Here's why I came on and Why I like C2

Trading and Markets
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Since 1989, I’ve been immersed in the world of trading, initially captivated by day trading and scalping strategies. After many highs and lows, I realized that simply buying and holding index ETFs would have been more profitable and less stressful.

Determined to find a better path, I utilized the Research Wizard software I had previously invested in, exploring every parameter to uncover a strategy that could outperform the indexes. After thorough research and testing, I developed a strategy that showed incredible promise in backtests and confirmed its potential through forward testing on my trading account.

To see its true potential, I created an account solely dedicated to this strategy—SK Small Caps on C2. I’m also trading it on my eTrade account, and it has closely followed the backtests, offering the exciting possibility of achieving 75-100% CAGR with minimal drawdowns.

Despite this month’s market volatility, the strategy has held strong, reinforcing the hope that it could offer a long-term, low-stress approach to investing. Let’s remain optimistic as this journey unfolds, knowing that this could be a game-changer in the trading world.

2 Likes
2

I like your equity curve so far, off to a fair start. Here’s a link to your strategy page: SK Small Caps

I have concerns of scale however. Here’s a few of your recent trades:
4/3/24 DDD 3D SYSTEMS LONG 2,289 (volume: 748,700 : avg: 1.6m)
4/3/24 SSP E.W. SCRIPPS LONG 2,853 (volume: 1,897,000 : avg: 1.2m)
4/3/24 CNSL CONSOLIDATED COMM HLDGS. LONG 2,204 (volume: 212,000 : avg: 611k)
4/3/24 PAYO PAYONEER GLOBAL LONG. 1,943 (volume: 1,939,500 : avg: 2.5m)

Your account volume on these trades ranges from 0.1% to 1.0% of the daily volume on April 3 for these four tickers. If you had 9 followers with similar account sizes, your trades would account for between 1 and 10% of the DAILY volume.

The problem with your strategy might not be that it won’t work for you, it’s that it won’t work for your subscribers. There will be slippage. Likely more than you have accounted for in your backtesting. I have no idea what the depth of the order book looks like for these tickers, but very likely there will be substantial slippage as the orders for your followers get sent out in quick succession by C2.

Good luck, but this has been the demise of many strategies on C2, trading shares on too thin volume. The strategy may work just fine for you trading your own account first (with orders sent to C2 from your broker, and then to your subscribers), but unlikely to work as well for them. Your strategy numbers will likely suffer more than your trading account does, since C2 takes into account the fills of your subscribers in calculating your listed stats.

This isn’t a criticism of your strategy, which seems to have a good start. It’s an alert, a realistic appraisal of how strategies scale (or not) when shared on C2. Your best hope is perhaps to keep working on this edge, but apply it to stocks with higher volumes, deeper order books, and tighter bid/ask ranges so that your subscribers can get good fills. Even if your CAGR drops to half of your hoped for return, you’d probably find a good audience here.

2 Likes
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This is a fantastic start! Keep up the great work, it’s really promising.

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It is amazing how you think like me. My concern about scaling this has been about volume. I have been working in my research with stocks in the SP 400 (mid caps) and of course the SP 500.as well. Though not as high the mid caps have over 50% CAGR. The interesting one is the SP 500 stocks. Although not as high, it just about doubles the index itself with a much smaller drawdown. My thought is that it could be traded on margin because the drawndown is so low.

1 Like
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I’d like to clarify something about the SK Small Caps strategy to manage market volatility. The strategy primarily involves maintaining stable core positions for set periods—like one, two, or three months. During these periods, trading mainly involves minor adjustments to the size of these core positions and their hedges, currently using TZA, though this could change with market conditions. Initially, there were significant changes to some positions, as mentioned by Babbage_9010, with SSP and PAYO being dropped and DDD and CNSL being added. However, typically, most trades are just small adjustments to positions, with large trades occurring only when a stock is completely replaced.