Index,
Guess we really hit a nerve here, huh?
I believe you have hit the nail on the head. And you have self-critiqued yourself superbly!
It is said "better to let them think you are stupid, than to open your mouth and confirm it."
Thanks for filling us in… now we will know for all time.
Here’s some advice - before you take the initiative to criticize someone, make sure you know who you are dealing with.
Beau is correct - I am genuine. Consider what I’ve given you as User Specs. If you, as an engineer, cannot grasp the value of that - well… perhaps the problem is yours.
What’s your objective on even being on this site, Index? Why are you here?
What are you trying to accomplish?
Look - read my posts carefully. I am not putting myself out there as a genius or an expert or trying to tell you want to do. I’m not smarter than everyone else, nor do I hold out that I am. I do have a lot of experience investing and trading, however, and I do have a lot of experience in the software business. What’s your background?
Same as yours, essentially.
I’m giving system developers who wish to sell products some input from a Customer’s perspective. Take it or leave it. Your call. Most smart businesspeople don’t get defensive - they listen.
Mostly I haven’t read any input that would be of use to any vendor on the site, but your request for more civil exchanges is something to be expected.
Based on what I’ve read so far on this site - I think I see a bunch of people drinking the kool-aid a lot. Your dialogues are one-sided and it shows.
The only kool aide drinker there ever was Jack Hershey. Please search the name on elitetrader.com as I’ve asked you to visit the site several times. Vendors on here at least have enough confidence to be measured by the public eye.
So - who are you? Are you a system developer or a Customer? It matters.
If you are a system developer - terrific! Then we should have something to measure you by other than your immature comments. Do you have a track record? What does it look like? I’m curious.
What’s a Customer wannabe? Either I’m a Customer or I’m not. I’m a Customer.
It’s more about the fact you have a system. It’s never traded, but maybe you were a vendor once, and why the c2 score is so low. Most cash accounts, like Indexe’s, have outperformed significantly.
In terms of criticizing others for professing to be “smart”, in your comments above - you are quick to call many others “idiots”. Hmmmm…
As someone that claims to have read all the relevant past threads on the site, I’m surprised you didn’t figure out who he is.
Often, we criticize those things in others we secretly have issues with ourselves. Humility, lectures and dollie dishes (I’m not sure what that even is…). Your words - not mine. Be careful when you lash out and the message it truly sends…
I would think the developer community should be ever thankful to newcomers who are willing to offer comments with a fresh perspective.
Newcomers are fine, but he has a problem with you trying to “fix” or “improve” our operations. They don’t get anymore efficient than EOD systems like my own, and there are several others here to explore also.
If not, then Matt will soon have a business revenue acquisition problem on his hands as we all leave this site in droves, due to the arrogance of some (not all) “insiders” who seem to “own” this site.
I don’t think Matt has much problem with revenue.
Thanks, Beau.
Creating an indicator is wonderful. All praise to Index. Creating one indicator out of a universe of indicators does not necessarily make anyone an expert, however, or the right to call a lot of people on this site idiots. I suspect that many of us have some pretty amazing credits to our name if the Truth be told. So what?
Intelligence is one thing - wisdom and maturity are another.
Let’s see if we can back to the matter at hand and eliminate these needless comments.
Skip
Beau,
My response was aimed at Index. Let’s let him answer…
Don’t get me wrong, Ross has an uncanny ability to spot charlitans. Trouble is, it takes a few months in some cases to be proven right.
I actually believe that APD stat is something great that needs to be studied, but can only seen and properly measured on this site. Trouble is, most systems on here aren’t old enough to really fit into a normal sample. One day I will do a paper on it for the journal of financial analysis.
I knew that, but I’m trying to convey the reason for his criticism.
I don’t even know at this point if you are a vendor or customer, to be honest, or if you’ve been up front about your past, b/c the c2 score should only be around 500 if you really were just a new customer.
