I encourage anyone to share their experiences following systems here so far. While my personal trading is going well, Im sorry to say I have nothing good to report as far as following systems here. I have tried 4 systems over the last few months, each at least 6 months old, with maximum DDs no greater than 15%, and showing annualised returns of greater than 150%. Without exception, every system I have joined began its maximum historic drawdown within a week of my joining. Ive stopped following any systems for the time being. This is definitely the worst run of luck I have ever encountered!
Zsolt - Perhaps the problem lies in your method of selecting trading systems. Do you believe that a system can sustain 150% annual returns for the long run? What level of drawdown would be acceptable for a system with 150% annual return?
I personally would not trade any third party system without a very good understanding of the trader’s system and money management. The trust can only be obtained by watching the trader make trades for a long period of time. This is all the more important with higher leverage systems.
I should also point out that a lot of people make the mistake of jumping into systems on a hot streak and then bail when the system goes into a drawdown. This is a good way to lose your money fast. Investing is a marathon not a 100 metre sprint. Take a long time to choose your third party systems and then stick with them through the drawdowns.
Steve
I would say (and have said before) the biggest problem is that when hundreds of systems are tracked, that there are always systems on top (that look good) due to pure probability.
In other words, most good systems here really don’t work.
I suggest instead, that you look at some good-appearing systems and put them into your “My Analyst” page, and follow them for a few more weeks. If any CONTINUE to do well, it is more likely they actually have some outperform capability.
I think this is the biggest mistake most people make here on C2. I hear this “it stopped working when I subscribed” complaint over and over
I’m sorry to hear about your disappointment. Perhaps you can share which systems you subscribed to, at what dates, and why. In that way, others might be able to provide more detailed feedback.
For a detailed account of my own experiences, see: http://scitra.blogspot.com
Zsolt I am sorry to hear of your experience. Please don’t subscribe to one of my signals. Thanks
I still say the best way to "trade" C2 systems (besides mine of course ; ) is to trade them like stocks.
Find the 5-10 of the best (currently) up-trending systems each month and ride them a bit all the while keeping strict stops - perhaps rolling and just bounce around. Try to ride the sweet spots on any number of systems that come and go!
Ps aka gA or Gilbert - go USC Trojans!!
LOL
I’ll put up which systems I was subd to when I have a bit more time. I want to stress that I view my results as timing a issue. Had I gone into these systems 3 months earlier I would be doing fantastically well. 3 of the 4 systems I was in seemed to ‘go to pieces’ once the drawdowns had reached their historic maximum. I can only attribute this to trader psychology or drastically different market conditions, or both. Nonetheless I am satisfied with my ‘meta-money managment’, to coin a phrase. I set drawdown limits for each system and stuck to them.
I made this same comment eight months ago or so, and people seemed baffled by it. For some reason, they couldn’t fathom the logistics of getting into a system while it’s in an upswing, and then bailing out when (or before) it starts to tank. The devil is in the details, of course, but I’m not going to retiterate what was already posted before as to how to manage those details.
@Lew,
I see you’re back at it. Skipped Sep07 I guess and are now looking to Oct07 expiry?
I see from your system description that expected annual return doesn’t factor re-investment of profits. What is the expected compound annual if they were?
GArevalo
@ Lew,
Do you think C2 stats need some adjustment? I mean spreads are still not recognized with standard accordance.
Also in looking at your 26.67% reduction in cum due to commissions when you have less than a handful of trades? Mine is remarkably expensive, too.
Think about it. Gilbert
Indeed I was one of the people having problems fathoming the logistics. Perhaps you can enlighten me in the case of Weekend Trader. It realized >40% profits in a week and current equity is $210K. Time to bail out, or get in?
In any case, I would expect that anyone who was trying to time the equity curve of this system would have missed most of the sudden 40% upward swing.
Same question for Trend Plays #1. It was in a downtrend for the last 3 months, but since the beginning of this month it looks like the uptrend is going to resume. Current equity is $190K. Time to get in or not?
Lew put me on the list of skeptics. I suspect using technical analysis to idientify when to buy a signal based on its chart would be fairly hard. I think the basics could be used when to get away from a signal. If a signals chart does not have higher highs and higher lows I don’t even look at it. After that I wouldn’t know what else could be usefull?
I think I’d use an Equity Curve average if I was attempting this… staying with a system as long as the equity curve stayed above its MA… and holding all trades if it dips below…
But how then do you decide what period to take for the MA?
Personally,
On the strategies I trade where I use an Equity Curve indicator, mine is set at a period of 30… But that’s just me… I"m sure any variety of periods would suffice with varying results… But I guess the more scientific answer would be that it should be backtested with an eye toward the dangers of curve-fitting…
For me, too short a period would get triggered after a few losing trades. So, I want to make sure the strategy has really failed before altering my trading of it… so 30 fits my personality… Not that it’s the be all, end all of MA periods… 
I haven’t backtested it, though I do use an equity curve indicator on many of my charts…
The strategy called an Equity Crossover isn’t that uncommon.
http://www.adaptrade.com/Articles/article-eq.htm
Since C2 subscribers aren’t running these strategies on their own computers it might be difficult to track the equity curve manually. I came across this piece of freeware that might help… (I haven’t used it myself, so no promises)
http://www.tradelogger.net/aboutequity.html
Look at the market, not the system. It’s nothing new that many systems or strategies are tuned for a particular market, and thus achieve amazing gains in a relatively short period of time. But the danger is when the market slowly (or quickly) shifts, and becomes untradable by that system. When you see the market shift, or suspect it will soon, that’s the time to get out.
For example, I’ve been in private communication with one popular vendor on here, and warned him of this collapse we’re seeing… several weeks ago and then with a reminder this week. It’s not that difficult to see what is possibly coming ahead on the road, and it’s not that painful to close out winning trades and stay out until the dust settles, or to find another system that is tuned to the particular new market as it shifts.
Another thing to look at is closing out trades at a stop-loss you set. Most of the vendors I’ve tracked have suicidal draw-downs at times. If you’ve got auto-trading hooked up, this is easier said than done. You have to create your own vendor account and system, then contra-trade the item in question in order to close it out without screwing up the rest of the auto-trades. Pain in the ass, and not always practical.
Yes, September was too risky to trade, considering this is a 401K/IRA strategy. No guys… I’m not interested in debating the theoretical risk involved in my trades.
I have no idea what the compound annual ROR is… and I’d have to add up the numbers again to find out. I generally leave a 20% cash cushion in the accounts for any one trade, for no good reason at all. It’s habit, and I’m an old dog.
Yes, I found out that C2 is not set up to properly track option spreads. I have to trade each leg manually, as there’s no facility for trading it as a 55 cent credit spread (for example). In addition, max draw-down is computed without regard to the other leg gaining value. That’s how it is, and that’s what I adapt to.
