


#23

Am afraid that this is not even beta, and I was silly to start C2Star.

c2st3


#24

All this happened today, so I wonder how will they ever possibly check that rolling 60 days condition.

EDIT : looks it is fixed now. But people at C2, please make it work. It has big potential.


#25

Lol…thats nice! A warning to the developer of out of control trading! Keep it up!


#26

Would these “amazing” strategies make the cut?



asking for a friend :wink:


#27

Yes there was a brief data feed outage, but it has been corrected. I’m working on making C2Star more supple when things like that happen. Your strategy status has been restored.


#28

i don’t think any of them will survive the 5% drawdown rule. I love the idea of C2STAR program. good option between TOS and the wildwildwest of c2. having rules and some restriction will be nice and give peace of mind to some investors.

I’m very interested to see how many strategy we have that can keep the drawdown low and able to beat SPY. because the drawdown restriction is so low, risk management is going to be the primary focus. if you over leverage you will easily break this drawdown rule.

I don’t like how developer can still go in and out of hiding in private. I still believe that c2 should not allow strategies go back into private once you open to public and have subscribers. I think c2STAR should be the new standard. and if they offer C2STAR also TOS that would be most ideal. But i don’t know how many strategy still remain over a 2yr period, 5% or lower drawdown, beat SPY consistently over 2 month and 12month basis. If they can beat it, i wonder how much gain above SPY. risk and return comes together, you are not going to see a strategy annual return 25%+ per yr with 5% or less drawdown. maybe a 10-12% annual gain is the expectation for c2star.


#29

Yes…with limitations on drawdowns there will be limitations on potential profit but I think thats a good thing since most subs don’t want to be paying for a service they have to babysit everyday.

Also, this differentiates strategies that are in development mode versus strategies that have solid rules.

I would like to know the all the rules for C2STAR certification. Like what happens when a developer gets dropped from the program…will the the developer’s subs also be disconnected right away and will the last trades be closed when the rules get broken?


#30

Nearly no one in c2 is going to subscribe to a 10%-20% annual return strategy, the whole idea of joining the c2star program is to get that $500 monthly income from c2 per month per strategy.

Developers won’t join this program to attract subscribers because subscribers arent attracted to such low return strategies in the first place.


#31

This is a gut feeling I have had for some time. Perhaps C2 know this only too well - which is why it seems they have developed a model which keeps C2Star trade-leaders having to reset/restart their strats which are almost guaranteed to fail within weeks due to the extremely tight rules - controlled by C2!

If I am a fund/family-office managing $10m+ I would be more than happy to pay a % of profits to get a 10%-15% alpha.

If I am a small independent trader paying around $200/mo subscriptions (C2 fees, autotrade fees, strategy fees times 3/4 strats, etc.), then I want to see a much higher return.

I fear C2 know this…

To try and attract monthly-fee subscribers to a model which is better suited to institutional capital cannot work, despite very good intentions. Any efforts will result in streams of frustrated tradeleaders managing, over-managing, and forcing to stay within virtually impossible rules, to the detriment of subscribers, but a steady stream of reset-fees for C2 cash-flows. This whole thing needs a rethink, but it’s on the right track, if only those rules were looked at more closely, and objectively.

I don’t know - hope I am wrong. But that is what my gut tells me.


#32

It will be popular if the maximum risks are increased to 5% per month and 15% per year.

Now it is profitable only for you.


#33

fiveHedged - You’ve voiced this concern a few times: that my cynical objective for C2Star is to just generate fees for C2.

This is not true. Yes, we charge a fee for each application to the program. The reason for this is that I am guaranteeing that strategies which achieve C2Star certification will be paid a minimum amount every month, no matter what. This is a financial commitment I am making. So I need to make sure that strategy developers don’t just try to game the program and “rinse, wash, repeat” – trying over and over to get lucky, so that C2 winds up paying them for lucky gambles and for zero alpha. (I am aware that even with application fees, this is still a risk.)

So if the point of the program isn’t for C2 to extract fees from strategy creators, why are we launching C2Star?

The purpose of this program is to attract and build a new set of strategies at C2 – strategies that have different performance criteria than current strategies on C2.