"make sure you know who you are dealing with. "
An idiot, basically
I fixed it so will not be hearing the rest of his prattles, so whatever…
With a 75% Ignore reading - I think it is clear who the community listens to here. No one wants to hear what Index has to say. Perhaps they are all wrong.
I always laugh when you ask people some legitimate questions and they evade them.
I gave Index a perfect platform to share with us how valuable he is to the site, and instead, we see his true colors.
Sad, but I’ll move on.
Skipin partial response to your earlier comments in this thread—from what I can discern, C2 gives small and large investors alike access to an abundance of alternative products that are typically relegated to hedge funds and other exclusive investment entities. Of course with this accessibility comes responsibility–on not only the part of a vendor but also the subscriber—the nature of a free market is that anyone can sell anything, but ultimately supply and demand will determine the quality and valuation of what is sold—the free market model begins to deteriorate when we look at choosing investors because the quality of an investor based on returns alone is most often masked by survivorship bias. When I walk down my street in Brooklyn and choose to buy a taco from vendor x instead of vendor y, its because its cheaper and/or tastier at x. While there is some subjection in my saying soits much easier to quantify the quality or value of the taco as compared to two top performing, competitively priced systems on C2 trading equivalent asset classes. To use the dead-horse example LTCM—they had 4 years of stunning, high Sharpe returns achieved by the best and brightest, yet the unthinkable occurred. Maybe the best way to select systems/investors is simply accept that most investment methodologies are curve-fitted and additionally, the apparent wisdom and experience a vendor brings to the table can only give you so much confidence in the future performance of thjeir system. Vendors are often looking at the bark on the tree (which I think is an important p[art of their job) while you, as a potential sub, can see the forest—wisdom and empirical discipline should allow serious subs to make good use of this site—unfortunately, most see it no different from a casino in Vegas, which in turn puts an unfavorable skew on system reviews and popularity, making it time-consuming (but not impossible) to vet for probable profit makers.
Skip,
I thoroughly appreciate nearly all of your remarks from your original post! Unfortunately its clarity and value almost immediately got lost in the barrage of verbiage that followed. It would be extremely nice if there was a filter on the internet to maintain professionalism in a game as severely and critically vital as money management and related services.
Do not lose the focus on the bottom line! Positive multi-year average with relatively contained risks. So far and few between and very little else that matters much. I might also add that so few can even recognize this when they see it.
Regards,
Gilbert
[LINKSYSTEM_37449582]
Thanks, John.
Articulate response. I appreciate it.
I’m not sure that C2 offers alternative products that are usually relegated to hedge funds and the like. I believe hedge funds have significantly greater capital to buy products built by bigger and better teams, who test more thoroughly and research more thoroughly than most of the system developers one can find on C2.
Whether they are ultimately more successful in terms of actual performance - well… that’s another thing.
I wholeheartedly agree that is the responsibility of the Customer to learn, understand, differentiate and ultimately to blend one or more products to manage their portfolio with.
To that end, I can make better buying decisions and can do a better job of applying one or more systems to actively invest and manage my money if I had better data about each.
To wit - does the developer trade his/her system themselves, to what degree is it mechanical or discretionary, how long is their track record, does their product perform better in Bear markets? Bull Markets? Non-trending markets?
I saw a note from Kuauai the other day in which he clearly stated that his system does not perform well in certain markets. I applaud his honesty and his wisdom for understanding that fact. Indeed, most systems perform well in one but not two or three types of markets. Wouldn’t it be wonderful if they were required to declare it as a prerequisite for offering something for sale on this site? (Let’s implement some standards!).
I own one proprietary system that in its marketing materials clearly stated how it performed in Bear markets (going back to 1995), Bull Markets, and Non-Trending Markets. Now - of course we are dealing with backtested data - I don’t want to get into a sidebar about the value or non-value of backtested data here - but my point is that they took the time to understand and present that data to me to include in my buying decision. And it produced a little positive extra that played a role in my ultimate decision.
