Longevity of Systems on C2

It’s users and not accounts, but I believe 99%+ of users open a single account in FB. If you think differently, I’d be happy to learn something new.

I believe everyone here will be happy if this was the case in C2.

Like I said earlier, people love to create accounts on the Internet, for all kinds of reasons, sometimes just for fun.

Here is an example.

These three traders created a C2 strategy and yet they did not even bother to place a single trade, see for yourself.

There must be thousands and thousands of abandoned C2 “strategies” like these, who knows.

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Maybe :slight_smile:) for now you showed 3 :slight_smile:

I fit that category. I created a “strategy” just to see how to do it.

Thanks for your feedback DaleTrader.

Strategies that start their track record at C2 tend to be skewed to high initial risk in order to attract subscribers.
Anyway, when a developer, after a period of time, has a successful Futures strategy making money, the increased asset cause the percent performance to decrease, if exposure and leverage remain constant.
In order to continue to have “attractive” (%)profit, the developer faces the dilemma:

  1. increase the leverage (and the risk), reinvesting profit made by the strategy;
  2. continue trading with same leverage (and see the strategy percentage profit drop as time passes).
  3. add entry signals for the same instrument in order to gain exposure
  4. add new instruments, morphing the strategy into something new.

First choice creates concern with new subscribers that start trading the strategy with account funded with “minimum capital required”, as indicated by the developer. It is problematic also for existing subscribers that needs to review leverage, adapting number of contracts to their account size.
Second choice in my opinion has no cons, other that future decreased %profit for the strategy.
Third path do increase leverage but may result in added profit with same or slighty higher drawdown, if added signals complemet the existing entries.
Fourth option creates concern for existing subscribers, that see the strategy become a different animal.

There is another possible choice: rescale down the strategy, but for strategies trading Futures this opens-up a plethora of issues and most developers choose not to use it.

In my view a more consistent parameter to evaluate strategies trading Futures would be the (average) absolute dollar return over a period of time (for example monthly or annually).
This way old and new strategy may be compared without the distortion introduced by percentage values.

2 Likes

I think that is an excellent proposal - I use this method personally when deciding what systems to add to my portfolio, with some adjustment, of course, according to the initial capital the developer started with. In addition I would suggest that the draw downs be shown in the same way - right now C2 shows the maximum dollar dd simply by computing it when the maximum percentage dd occurred which is not necessarily the maximum dollar dd which might occur later when the equity curve might be much higher - right now I have to do it manually taking the measurements fro the equity curve.

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Actually use of $ drawdown amount and $ returns applicable not only for futures systems, but for option trading and for stock systems which open position for part of the available capital. Use of dds in % can be unconservative for such systems, especially in cases if you start to trade the system with less capital then it has now. @MatthewKlein It would be great if C2 can add max DD in $s and average monthly/yearly returns in $s to the Grid or to system stats.

I agree @JITF
Also max $ drawdown can be a useful parameter to evaluate a strategy. Of course more complex and informative statistics exist, like profit to drawdown ratio or Calmar ratio, but in its simplicity average $ profit over a period of time and max $ drawdown can help evaluate quickly a system.
However, from Mr. @Klien perspective I think showing absolute max $ DD can have a negative impact on potential subscribers, as a 9% DD appears less ominuous than, say a 15,400$. But is just my opinion.