How many great medium-term or long-term strategies does C2 have?

How many great medium-term or long-term strategies does C2 have, and how are they received?

I thought I’d take a look.

If any Leaders want to correct any of my facts or impressions in this post, please feel free to do so. You are experts on what you do; I’m just looking at some of the C2 reporting and offering my opinions. Subscribers to these or other systems should offer their comments below.

I thought it might be good to highlight some of the better medium- and long-term strategies for subscribers to take a closer look at. I have not traded any of these and I have nothing to do with any of them.

The last semi-big downdraft started in August 2015 and ended in early 2016, when the Russell 2000 had a bear market drop of over 25%. So I thought I’d examine the most successful strategies that were around at least since the summer of 2015 and that avoided excessive risks.

Which strategies meet the following criteria?

  1. They have been around since July 1, 2015 (621 days).
  2. Annual return is >25%.
  3. Maximum drawdown is <50%.
  4. Return the last 90 days is >2% (with such an easy stock market trend to follow, I might want to avoid a strategy that has entirely missed that trend).

Eight strategies met these criteria:

R Option 97%/yr 42%DD $199
Just Forex Trades 80%/yr 24%DD $225
Growth 500 70%/yr 30%DD $29
Tech Savvy 43%/yr 29%DD $99
Spirit of N. Darvas 35%/yr 29%DD $25
The Momentum of Now 32%/yr 24%DD $25
EMini Swing TM 31%/yr 43%DD $188
AlphaStockss 29%/yr 33%DD $49

If I had set the maximum drawdown at 40% (which is where I started my exploration), the most profitable strategy, R Option, would have dropped out, as would have EMini Swing TM.

R Option (97%/yr) has a great looking chart and a record going back to Jan 2013. The worst string of down months was only 1 month, down -14.7%. The returns for the last 2 years are much lower than the first 2 years but still great—and very consistent. Looking at some of his trades, it appears that he held a large position in QQQ for more than half of 2016, but most of his trades appear to be winning positions writing naked puts. If that has been his strategy going back to 2013 (and I don’t know whether it was), then it is amazing that he has not been seriously burned. Perhaps he (or his model) has some genuine skilI. Though he has a substantial number of Autotraders (29 on a recent trade; $199 sub. fee), I think the risk of writing naked options keeps down his subscriptions.

Next is Just Forex Trades (80.3%/yr). The worst string of down months was 1 month, down -17.1%. The return for March so far is negative 7.4%. Its last reported Autotrade had only 7 trades to open ($225 sub. fee).

The third most profitable strategy, Growth 500 (70%/yr), survived the late 2015 downturn with only modest damage, but had only a 7.7% return for 2015, followed by a spectacular 153% in 2016. Despite charging only $29 for subscriptions, Growth 500, had only 5 Autotrades on a recent closing signal.

Tech Savvy (43%/yr) has strong returns since April 2015, with its worst back-to-back down months being -7.4% and -7.2%. A recent reported opening trade had only 2 Autotrades ($99 sub. fee).

The Spirit of Nicolas Darvas (35%/yr) has not made more than 28.2% a year since its first year, 2013, in which it was up 42.6%. Yet it’s up 21% already this year. Looking at the chart, much of the returns are driven by three great 3-4 month periods: July-Oct 2013, May-July 2015, and Nov 2016-Feb 2017. A recent opening signal had 9 Autotrades ($25 sub. fee).

The Momentum of Now (32%/yr) has a long track record going back to 2012, but it had a poor 2016 (up only 1.4%). A recent opening signal had 5 Autotrades ($25 sub. fee).

EMini Swing TM (31%/yr) is lower today than it was at a temporary peak at the end of January, 2016, more than a year ago. A recent closing signal had 6 Autotrades ($188 sub. fee).

AlphaStockss (29%/yr) got hit hard by the late 2015 downdraft, losing 9.1%, 6.6%, and 11.4% in consecutive months. It took about 17 months after a June 2015 temporary peak for the portfolio to make a new high about the beginning of December, 2016. But it had an excellent 2016 (up 38.8%). Some recently reported signals had 1-2 Autotrades ($49 sub. fee).


