Today, I see some negative reviews about a vendor suddenly (and allegedly) changing his system during the trades of one session. While I am not going to comment of the specifics in this situation, I have told many of you, in private messages, my approach to seeing if a vendor is likely to changes approach midstream.
1. Take a look at all the systems a vendor offers, if he offers more than one, IN ADDITION TO THE ONE YOU ARE LOOKING AT. You should be able to see a pattern (for example, adds to winners, adds to losers, has firm stops, has soft stops, etc.). Chances are, what a vendor has done with other systems, he will eventually do with the system you are interested in (it is the vendor’s comfort zone). This may or may not be a good thing.
2. Private Message the vendor, and ask him questions like “when do you add contracts?” “what’s the max loss or gain you expect?” “do you exit winners/losers quickly?” “Do you trade more than x times per day?” “do you ever make extra trades to breakeven on the day?” etc. THEN, once you get good answers, watch the system for a month or so (don’t subscribe yet). During this test period, and anytime after if you do subscribe, if the vendor EVEN ONCE breaks these rules (and doesn’t tell you beforehand), drop it from your list. The vendor cannot be trusted EVER, period. Regardless of how good the performance is, if you subscribe, you are playing with fire.
A good vendor will fully explain his rules, and will follow them exactly, all the time. Bad vendors will not. And note, “good vendor” does not always mean “good system.” I think that’s where people get messed up - they think every good system has a good vendor. Not true!
I think C2 is a tremendous site for laying out stats of what a vendor HAS DONE. But, there is little you can do to predict what a vendor WILL DO. I think my 2 suggestions are a step in that direction.
Comments or additions to this list are more than welcome.
Kevin
1. Take a look at all the systems a vendor offers, if he offers more than one, IN ADDITION TO THE ONE YOU ARE LOOKING AT
Completely agree. Same vendor, different system means little. People trade, manage money, manage trades, leverage, etc. pretty much the same.
If someone has a handful of systems, focusing on the "one that looks good" is more a recipe for disaster than a smart decision.
Kevin, Craig’s actions are predictable. I know I wasn’t the only one that saw it on the horizon.
Beau - I don’t disagree, but obviously more than one person out there didn’t see this coming, hence the negative subscriber reviews. In fact, when you look at a lot of reviews, you see things like “lost his nerve” and “what happened?” on many systems-gone-bad reviews. So, the message that is fairly obvious to some is not obvious to all.
As a trading community, I think it benefits good vendors and ALL subscribers if we can help subscribers avoid this sort of situation.
So, let’s all help each other out - what “warning signs” beyond what I have listed can help predict if/when a vendor will abandon his system?
Kevin
P.S. (In case you haven’t thought ahead, once we identify these warning signals, we’ll have to figure out how to communicate these to ALL subscribers. Maybe at that point Matthew will be able to help, too.)
Kevin, what I was recommending a week of so on the chatter is that there should probably be "Rules" fields in the system setup (example, risk per trade, expected drawdown, number of contracts, etc,) that prohibits the vendor from trading outside those parameters. The vendor should not be able to change the parameters during an open trade and if changes are made then a message should be broadcasted to all subscribers. It is probably impractical but there should definitely be a way to protect subscribers from indiscipline vendors.
It is probably impractical but there should definitely be a way to protect subscribers from indiscipline vendors.
The way for subscribers to protect themselves is to only trade a system or with a trader who has been around long enough to demonstrate the long term disciplines required for successful trading. That is unless they choose to take higher risks with some other designed strategy. Taking higher risks is acceptable as long as the individual is aware of what they are doing and understands the added risk.
Not sure what Craig said he would do, but intraday drawdown is supplied by C2 from the equity curve and from the individual trade.
Phatkicker has however spoken loud and clear with his C2 track record of killed systems.
It would be interesting to hear what his reply is going to be this time?!?