This does not mean that the current strategies on C2 are bad. Many are excellent.

But not every strategy currently run on C2 is a good match for C2Star, nor is every strategy developer.

If C2Star criteria don’t feel right to you, that’s okay. I’m not requiring that everyone participate. Instead I encourage you to continue to manage your strategy the way you like, and not worry about C2Star. Perhaps in the future, C2 will introduce other certification categories with different restrictions and performance criteria that will be more your style.

For now, C2Star is very much a work in progress. I’m gathering data on performance and participation. I’m glad to receive feedback and opinions. I’ll reflect on them as we continue to evolve and grow the program.

I appreciate your continued feedback.


#34

that risk is in C2’s favour - say 10 people pay $200 application fee at the beginning, you need at least 5 of those to perform to such strict risk management and performance criteria at the end of 60 (assuming you start paying from 61st day and then 91st day and so on) day period so as to make a loss. a very unlikely event. so business wise this is in C2’s favour (about which I have no issues at all anyway. its a business and it has to make a profit.)

Another point well made is there is noone on C2 who is looking for 10% yearly return. So essentially such a program in its current state does not bring subscribers into picture. I would like to be proved wrong but i think it becomes a game between C2 and trade leaders competing for the $500 with no involvement of subscriber. And the best case scenario for a trade leader is a bear market for S&P, do mimimal trades for staying positive in 60 day interval :wink:

I really like the introduction of risk management criteria but minimum performance criteria just enhances the risk as it is formulated now!

but glad to hear there might be some other programs on the way…

how about a simple one - reward the systems that are TOS/more than 6 months old/have a superior sharpe ratio by giving a a much bigger share of subscription revenue? Sharpe is an industry standard and it is risk adjusted. in my opinion the best measure to reward the trade leaders


#35

Hey come on - good day to you Matthew. I am allowed a cynical hour now and again :slight_smile: especially regarding intricacies. From a broad perspective, what you are doing is actually innovative, probably a first, and I cannot commend you enough for your efforts.

C2Star as it stands is not right for me, although my fiveHedgedLiquid strategy (which doesn’t use ever more than 2x margin) would prob be a good fit - I am just voicing (as a point of feedback) that the rules are restrictive as they stand. And I have no doubt you are reflecting on the varied opinions, esp the constructive ones. There is good solution to this somewhere I know it (prob in the % rules, but needs logical thought).


#36

the idea not a first, there is some company (which has been mentioned in the forums here) in the market who does exactly the same with the main difference from criteria perspective is that they dont really have a strict performance criteria , but they do have a strict risk management criteria - their performance criteria is not restricted by time but they make you pay a lot as long as you wait for fulfilling performance criteria. Resetting fee exists there too :wink: its not for subscribers but they provide real $$ to trade with for the best traders. Cynic in me tell me that they pretty much make their money on wanna-be traders and not really on proprietary trading :wink: Possibly their proprietary fund consists of all the fees collected from the traders. :smiley: Excellent business idea nevertheless


#37

@TradeMate, I think your cynisism is justified but at the same time if they find a great trader they have nothing to lose. So its a win/win scenario for these companies. Making money from entrance fees and at the same time finding a star trader to trade for them. Of course the majority of the traders will fail.


#38

This trader(s) will exist because of law of large numbers at least momentarily until a reset. They actually give first 5000usd in profit for that trader and afterwards that trader can keep 80% of profit he generates with risk critieria in place. So do you really think finding a great trader is the motive?:grin: its a bait! anyway their certification criteria is more doable and practical as they dont have minimum performance criteria like c2. So yes, u can find some talented traders if they are able to keep certification for longer periods but company stands to gain nothing from such traders looking at profit split. Consider also that most who get funded will get decertified too meaning they will bring the equity down!


#39

@MatthewKlein would you be able to clarify the trailing drawdown. Is it based on realtime equity level or based on Closed positions as that makes a huge difference. IMO this one item needs to be based on closed position, otherwise it discourage adding to winners or even holding for the larger targets.


#40

No it’s based on realtime marked-to-market equity (including both open and closed positions).

Just because a position isn’t officially closed doesn’t make the loss any less real to the investor following a strategy.


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