How about an indicator that tells us quickly if their product is 100% mechanical - or a scale that indicates to what extent their product is discretionary. Do you want to buy a system only to find out later that the vendor took off for a couple of days on a spontaneous vacation and “missed” a trade or two that would have boosted his system’s performance by 17%. (I read that somewhere in here). I don’t. That means I can’t trust that vendor. What is he doing with MY money??
How about an indicator that tells us whether they trade their own system or not? Would you buy an accounting system from a vendor that doesn’t even use it for their own business? Not if you’re smart.
The majority of the “stuff” out here is crap - we see this statement over and over again on this site. I maintain that this site is ultimately a marketplace where new system developers or underfunded system developers or system developers who cannot build a standard business around their trading systems come - and hope to turn a profit. But - as a Customer - I find it lacking in many ways.
Let’s clean it up so that the site has more Value to me - a new Customer (and to those trying to be businessmen here, too).
What’s the harm?
Perhaps I will then buy more subscriptions from vendors who are trying so hard to win my business.
A quick story…
Many years ago, I was an IT manager managing a GL system for a Fortune 500 company. My programmers constantly grumbled that if our Accounting Users would just “leave us alone”, Life would be perfect. Some of them actually believed that the Company was willing to spend millions of dollars on mainframes, pay them very nice salaries and benefits, house them comfortably - just so they could “play” with computers and software. Having to deal with Users was beneath them and they found it irritating.
I called a staff meeting and scolded them for thinking that. “Our Accounting Users are our lifeblood,” I told them. "Without them, there would be no reason for the Company to employ us to support their GL system."
Technical people often have a tendency to forget that without Users (Customers) there is no reason for them to exist. I see that going on here way too often.
Here’s another “pearl” that I had forgotten about that should be important to EVERY system developer out there who is trying to sell their trading system…
When all is said and done - one KEY factor that enters into a Buying decision to buy a trading system that you intend to dedicate significant dollars to is this…
CONFIDENCE.
I must have (or develop) confidence in you as a developer and your product. I cannot say this enough.
CONFIDENCE is constructed from many things; how you conduct yourself in public and in private (see past posts for examples). Whether you employ scientific methods - whether you are consistent in your approach to theory, testing and presentation, the performance of your products, etc. Whether you change rules within your product on the fly without telling your paying customers. Whether you have back-up in case you get hit by a car - so I can feel confident that the system is still operative if and when you can’t be there. Whether you’re reliable. How forthcoming and pro-active you are willing to be with me - not just during the sales cycle, but on an on-going basis. How you’ve conducted yourself in the past (not just on this site). Whether you exhibit maturity and wisdom.
Think about these things. Promote yourself and your products this way.
What I see on this site is little more than a search capability that I can utilize. Does it facilitate projecting and building confidence? No. It doesn’t accomplish this at all. There are so many facilities missing that are needed to accomplish this. If I was a Vendor - I would be screaming for more tools and standards so I can build confidence.
It’s the Vendor’s job to build confidence - not the Customers. Are there things you can do to accomplish that? What would you do differently?
Think about it. And I truly hope this will help you sell more subscriptions.
Skip,
I understood your attempt for constructive discussion. My my bad sense of humor wasn’t able to miss the opportunity. Actually I like your approach much better from your second post. Okay. Let’s start from you if you don’t mind. Everything in below is only my imho, of course.
I have no interest in placing some of my hard-earned money with anyone who does not offer PROVEN, SUCCESSFUL products.
With all respect to your money there is no such thing in trading as “PROVEN, SUCCESSFUL products.” You have to always add “at the moment”. Past performance doesn’t guarantee and so on. It’s your first mistake.
I certainly want to maximize investment performance
Investments and speculations are two different things. At C2 you’ll mostly see speculations. It’s second mistake.
Here’s a portion of my buying criteria
Well… Your criteria is good enough with one exception. If you try to shop in the industry with the criteria you won’t have any sellers 
or you have to offer quite big investment amount to a trader/CFA/RIA for dictating your rules.