Collective2 is littered with systems that have a streak whereby a sharp multi-hundred percent run-up occurs, attracts subscribers and then seemingly languishes for a prolonged multi-month period (flat-lines or makes little upside progress). Patience IS much required at this juncture on the part of the vendor.
"Why is it that vendors like to go crazy all of a sudden when their systems are doing well?"
The system during said “languishing” periods IS doing well by simply retaining gains! Many times the system vendor will then try and force the equity up to their demise. In this case, it seems Craig was caught in a 5% drop from the indexes and with a leveraged instrument like the ES - - you can get killed.
You can’t make the market do for you what it can’t. You will get killed in trying. You have to have a huge amount of patience. Wealth is not built overnight. [LINKSYSTEM_34377156] is a top system in popularity and has phenomenal stats. It also has built over $500,000 in about 6 months. If you are going to trade this system why wouldn’t you be prepared for a $67k loss or about 10% in DD?!?
Lastly, I have many a “hold-out” in my C2 “contra-trading” system portfolio. These handful came into my portfolio after a similar run-up and have made little progress since to the upside or the downside. These vendors have very little chance of improving in a similar fashion anytime and WILL in all probability try and push the envelope for my system to then profit as they fail.
The only real way to make a second, third or fourth leg up is to know how you got there in the first place, be patient and profit when the next optimal period for the “system” returns.
Best to Craig,
Gilbert
FYI - the real-money stats indicate equity has gone from around $250k to over $450K and then back down to a little over $400k. Whoever said C2 was going to be the “holy grail” to riches or that “scalping” systems can reward a 1000% with 40% DD for very long? I think subscribers do not know what to expect or look for. What are you looking to “make” $$$-wise at C2?
"Why is it that vendors like to go crazy all of a sudden when their systems are doing well?"
When a system is doing really well it is easy to began thinking this is easy, I’m good. And then Humility appears.
Here we go again…
ALL this chatter is a direct result of discretionary systems being run by PEOPLE.
I know building 100% mechanical systems are more difficult and more time-consuming, but once built, they don’t have these problems!
I repeat - when you buy a discretionary system, you are buying an ADVISOR - not a PRODUCT! You are buying someone whom you are going to entrust whatever risk capital you are willing or able to commit to their “product”.
If you are buying an ADVISOR, then you have a whole different level of due diligence that you ought to satisfy before you commit your money to them, or you just might end up “betting” on them - AND you will always be vulnerable to them making the “right” decision AND being actively at the wheel at all times.
Make it easy on yourself - buy 100% mechanical systems! Take 1 huge variable out of the equation. That’s why I would advocate for a required piece of information from each and every vendor who solicits subscription money on C2 - whether their system is 100% mechanical or to what degree their product is mechanical (there are probably levels of mechanization).
Also - if I were a Vendor on C2, if I had a 100% mechanical system - I would trumpet the fact that my system is 100% mechanical when probably 98% of all others - aren’t!!
At this point. . .I could probably make one of my systems (nearly) “100% mechanical” - since the greater part of my rules are so defined that this is probably possible.
Who knows I may do this some day. At the same time. . .please direct me to a “100% mechanical” system so I may deem whether or not it is “successful”.
Regards,
Gilbert
For instance - take my strongest Market Direction calls (instead of trading in and out of all of them throughout the year) and have a certain mathematical level that states the initial entry is a prescribed percent margin.
Then have “exposure” automatically adjusted as equity increases or decreases as I do now with my trend-following systems.
It has been documented in my system [LINKSYSTEM_35446481] forum that with three market bias calls LONG, SHORT and LONG ( the short wasn’t traded as this system was not brought on-line, hence pre-stated drawdown) over the last 6 months or so. Add the SHORT trade (as called and traded in KC Hedge) and you will at least add a few k in equity just by avoiding the majority of the drawdown, and you could [lol] have a powerful nearly “100% mechanical” system with steep returns.
This would only be traded a few times a year, but would compound powerfully. So sign up and I will bring it on-line and afford you the trades as I stick to the plan! Or wait. . .it will eventually be offered.
