Ross,
Ah, yes now I see: we are poles apart on this aren’t we.
I should choose systems like most people on C2 choose them. That would be more successful. Just take the “Most Popular” list - that would do it. Like Slow and Steady. What, not there anymore … oh, there it is, on the biggest losers list.
Ah, well. I’m sure most systems on Most Popular aren’t “a crop of future failures”.
As for my crop, Have Fun is the system I’ve maintained there longest, so according to your logic it’s a “Slow and Steady” in-the-making. I won’t hold my breath.
Thanks for starting this thread, Ive really enjoyed the comments from Jon and Wladimir.
I think your assessment of my progress to-date of around 30% is about right.
And I’m not asking you to reexplain a fourth time. Please don’t.
"On mine I want seasoned pros with history and results to show that they’ve already learned their lessons"
Great post. Well said.
Beau - the C2 scores really amuse me.
Folk who don’t trade (but like to critique others) with high scores, while I’m at the bottom of the heap, as you rightly point out! At least you have a system with a reasonable track record to justify yours, so I’m not referring to your score.
I had 3 systems open experimentally a long time ago - just to try and learn how C2 worked. This was well before the “test system” category was available.
When re-starting in October last year, the mistake I made was not re-started with a new ID, as in the intervening years my C2 score appears to have drifted steadily down towards zero! Even when I had two systems doing rather well, in late 2007, my C2 score never budged over 50.
A long-winded way of saying I think C2 scores are a crock of shit. If you want to filter using shit, you know what you get.
Luckily I don’t need your two cents.
Perhaps we should have a separate thread on the value of C2 scores. I prefer to filter on the % on ignore figure within forums, although even that isn’t totally reliable - eg: Ross often makes valuable comments (in my view) despite his 75% ignore rating.
Hi Ross,
Sorry I overlooked this reply of yours earlier - it’s one of your better one’s too!
While I can’t agree with any generalization about failed systems leading to future failures, I think the two examples you give are excellent.
In specific cases, there can be plenty of tell-tale, objective signs that a vendor is likely to fail again and hasn’t learned from the past, or simply hasn’t the necessary skills or discipline for trading.
I have serious reservations about the vendor rating, but I’m sure there’s some way to filter these vendors out - I currently filter out those who don’t use stop-losses. This situation is a little more complex, but I’ll try and come up with something before the next review.
Any suggestions from those interested would be welcome.
Thanks for this input.
Regards,
Murray
When a vendor has a failed system and then creates a new one, its important to ask what has changed. If they cannot tell you what they have learned in a couple sentences, then I wouldn’t give them a second look. It is true, as someone said earlier, that many brilliant and successful traders have a history chocked full of failures, but the reason they are brilliant is because they did learn from these mistakes.
Another point, I believe many vendors on C2 may trade with an edge. This would explain that characteristic initial uptrend in their equity curve. However I think there is probably two elements which are problematic to most systems. First is being overleveraged. Everybody wants something for nothing and do not realize the risk they are taking by trying to double their rate of return. Second is having an incomplete system. This factor works in concert with the first element. As an overleveraged system experiences a large drawdown, often the vendor has no plan of action and panics. From this point, the trader is no longer trading the original system rules and has consequently lost the initial edge.
Just my 2cents
BD
"Another point, I believe many vendors on C2 may trade with an edge. This would explain that characteristic initial uptrend in their equity curve."
I believe this characteristic initial uptrend is an illusion, IMHO. Most systems perform as if they are random. Some of these systems will have an initial uptrend and some will have an initial downtrend. When you look for a profitable system, you will probably find the ones with an initial uptrend.
"I believe this characteristic initial uptrend is an illusion, IMHO. Most systems perform as if they are random. "
Exactly right, Jules. This is the biggest problem with C2 systems.
You track 500-600 systems, and some of them will look good just by probability. Luck. But people save them on their My Analyst, subscribe to them, and follow them as if they are promising.
For example, our attention is drawn to very tall, very short, very fat people. We see these systems and assume they must work. That is human nature to focus on outliers.
Most of these good systems are just lucky. Even after a few months of "good performance"
This is what I keep trying to tell Murray. If you make a list of "the best" based on stats and other things, you have only created a collection of future failures.
This is why I said there must be a second step - you get your initial list, and then you wait 4+ weeks, to see if they CONTINUE outperforming. Few will. If they do continue to do well AFTER YOU DISCOVER THEM, then you may be on to something.
Excellent comment.
Yes, we agree about the cause, but not about the solution. What will happen with your strategy if 99% of the systems perform like a random system? For example, suppose you start with scrutinizing 100 systems of which 99 are random and 1 is good. Then this may happen: After 3 months you have 6 systems that look good. Of these, 3 fail in the next month. So after step 2 you have 2 random systems and 1 good system. Although the good system will be in your short list, you also have 2 systems that will probably fail in the near future.
