Is the minimum recommended capital to avoid oscillation listed for each trading system? So far Ive only been able to find this info AFTER subscribing to a trading system. It would be good to know if I can allocate sufficient capital BEFORE subscribing.
Could someone please tell me the minimum recommended for the following:
Positive forex
VN forex club
That’s a good feature request. I’ll try to add it. Note that the actual number will vary over time. It depends on three inputs: (1) The amount of capital in the system’s hypothetical account at C2. (2) The smallest number of lots that the systems uses if it “legs into” trades. (3) Your available leverage at your forex broker.
There are a few implications of what I have written above. The first point to note is that, if a system does not “leg into” trades, then there is absolutely no minimum required to trade the system. You could trade the system with $100, in theory. (To “leg into” a trade means, for example, buying 5 lots, then buying another 10 lots, etc. Systems that do not leg into trades simply issue a signal to buy, and then one to sell… they do not incrementally add to, and subtract from, positions. They simply open the position, and then close it.)
So, to refer to your specific requests: Positive Forex does not leg into trades, and so no minimum is required. VN Forex, on the other hand, does leg into trades. At this current point in time (July 8 2007), C2 recommends $2,200 in capital to AutoTrade the system without oscillation. (Oscillation is an extra buy or sell signal, issued by C2 to make sure your account stays within the very tight risk parameters you specify.) This minimum number will change over time, however.
If you are a system vendor, and you want to open your system to the broadest subscriber base possible, the secret is to use the smallest unit-quantities possible. So, if you normally trade like this:
Buy 10
Buy 20
Buy 30
Sell 60
…it would be much better if you instead issued your signals like this:
Buy 1
Buy 2
Buy 3
Sell 6
"Well," you say, “that’s nice in theory, Matthew, but my C2 trading account has $200,000 dollars in it. If I issue small trades like that, I’ll barely make any return on my account equity.” To which I reply, “That is the reason why you are allowed to ‘rescale’ your system. That is, you can ‘give back’ extra capital.” This allows you to adjust your system to have less capital, so that you can issue smaller trade quantities in your signals, which - in turn - allows you to attract more subscribers with smaller accounts. The “Rescale” feature is available to system vendors under the “Admin” menu of their system page.