The Grid shows 85 strategies at C2 operating since July 1, 2015. Among them, 22 strategies had returns of 25% or better. Among them, 16 had maximum drawdowns of less than 50%. Of these 16, 5 had negative 90-day returns and three more had 90-day returns under 2%. Most of the eight I eliminated at this step are having modest mediocre 90-day returns and thus may be as good or better than the eight strategies I included. That leaves the eight highly successful systems discussed in this post.

With so few systems getting more than 25% a year without huge drawdowns, it would seem to be very difficult to do that for even a year and three-quarters. Also, I found the modest number of subscribers to most of the strategies to be somewhat surprising–and disappointing.

Though I’m not planning to invest in any of these anytime soon, those of you investing in some of the high-flyers with short track records at C2 might consider taking a closer look at some of these eight strategies with excellent mid-term or long-term annual returns.


I think that I may have set my screen a bit too high on the return side. I just looked at the Drunk Uncle strategy, which is run by the most impressive commentator I’ve read so far at C2, David Stephens. Drunk Uncle has a 23.3% annual return since Jan. 2015, with a 10.2% drawdown. That’s pretty darn good.

And he has a slew of subscriptions at $49.

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true, but correlation to the SnP500 is a little too high for my liking I’m afraid…

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Your concern (SP correlation) makes sense for an investor considering Drunk Uncle.

It appears that Stephens mostly invests in the SSO without using any (or very much) leverage. Since the SSO is double the SP500, it is not surprising that Drunk Uncle has a high correlation with the SP500 (.477). It appears that he gets most of the bang out of large SP500 up moves while severely controlling his losses in the downturns. That is harder than it might seem.

Combining Drunk Uncle with another strategy that is less correlated to the SP500–or even inversely correlated–might be a good portfolio strategy.

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As pointed out by QuantitativeModels above, Drunk Uncle is an S&P500 index strategy. It only trades a S&P500 2x beta ETF and only trades long. Correlation shows the relationship between two sets of data, in particular how often they move in the same direction. Since Drunk Uncle trades the S&P500 and never shorts, it will have a perfect correlation to the S&P500 when a trade is active. However it doesn’t have a correlation of 1.0 as sometimes it is in cash (hopefully when the S&P500 is declining). I haven’t done the math but I suspect the correlation value reported for Drunk Uncle can be interpreted as literally a measure of how often the system is in cash.

Anyone subscribing should be aware it is a long-only S&P index strategy and thus will have a correlation with the S&P that reflects that. Of course it will have lower correlation to certain other systems, other assets, etc.



Well put. . . .

I just hope that we can´t translate number of autotraders into number of subscribers. Otherwise I would feel like most investors here don´t actually look for a way to make and KEEP money but rather gamble for the quick fortune. In any case It´s unbelievable that the many scams/high risk strategies get equal or more attention than the real leaders. But I guess now I begin to understand why 95% of all traders loose money. They first loose common sense.

It´ll be interesting to see if all of the mentioned systems will still be in action in 1-2 years.

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How do you expect the system to perform in a bear market such as those we had in 2000-2003 or 2007-2008?

Message me directly on Collective2 and I’ll send you a link to the backtests which include those years.

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Drunken Uncle did well in the last 2 years, but he also used 2x leverage. Comparing that performance to S&P500, he didn’t beat benchmark by much, someone buy and hold 2x SPY would have done equally well.

But I could be wrong.

Outperformance over the S&P500 index in 2105 was 23.33% (the S&P lost money in 2015 so good luck just holding a 2x leveraged ETF, you’d have lost 2x more). Outperformance in 2016 was 11.66%. I call that doing quite well.

*Above calculations used index-only S&P500 numbers exclusive of dividends. Drunk Uncle numbers were also index-only and exclusive of dividends and C2 fees. Past performance does not guarantee future performance. Don’t lick a cactus.


Drunk Uncle started at the end of Jan 2015. Since that time:

SSO (2x SPY) +43% with 23% drawdown
DU +60% with 10% drawdown including all the commissions and C2 fees.