Hi,
I’m interested is the Coincollector system. The results that C2 posts are hypothetical. Has anyone experience with realtime results? Is the system as good as it appears on C2? Anyone having problems autotrading this system?
Many thanks for the answers, any comments are welcome.
Rik
I have been running CC40 for little over a week now…real $…I think the C2 posts are a little optimistic but it is a little early to say…ask me again in 30-60 days…
In general I think you have to be careful with autotrade…it is getting better but kinks still being worked out…some of them systemic and some of them relate to how it is used…
First off, the results on C2 are not “Hypothetical.” There are real-time tracked against market data. They are REAL. The fact that you may experience poorer (or better) performance is purely a factor of execution skill/talent/service (depending on how you handle execution). For autotrading, you want to be careful with the number of trades generated by a system. If the number of trades is greater than about 8 per day, then you may have trouble with auto-trade execution due to the likely tight turn around times for trades. If you don’t want to run that risk, but still want to trade the system, contact the vendor about managed futures accounts that trade their system - not all vendors support this, but for those that do, the execution is vastly improved (no lag).
Is the system as good as it appears? I don’t know, I haven’t tried it. But looking at the statistics, it definitely looks good. The only other thing to be careful of is systems that use a lot of limit orders. If these systems seem to regularly pick the top or the bottom, then you may want to take the value of 2 ticks of the underlying instrument and multiply that by the number of trades (times the number of contracts on average, as well). Then subtract that amount from the posted total gains to determine whether you still think it is a viable system.
I have suggested to Matthew that he force C2 to only “fill” a limit order when the market PASSES the order by 1 tick. That way there are no questions whether the fill would have happened in real time. However, I understand that his list of “good ideas” is VERY LONG! 
Question: The fact that ar system results are “hypothetical real-time” results has made me a bit skeptical. Does it mean that the system won’t work in “real real-time”?
Answer: Published results should always be marked as “hypothetical”, even if they have been achieved in real real-time trading. Heres why:
It is impossible to predict the slippage when using stop or market orders. Two traders, lets say YOU and John Doe, place an order at the same time, and John might experience 1 tick slippage, while you are filled right on your specified entry price.
You dont know whether a limit order will be filled or not. If your trading system requires the use of limit orders, you might experience the following situation: your order is filled, Johns isnt, and the market retraces. While you took some profits using a limit order, John is still in the trade and sees his profits shrinking, and in the worst case turning into a loss.
Another factor is the account size: If John is trading a rather small account, then his broker might liquidate his position because he experiences an intra-day drawdown that issues a margin call. Many electronic platforms are set up in such a way that they immediately liquidate a position, even if the market turns around and he would end the trade with a profit. John then experiences a loss, while you might realize profits on the same trade.
What about the ability to withstand losses and your discipline to follow the trading strategy no matter what? Lets say that after a couple of losses John decides not to follow the system any longer, and thats exactly when the system produces some winners. You strictly followed the system and realized these profits, while John is missing them.
Published results are always PAST results. If more traders would have been trading the system, the prices might have behaved differently. There could be a difference in price movement when 100 traders try to enter the market at a certain price point instead of only 1 trader. And what if 1000 traders placed a 2-lot order at a certain entry signal?
All these factors cannot be fully accounted for when publishing the results. Thats why every serious system vendor should mark their results as being "hypothetical."
Back to ther question: Does this mean that the system won't work in real time?
No. It just means that you should be aware of the limitations of past performance results.
No serious vendor can guarantee that a trading system will make profits in the future, but professional development and thorough testing of a system increase your chances of making money dramatically. That is why some system vendors are so confident that you will like their system, they offer free trial periods to prospective subscribers. You'll be able to sign up for the system and receive the same exact trading advice available to subscribers, at the exact same time. If you eventually decide the system is not for you, you can cancel your subscription without charge - no questions asked.
I will clarify my comments;
The results posted on C2 are as valid as a real brokerage statement for an account traded by a skilled trader using the signals generated by the system. Past performance is no guarantee of future results (CFTC, SEC, and all that) is true of ANY trading program, discretionary or otherwise. It is a basic rule of physics that everyone entering this world (of trading) should already know.
Now, the fact that different market forces can alter the market itself is true - and irrelevant - since following that logic to its conclusion, one should not trade.
What a trading client of C2 is looking for is a way to leverage past performance against future investments. We KNOW there are no guarantees - if there were, then the markets would cease to function. But it is definitely a good bet, that a system that has worked well in the past (in real time testing) will probably perform better in the future than one that sucked. The same for discretionary traders. You either “buy” talent (as proven by historical performance) and follow it, or you “buy” incompetence (again, proven by historical performance) and you fade it. Either way, the talent may crash, or the incompetent may discover the holy grail, and you lose! That’s the game.
Past performance is the ONLY metric for traders and systems. Yes, it doesn’t guarantee anything - but having accepted that - FORGET IT. It doesn’t merit acknowledgement if you wish to trade the markets.
In my opinion - once you get past this barrier to clear thought, you then begin to focus on the QUALITY of the results. Were they generated using a simulator? (What I call true hypothetical) Were they generated by a service such as C2? (Better, IMHO) Were they generated from a small “test” brokerage account? (Good) Or, were they generated from a large account or fund? (Best). Regardless of where they were generated, you then want to look for smoothness of the equity curve; If you can map the trades to a chart, were the limit order executions realistic (most of the time)? There are lots of questions to ask - this is the foundation of selecting a good system/trader for your risk profile. And don’t forget that the C2 site gets the orders FIRST, then sends them off to the client - so they have a head start on execution. This isn’t all that important on systems that trade 1-3 times a day or less, but as the trade count increases intraday, the C2 lag becomes more critical to the performance. Then, of course, there are the other risks: Your system crashes - the vendor’s systems crash - Your connection or the vendor’s connections crash - The internet crashes (don’t laugh, it happens) - The market shuts unexpectedly . . . etc.
Again, welcome to the game!
By the way - the free trial period is a good thing, but don’t forget that “Performance” based billing also has a trial period. Because you are only billed at the end of the month and only if the month is profitable, you can subscribe to a Performance Billed system, trade it for 15-25 days, then unsubscribe, if you don’t like it, and you won’t be billed.
Mauro wrote:
"The results posted on C2 are as valid as a real brokerage statement for an account traded by a skilled trader using the signals generated by the system."
No, this is definately not true, but C2 is the next best thing. The unrealisitc trading volumes of alot of systems are only possible in simulation whereas on a real brokerage statement one could be sure they were getting results that were actual trading volumes and realistic fills. Nonetheless, as I said above C2 is the next best thing. Which of course is to say, that C2 is AWESOME!!!
Volume is not a critical factor in the Forex market which is the largest, most liquid, most accessible, 24 hour market in the world.
Next is Futures at CME which is approaching the Forex market in size, particularly the e-mini S&P and the Nasdaq e-mini which have large volumes.
Not so with individual Stocks which varies on a case by case basis (sometimes more stock can be readily issued in response to demand, sometimes no, with the result your order may take a long time to be filled unlike at C2) and IndexOptions which have limited volume, the fact of which is not taken into account at C2 that may project unrealistic results, essentially forcing some system vendors to attempt to trade index options to take advantage of this fact.
It is no wonder that the systems that trade options and some systems that trade stocks in unrealistic volumes are dominating C2 in terms of accumulated returns.
But in reality as MK pointed out some time back, the price of an option would literally jump the moment the first few options are bought from the market makers making the subsequent options too expensive to buy.
All this only points out to the necessity of a free trial period to evaluate the system as well as the market it is trading.
