One sided discussion. On opposite spectrum, do you realize that statistic tells that most “good” automatic systems will blow out at some point or with time systems performance will be significantly degraded? Choosing system is a trading, not a static “sure” thing.
I’ve been outed as subscribing to this so here are a few comments (though many points have been mentioned above already). Dow2Gold popped up on my default Grid screen after hitting 50 trades (at the #2 spot sorted by C2 score) which drew my attention. It might possibly continue to perform but good chance that it won’t–this is not Carma Stocks.
On the plus side he’s been doing well (probably too well) for nearly a year and using instruments I don’t already use. It doesn’t martingale (he adds to treasury trades in a limited, systematic fashion–ask the owner to explain). Owner claims TOS. I like avgerage $win being higher than avg $loss. I like 66% wins, he knows to take a loss and isn’t trying to win every trade. I like the price.
On the negative side… It’s apparently somewhat systematic but I suspect less than I prefer. Backtest is not available. It’s VERY leveraged, doesn’t seem to be using stops, and has high drawdown on individual trades and C2 “risk of ruin” shows drawdown at > 30% (as does my monte carlo simulation). However I don’t intend to trade this at the $25,000 model account starting value–that is way too low IMO. I’d trade it with more funds, maybe $75k or more, to make risk more reasonable (though reduces return). So though it’s high return, high DD, it won’t be as high return or risky for me as I try it out.
3 Likes
I am not a big poster on message boards, but I guess I have to address some of the concerns presented here. I guess the fact that I am doing this at least means my system is somewhat relevant.
To answer some initial statements, correct, this is not a Martingale system. All focus is on minimum capital required and size positioning to try to manage to a less than 25% drawdown. Also correct that I am not afraid to lose. You will lose in trading. No scalping. I also study a lot of regression/reversion analysis and it is probably a valid comment that I am due for a drawdown. I have been on a very solid run for about 6 months. This is TOS as well. C2 requires 10 trades to get the TOS certification and since I only have 4 or 5 trades per month, it is taking me awhile to get to 10. I am currently at 7, so 3 more and I will have the certification posted on the website.
In regards to the system I had on C2 on 4/16/15. I wish I could remember my exact mindset. My signals weren’t too much different than what they are now for the Dow signals, however, I do use time and indicator stops now, whereas back then I didn’t believe in stops. I went through a drawdown and thought it was not a system that would appeal to subscribers, my payment was due for C2, and I just decided to stop. I have become a much better trader, much more knowledgeable about risk management, and have become better at hedging positions than back then as well.
As for the other strategy started 10/1/15, that was a dumb system. It has no relation in terms of signals that I use for Dow2Gold. I thought I had come across a system that would be highly successful, but that was a lesson that you can’t use other people’s signals and advice in trading. Trading has to be truly your own as a developer.
That is really my honest assessment to the questions/comments presented. As any trader would do, I am trying to maximize returns with the appropriate risk assumed and hopefully at the same time avoid big drawdowns that invalidate most trading systems. This is obviously, on purpose, an aggressive strategy. This is a Futures strategy that is utilizing the leverage given to try to achieve big returns. No one needs to run out and put their life savings into this strategy, lol. This should be used as a complement to your other investment strategies.
I actually have enjoyed reading this post and the issues presented here, so thank you. I spend a lot of time poking holes at my own system, so these comments give me some things to think about and what concerns others and potential subscribers.
11 Likes
So, here is my reaction to going TOS. I felt some pressure to go TOS, so I did. These are my thoughts as they pertain to C2’s TOS. In short, if I had to do over again, I would not go TOS. My system involves what I call “Series”. I just completed a series that began on March 7th. Obviously, this particular series did not go as planned as I had my biggest drawdown to date. That said, the drawdown figures in the website aren’t accurate. This is the drawback of being TOS with C2. I had close to $100k in my personal account. The C2 hypothetical account at the time had close to $70k at the time of the first string of trades. My real-life drawdown was only 20.40%, not the 33.5% that is showing in C2. I am not going to trade smaller just to serve my C2 stats. That is the problem with TOS. I should be able to manage the C2 account to the risk management controls I have in place for my system. I have more money in my real account so naturally I am going to trade bigger than the C2 accounts imaginary cash balance. This is C2’s response to this: https://support.collective2.com/hc/en-us/articles/228182508-My-Trade-Leader-account-at-my-broker-has-a-different-amount-than-my-C2-model-account-Is-that-OK-
I get the explanation, you just aren’t going to get a true and accurate representation of the systems performance. In real life, you are going to have to make withdrawals (maybe to pay taxes, or an unexpected health cost issue, etc) on occasion and you aren’t ever going to have the exact same amount in a real-life account over a long period of time. At times, you might make deposits as well. This does not filter through to the C2 TOS website. This will have an affect on how many contracts you can trade and thus a difference in the stats (good and bad) as they are displayed in C2 vs. the real-life account.