The point of my “step 2” is when you have an interesting list, and start trading, you will likely have mostly random systems. Again, most “good” systems people see are just statistically lucky.
If you instead wait for 4+ weeks to trade your “good” list, you will probably weed out MOST of those systems you ORIGINALLY CHOSE as being random. It is all about culling your list to reduce your chances of trading a useless system. Most people will find that it is rather hard to get a system out of step #2. But the good thing is, they didn’t lose $$$ in commissions, system fees and trading losses on random systems in the meantime.
Adding new systems to watch is a step 1 procedure. These are 2 different steps.
Murray, great retort to Beau’s comment:
"Luckily I don’t need your two cents."
I hadn’t heard that one before but will have to keep it. And discard the old line “I’m rubber, you’re glue, your words bounce off me and stick on you.”
and why would Murray need 2 cents - when he has a nickel… <cha ching> 
"“exlence has no momentum at present, but I would be tracking it to see which way the breakout goes - if the equity curve breaks higher, it’s likely to present another great opportunity.”"
Great call, duly rewarded.
The ignorant masses who think a successful system is one that never posts a losing month would have already written the obituary for this system during the summer but it is performing exactly as most successful long-term systems do, there will always be periods where a system will have losing days, weeks or even months, the secret is to be able to ride those out by maintaining discipline and reducing risk thereby readying yourself to take advantage when ideal conditions return which is exactly what transpired here.
I completely disagree.
The sudden runup is most likely complete bonehead luck. We cannot see the details of the trade. A sudden jump like this was just as likely a lucky overleveraged trade being in the right direction accidentally. It just as likely could have plummeted, like Cari and the Mood Rings.
It has been meandering aimlessly for 9 months. Randomness has set in, as it does for almost all C2 systems.
This is a system that no longer works, and only foolish people would subscribe to it. Even a blind chicken finds a worm occasionally (by accident).
Losses are part of the game, anyone who’s tried to trade for a living knows that, all successful systems have losing trades and periods of underperformance.
I have seen very very few systems that do nothing for 9 months and then being viable again. I have looked at hundreds. This is not a "a successful system"
I would say it is 95%+ chance it was lucky and 5%- chance it is suddenly viable again. I think this is a far better explanation.
People who trade systems like this will be driven into the ground almost all the time. Leveraged trading + slippage + commissions + system fees demand significant outperformance ability. Or they quickly ruins traders. I would consider anyone still subscribed to this (which is likely, none) as a fool not a trader.
People should not trade systems because it got lucky. That is not the same as viable.
So what you’re saying is once a system starts going sideways it no longer works, and if it then resumes it’s longer term trend upwards it just got lucky.
That leaves only one alternative which is it just goes up every single month and never ever ever ever goes sideways or down for any period.
Good luck finding that.
sideways is one thing. 9 months is dead. And it has been sideways longer than it was "successful." It usually reflects a system that had a few lucky months or only worked under a particular market structure, that has now changed.
Again, it appears to have one lucky trade. It is still dead. That is not a resumption of up, that is luck and only luck. It made a heck of a lot of trades during those 9 months.
the alternative is a system that generally trends up, without gaming the stats.
I would say that the likelihood that the system has no paying subs makes my point best. People vote with their feet.
Mr. Canfield,
You are correct. This system does get lucky from time to time. It currently seems to get lucky about 41.1% of the time, and when it does get lucky it seems to luckily cash out with an average profit of $3,479 (before slippage and commissions).
Many great trend followers have also managed to be lucky from time to time. It seems that every now and then, Mr. Market gets in a little frenzy and they get paid. (Think fat tails.)
I expect that many think Nassim Taleb is a sucker for buying volatility. Of course, every time a market is on fire and someone turns on the fire hose, he gets paid. (Think fat tails.)
Of course there is another way to trade, á la Victor Neiderhoffer, but I expect a true student of the markets would realize that his style is a suckers game. The black swan evens the score eventually.
For me, I find that the harder I work and the more prepared I am, the more luck I have.
P.S. Every EXLENCE trade shown in C2 has been made with the same precise directional and position-sizing (leverage) algorithm. In this case, the only thing that has changed is the market.
P.P.S. Your homework assignment (if you choose to accept it) is to look at the equity curves of Futures Truth Top Ten Systems Of All Times (for example, you can look at the systems listed in The Ultimate Trading Guide starting on page 258) and determine which one of those systems did not have a losing period of at least 9 months.
I disagree that having no paying subs makes your point best. Far from it.
Going with the most popular system on here has often led to disaster, what people want and what constitutes a long term viable system are two very different things.
I would feel a lot more comfortable trading a system that met my specific criteria and had few other subscribers, than joining the unsuspecting huddled masses on the latest bandwagon. There is no comfort in crowds when it comes to trading markets.