Regards,
Gilbert
Skip et al, let us know what other 100% mechanical “systems” you can direct us to?!?
- about 100% per year on the low end.gA
I’m a little surprised here, have been under the impression any real system is mechanical. If its not mechanical how is it a true system. Sounds like coin flipping to me, not a system.
I personally have one mechanical set up indicator and four mechanical trigger indicators. And all exits are mechanically based on the ATR indicator. The discretionary part of my trading can be picking which trigger is used and unfortunately passing on many trades, something Im working on.
Gilbert,
My methodology is 100% mechanical. By that I mean the triggering of my timing signals and the stock picks are 100% mechanized. However, the inputting of my orders into C2 is manual.
Since my system here on C2 is EOD based, the input logistics have a small bearing on the final performance of my system.
I believe Kevin has a system that even the C2 orders are mechanically entered.
Maybe what C2 needs here is system developing 101 for those who are new to this.
My goodness Futurm, what an awesome EOD mechanical system you have in [LINKSYSTEM_23373921]!
An EOD system that ". . .works in all markets, bull, bear and everything in between. Market orders. Stop loss and profit points are given."
More than 2 years with a 60% compounded APR and 16.7% max DD. Too bad more people aren’t wiling to trade the commodities.
Regards,
Gilbert
FWIW - I recently started a thread at EliteTrader (http://www.elitetrader.com/vb/showthread.php?s=&threadid=158898):
A Chronicle Into What May Be a Most Lucrative Investment Journey
It details what a 50% return when compounded over 5-20 years can produce: INSANITY (wealth-wise)
My main point and the only reason I am here is to gain an audit of what I believe will be a large annual return that will be accomplished for YEARS.
In other words. . .what is the use for a system developer to grow a C2 account 50-200% in the first couple of months and then get subscribers on board only to fall or at best tread water?
Even if it succeeds in making it up the next leg of say 75%, a $25,000 account will only provide $15,000. Then what do you do? It may be just as or even harder to be a successful "system picker" than it is to be a successful system vendor!
Nowhere near a real reward is possible "scalping" a quick $10k (IF on average a few times every couple of years) from a system. Do the math: say 3 systems a year for 2 years. 20k into each not at the same time. One in each year is a $15k winner and the others at best wash.
So you made $30k on $15 - 45k. That is about a 50% annual. Yet, confidence may rarely be invited into the psyche of the majority of C2 traffic as precious few will actually "make it" into this category. If you do. . .you will of course stick to those you have been with and have the longer-term successful track records.
They have the best opportunity for you to grow another 50% per year each year and more importantly will allow for you to have the confidence to parlay or keep the 50-100k on the table with these handful of real winners.
So doing this APR for say 5-7 years has virtually a non-existent probability (to grow into some decent wealth of say $250-500k). Maybe others have it figured beyond this framework. . .but expectations are what need to be managed around here to maintain and grow constituents and web "stickiness".
Regards,
Gilbert
Will my GUARANTEE (that my equity will soon ramp up more than 100% and be retained. . .) bring subs on board right now? I guess not.
[LINKSYSTEM_30875056]
Hell, I cannot even get taken off this INSANE ignore rating. . .thank you very much!
Skip -
I don’t think the vendor saying he has a 100% mechanical system even cuts it. How do you know he isn’t lying, or that he won’t go off the system at some point?
I’m trying to find clues that indicate a greater possibility of the vendor doing this (really regardless of mechanical or discretionary)…
That is maybe because you consistently go off topic, talking about yourself and your systems and your market direction calls and compounding gains (you did all of the above and more in this thread).
That could be one reason why many threads and chats die with you as the last poster. And why so many people have you on ignore.
If you’d contribute to the exact subject at hand, and refrain from turning the topic into all about you, maybe more people would listen.
"Too bad more people aren’t willing to trade the commodities."
This is true, but since very little is known about subscriber numbers I’ll give one number out, 145 is the total number of subscribers to Turning Points since it’s inception.