My system requires as follows:
Bare Minimum: $25k
$25k-$50k: Max 1 contract YM, 2 YG, 4 ZT
$50k-$75k: Max 2 contracts YM, 4 YG, 8 ZT
…and so forth
Really frustrating that I have spent a year building my statistics in C2 only to have them not represent the systems risk management. I will not be going TOS with any other systems.
Trades-Own-Strategy (TOS) Certification doesn’t mean your Model Account here on C2 is exactly the same size as your own personal trading account at your broker.
Rather, TOS means: you have skin in the game, and you are actually trading the strategy in a real broker account, using real money, and following your own signals. (The Scaling % you use is reported by C2, but it does not necessarily have to be 100%).
Let me gently and politely suggest that your focus on your own personal statistics is misplaced. A Trade Leader’s personal drawdown % and personal Return % of course will vary, depending on that Trade Leader’s starting capital, and how over- or under-leveraged he is compared to the Model Account shown on C2.
Frankly, no one gives two hoots whether you personally had a 20% drawdown or a 30% drawdown. What people care about, and what they ask themselves, is this:
“If I had followed a strategy, and started trading it using the exact amount in the Model Account at that time, what drawdown would I have experience?” That is what C2 answers.
Your confidence in your own strategy, and your willingness to put your own money behind it in a verifiable way, are really commendable. Kudos for that. But C2 can’t control the exact amount of capital in your own personal broker account. We report only that you took the trades you recommended (and what size you took that at). The percentage based statistics are reported on a Model Account basis – i.e. what someone else have experienced if he had followed your strategy at the exact size in the Model Account.
Not true. All initial questions from subscribers are all centered on drawdown questions.
And those subscribers would have had the drawdown C2 reported if they started trading with the amount of capital in the Model Account shown on C2.
Victoria, on positive side good that your private account was just 100k not 1 mln, otherwise this DD could be much worst and nobody could have a clue that you just doing fine 
Sometimes some information needs to be disclosed/updated right the way in description of the system for example.
You can actually see something positive in it. 33% is not a desastrous DD for a high yield strategy and it adds to a more realistic picture which attracts subscribers as soon as you get back on track. On top of that you probably would have touched it at some point anyways. Now you have it out of the way and also learned about how C2 works. No disappointment needed. 
Alexander, misconception of people that don’t deal with money. High yield strategy is statement about past, nothing there to say about future. DD is statement about current time. Most people that deal with money 33% decline in stock market call crash. But for people that don’t deal with money, it is not a big deal, just theoretical paper loss.
Thanks Matthew. I respect all your work and the platform C2 serves. This is a great venue to compare a smaller proprietary trader’s skills (like mine) against other traders while also serving a purpose to those that are looking to follow a particular strategy; one they like and feel comfortable with and coincides with their investment goals. Please don’t get the feeling that I am complaining about this site; I think this can serve as a thread that will hopefully make all of us understand how TOS works, etc.
Now, back to work. Need to get out of this drawdown!
3 Likes
marek, look at my TOS strategy and tell me again I don´t deal with real money… https://collective2.com/details/110612319
It´s not a misconception that 33% DD is not much for a strategy that is expected to yield about 100% p.a. Or would you say judging a MAR of 3 to be good is a misconception?
The yields as well as the drawdowns are statements about the past so I don´t get your point. The current DD doesn´t say anthing about the future just like the performance achieved so neither is worth more.
In the end you can´t compare a strategy´s DD to stock markets, especially when it trades leveraged products.
I agree with Alexander.
Stock market average 10% annual return, so you call 33% DD a crash.
If stock market average 100% annual return, 33% DD would not be a crash.
If you want high reward, you have to tolerate high risk.
Alexander
You do trade with real money, Respect.
wmwmw
Yield 100%…Number strategies on C2 with yield > 100% after 365 days - 15, after 730 days - 1. As I said, yield is statement about past, somehow everyone is doing assumption about the future. If any really understand the statement:
past performance does not guarantee future results?
Statistically the numbers shows yield with each year gets smaller and smaller, and DD gets bigger and bigger.Statement that 100% yield is OK with 30% DD maybe holds after 365 days. But what I’m saying, none of these strategies will exist after 730 days with the same params (sure some will still exists, just yield will be < 100% and DD will be > 30% and I’m most of them you don’t want to trade anymore).
I completely agree with Mathew. Nobody cares about the size of the Trade Leader’s account size, and what their respective DD% is. All investors can hope for are the accurate DD reporting C2 provides based on system size. To my knowledge and please correct me if I’m wrong, Trade Leaders, when they set up their system, can use any account size they choose. If a trade Leader wants their system to match exactly their own account size, they can do so.
As an investor, I need to know how much capital to invest in any system. I have found the best way is to use the exact amount in the model account.