What it gives to us?
- You underestimate your probable risk at C2. (you have to review the risk)
- You overestimate potential interest in your offer. (don’t trust me. You can easy make few calls to CTAs/RIAs with your requirements. Don’t forget to request full audited track record for few years)
Fair enough? It’s actually where my sense of humor started jumping on my back. It’s typical mistake that is repeated at C2 over and over.
To be constructive:
You have to:
- start from clear definition of your expected risk for your hard-earned money.
- clearly define global exit from the game (level of loses)
Only after defining the risk you have to start working with systems at C2 (if there are any after definition of the risk):
- Allocation of your capital per a system. You suppose to know expected risk of a system. You suppose to have some risk based rules for allocation of your capital.
- Clear definition of exit rules from a system. (C2 is high area of risks. I posted somewhere in C2’s forum that probability to win in Russian roulette is higher than finding any long living C2’s system)
- Your clear definition of re-enter rules to a system. If any.
- Diversification of systems. Uncorrelated and how uncorrelated.
Make a set of the systems and monitor the set on paper without subscribing. Adjust your rules. Check/adjust risks and exits.
Still wanna continue?
Subscribe and set-up autotrading for your portfolio of systems.
Paper trade it. Closely monitor difference in fills between C2 and your paper autotrading. You might want to remove some unrealistic/bad fills/no-fills systems.
Still wanna continue?
Run your systems portfolio with smallest possible amount of trading capital. If real-life execution correlates with your previous research only in the case start slowly increase amount of your capital in trading.
Sounds boring? Well… only in the case you have a chance to not lose everything at C2
Sounds obvious? Well… it is.
Eu
P.S. Actually the rules are from building of portfolio of systems, but it might be applied at C2 as well.
Skip,
I find (what little I have time to read) your posts quite interesting. Not only do they provide detail and perhaps valuable insight - but yeah, valuable. . .that is the key.
So perhaps now is the time I should post something I wrote a while ago:
I do not know why and can’t for the life of me figure out or understand WHY people lend any credence toward or expend energy toward ANY system that has only been traded for a few months.
Is it not the goal of all investors and money managers to provide YEARS of value towards money? After all, no significant amount can be generated unless it has compounded at least a few years.
But people still continue to be awed and then struck when a “system” grows 2 or three fold in a few months and then is halved - or worse! It doesn’t take a genius to figure this stuff out. I am proud to say amongst all 7+ of my systems in 2008 all except for a slight loss of one were profitable and the juggernaut [LINKSYSTEM_30875056] is coming up on one year and has more than doubled in a very difficult market.
I plan on making these very same gains for years to come - thereby affording value to investors. When screened for 300 days+ of C2 systems and sorted by APR, there are only 4-5 system that rank higher that one would even consider to trade. My ranking will increase once we get a better market - but that is besides the point.
I do not have one subscriber! All one has to do is do such a screen to determine if there is ANY value at Collective2, but I guess most have a few K to throw at a system in hopes of doubling and then get out before the haircut.
Go figure!
Regards,
Gilbert
FYI - I have gotten NO feedback towards my contra-trading strategy, which I feel is a stupendous winner or way to take advantage of all the nonsense. All the popular systems are in my portfolio - profiting from the near certainty that they will crash. Meanwhile, I continue to retain a 41% ignore rating.
Skip
But - I’m curious - if your system is closed to new subscribers - then you have maxed out the revenue potential for it.
To make long story - short. Tango was opened on bet with my friend. I won the bet in first year of existence of the system. At the moment the system was fully C2’s automated so I left it as is. Subscriber’s money wasn’t my goal. It isn’t at the moment. To prevent your next question - none of the system subscribers went via the 34% DD.
Regarding Customer (with capital “C”). My temper is bad enough to force me to use only automated systems What I’m always doing is disclosure of the system risks. I.e. every subscriber knew my opinion that if the system had 36% DD in past it would have something similar in future with high probability and I always underline the risks. Sometimes in paranoid way. lol I think only full disclosure of risks and a system vendor expectation of the risks is really important for mechanical systems, but I’m not sells person anyway.
