Just in case of a black swan event, managing a dozen positions would take forever to go in and sell each position. Some of us have alot of money on the line
For Trade Leaders or Subscribers?
When you ask for it… why not for both of them?
If a catastrophic financial event happens, I guess the stop itself would close any losing position (with big slippage surely) faster than a manual click on the “close all positions” button, especially if the trader/developer is sound asleep at that moment.
On the other hand if the trader/developer is on the right side of the market then he will just have to sit tight and enjoy the ride.
If I need to exit a position, or all of my positions, I would go straight to the broker. I wouldn’t mess with C2 in the middle. The brokers I use all have the “kill all” button.
@DanceWithTheTrend In fact I agree with you for the most part and I wouldn´t need it for my systems. But still I think it would be handy for some type of systems / their developers. Namely those who open a lot of different positions and can´t secure them with stop-loss, e.g. short options. So if it doesn´t take a huge effort, why not implement both?
@doug_brobst If I´m informed correctly the C2 system would just attempt to reopen you positions. So either way you have to mess with the C2 website (turning autotrade off or/and closing positions). A “close all” button would save some time for investors.
You are absolutely right, Alexander. If i were to close at the broker, and did nothing at C2, c2 would attempt to refill. My point was that if there’s a major issue, I’m going to the broker first, and deal with the aftermath at c2 right after. I’ve had a few situations where c2 and the broker disagreed on a position. I closed the position first at the broker, and then stopped trading the system at C2.
Yes I agree, a “close all” button won’t hurt, as far as C2 is concerned.
This button should also be able to close any pending order too, as these (often overlooked) orders could inflict serious financial damage if they are suddenly triggered (the wrong way) during a Black Swan event.
Was this done in a case C2 didn’t recognize the broker position? not sure if it would work when they do.
In any case the above feature will be useful. There are further risk management features that can help. For example, a certain limit not only on position size but also on trading frequency / total $ amount traded per day / total loss allowed per day. Say a trade leader’s system goes nuts due to any kind of bug / malfunction in his system or a special market move and opens and closes trades every minute. This can eat through an account quickly.
A more structured way to handle risk will be to give each system risk management rules, that every trade leader sets, and then the C2 system enforces. Those rules will appear as part of the description of the strategy. For example: trades up to 3 times a day, with max DD of 20% allowed per day (or positions are liquidated), and with max 4 positions in parallel etc. Currently any risk management rules trade leaders commit to (if they even do) are only adhered to when they feel like it.
Such risk management tools are already offered to the system developer.
For example he/she can set the loss at a maximum of 3% of trading capital, automatically from the C2 platform, regardless of price action.
Read again. I wrote “set by the developer and enforced by C2”. This means that once they are set, they must be obeyed.
This is a big difference. We have frequently seen developers stating in the description they intend to do one thing, then do something else altogether.
Under the above scheme, developers could still have an option to change those rules, but this will mean automated message sent by C2 to subs regarding the change say at least 48 hours before the change takes place.
Plus, I am yet to see any protection regarding trading frequency or losses per day rather than per position.
But the problem could easily be solved if the subscribers were given the ability to set these risk management parameters themselves, from the C2 platform, even though they can still achieve the same results from their own trading station, to some degree.
The basic premise here is that the job of managing the trading strategy falls on the developers, including risk management aspects, and the subscriber merely chooses what’s suitable for his risk appetite and expectations.
Otherwise, you ask subs to be able to judge what is the correct trading frequency, what is the reasonable drawdown per position or trade of any given strategy. Imposing such restrictions on a strategy without a thorough understanding of what goes on inside that “black box” may very well hurt performance.
Regarding your last sentence, well, correct, only “to some degree”. I would very much like to have this level of risk management in IB for example. To be able to define max daily loss, or max. number of positions per day. They don’t have that. The only precautionary settings they do have are per position.
we need 1 button that turns off all systems and closes all the open positions to bring the account to flat. It would be too slow to turn off systems 1 by 1.
This is one of the features proposed for the standalone Excel tool (for Trade Leaders only): Excel Order Entry Tool
You can literally flatten all positions within about 60 seconds in the trading dashboard even with 10-15 systems. Give me a break.
You can lose 300 pips or more in 60 seconds, if the market is moving against you fast.
You need a computer program that will monitor the market in real time and take action when certain conditions are met.
This requires programming skills of course, even though you could hire a computer programmer (freelancer) online, for a couple of hundreds or so (google freelance computer programmers for example). He will write the program for you and show you how to install it on your PC.
I’m a programmer but thank you for the explanation nonetheless. Any program I will run locally isn’t the same as having the broker implement it on their servers.