F
EU: nice to see bottom fishing still has potential in this market – I hope you’re researching new (bottom-fishing) avenues given the unprecedented market activity of the past year. If so, start a new system with the results – I’d subscribe.
Nice to see you F. I still see good potential for bottom-fishing future and more particular in entry at the point of time and hopefully 2009 will be profitable as well. At least all past history shows good return after the kind of crashes and I’m greedy enough to try to participate in catching of the bottom. There won’t be any new systems at C2 from my side. I think one is more than enough.
Eu
Eu,
Thanks for your well-thought out response! Now we are getting somewhere!
I had actually composed a detailed message that responds to your points above, but before I could submit it, my ISP crashed this morning and I lost it.
I’ll try and summarize quickly again…
Proven, Successful products. Yes - these should eventually receive more explanation. My intent was to say that products need track records that use honest data that can be examined. If a product doesn’t have a sufficient track record, it should not be considered for investment-grade decisions.
No system ever performs in the future as it has in the past. I agree with you. No argument there (don’t we wish it were true…)
Regarding investments vs. speculative products. Finally!! a C2 vendor who will say out loud that most of the products here are speculative in nature - way beyond investing level products. My point is I don’t think the average visitor to the site knows this about the products on C2 or hears this. Certainly it is not posted anywhere nor is it discussed in the Forums or Chat. Thank you for being honest!
Regarding finding vendors out there who will accept my criteria. Yes - there are some. A few have even contributed to the set I currently use. They do not necessarily require HUGE dollar commitments, either.
Regarding Risk. There are many aspects to a dialogue about Risk. First - it is much easier to discuss it than live it (like many others - I know). Second - again for the AVERAGE visitor to C2 - I wonder if they can differentiate between the Risk factors of different products here. You can - but you’re trained. If the site is to become a successful marketplace for the Customer - it has to work on their terms. It’s a lot more than comparing Sharpe ratios…
Personally, I have a pretty good idea about the Risk levels I want and can live with.
Ok - now for the meat of your response above, "What it gives to us?"
First - an EXCELLENT list of steps, decisions, details, etc. that users of trading systems ought to perform and adhere to. Very well done! Thank you!
Now step back and look at it from a potential Customer’s view point.
Whew!! A lot of stuff to do and consider! Think that the average Customer (or prospect) will do these things and CAN perform these things?? I’m not sure.
But… if they can’t or won’t - don’t all vendors have a problem? If the process is too complicated and too time-consuming - what happens? No sales (or few sales).
If you are a Customer, a visitor, or a Prospect out there reading this - read Eu’s steps and points carefully!! You’ll be better equipped to make better Buying decisions about trading systems you want to dedicate hard-earned cash to!
If you are a Vendor - think about the impact of this… ask yourself if there is anything that you can do to assist your potential (and current) Customers with these steps/issues that others aren’t doing.
Finally - a thought…
I’ve toyed around with the idea of asking for a competition to be set up on C2 or elsewhere. Customers (not vendors) get to “select” one or more systems that they would use (from C2 only) and manage a $100,000 portfolio for a while. Boy - would this stimulate some discussion! Probably get ugly real fast. I’m sure there are some vendors out there that would start squirming, but hey - it’s a marketplace!
Just a thought.
Thanks again and Happy Trading.
Skip
Gilbert,
Thank you for the kind words. I’m just trying to contribute a little. I find many Customers don’t have the time it takes to become educated enough to know what’s what and/or they never speak up.
People who chase after “meteors” are throwing their money away. I would LOVE to see a REAL, unbiased composition of trading results from Customers who subscribed to systems on C2 and how many of them lost money a year after they started, and the average loss.
Now THAT would be valuable!
Regarding success or failure at attracting subscribers - I am sorry to hear that you do not have any subscribers. In my world, when our sales/marketing efforts do not work, we critique them looking for flaws/problems. We must be doing something wrong - what is it? We also try and determine things we are not doing or places we go that we’re not right now. Then, we come up with a different approach and try that out. Pricing strategy, channel selection, demographics of the optimal customer we are trying to secure, differentiation strategy - all these factors and more go into it.
Perhaps I could make the same suggestion to you. Perhaps C2 is not the right site for your promotional efforts. If I were a vendor, and wasn’t getting any sales from a channel - I’d be quick to start questioning if I had the right channel, the right message, the right Value proposition. Am I building Credibility and Confidence correctly? Something is wrong - what is it?
That brings me to another point - for Vendors who frequent this site - what is the average number of subscribers for all vendors who have at least 1 subscriber? How many vendors have none? What is the average “lifetime” of a subscriber for all vendors on this site?
If you don’t know this stuff - perhaps you should ask for it. It’s obviously important if you want to become a profit-making venture.
Happy Trading.
Caio.
Skip
Skip,
I almost missed this thread because I got disillusioned with most discussions on this forum where most vendors don’t take the customers viewpoint into consideration.
So I am delighted to read your posts. I wholeheartedly agree with most of your suggestions.
In my opinion these are the minimum requirements a vendor should put under Descriptions on his System page:
1) Is it a mechanical or discretionary system?
2) Are there any back tested data? (even though we all know the limitations of back testing)
3) Is the vendor trading it himself and if so since when and with what broker.
I think this would also help the vendor insofar as he won’t have to deal with the same inquiries over and over again. At least I am always asking these questions via private message.
Of course, the most valuable thing would be if the vendor would auto trade it on C2 as was once suggested by Matthew - sadly it met with massive opposition of most of the vendors.
Karl,
I’m chuckling…
Thanks for your post.
I don’t even know where to start with a lot of this…
You know - I think there are a small number of very bright system developers here who truly are trying to build good products. There are a lot of wanna-bes who are just young, inexperienced or thinking this site is a Goldmine for a quick buck.
I have less feel for the average Customer who actually frequents this site. If I were a system vendor, I think I would want the site operator to collect and publish demographic data about the Customer population. Particularly if I and other developers are struggling to acquire subscribers as we thought we would.
Would you advertise in a magazine if you didn’t know who the demographic Customer was??
I think changing the site to incorporate more rigorous policies and standards would be a service to Customers and vendors alike.
My suggestion - create 2 regions - one for system development and one for commercial products (we do this like clockwork in real systems development). Let system developers only into the development region (no Customers). System developers can test their heart out without exposure of failure. Have private forums on theories, techniques, etc. Try things out. Ridicule each other - whatever.
Have another region for commercial products. Rigorous acceptance criteria before any product gets to appear there. A different set of forums/chats, etc. Encourage Customer/Vendor dialogues. Vendors use real names. Conduct themselves like businessmen. Customers gain confidence that products in this region have track records - have performed - met acceptance criteria - are well labeled. Can get to know the system developers if they wish. Transparency. Honesty. Full disclosure. Know if they are mechanical or discretionary. Etc.
Also - create a contest area where Customers only could nominate a handful of C2 commercial systems and manage a fictitious $100,000 portfolio with it. All entries accepted. Vendors not allowed. See which systems Customers select and how they mix systems with different characteristics, risk factors, equity types, etc. to build a portfolio. Perhaps have segments - like conservative, mixed or high risk categories. Create a comfortable environment in which Customers feel comfortable talking about their selections - why or why not. Why this mix worked better than that mix, etc. Educate Customers.
And - yes… if a Vendor wants a product to go into the Commercial region - it automatically gets autotraded - and we can all watch publicly how it goes forward.
What a great service to Customers. What a great service to Vendors. Reputation of the site and its Value all go up. People buy things.
We get better at building and buying systems. We all make more money.
The End.
Thoughts??
How many Customers/visitors/Members out there think this is a Good Idea??
Thanks,
Skip
