In the last few days, I noticed that the Compound Annual % of my system (VN Forex Club) is unchange which is 279.2% (and I don’t know when was the exact time it started unchange) while the equity keep increasing. Also, for some reason my C2 score is going down a little bit while the performance of my system is getting better. Can you help me understand this?
I have spent some time pondering the C2 ratings. I believe the C2 rating takes into account how much risk you are assuming. Looking at your recent closed trades your risk level is high.
Also, keep in mind that C2 Ratings are percentile scores – meaning that you are ranked against all the other C2 system in the C2 universe. Thus, even if your system does well, if other systems do better, then your score may decline.
Thanks Steve and Matthew for your reply! I understand how C2 score works now but what about the Compound Annual %? Why it unchange when the equity is increasing?
That the CAR doesn’t change is actually a good thing. If your equity rises with the same rate as it did before, then the CAR won’t change. It is designed to stabilize in that situation. It depends on your current equity and the number of days your system is active, and both have changed, so the outcome can very well be the same.
The ratings reflect your rank among other system vendors, so it can change when you do nothing or when you make good trades, simply because vendors performed better than you. (This does not mean that I agree with all ratings, but this is not a reason to disagree with the ratings).
Thanks for your reply! Yes, it can be the equity rises with the same rate as it did before. However, I doubt that the equity and the number of days my system is active were rise as same speed for days or even over a week. I hope that Matthew will have some time to double check this number and confirm this if it is the case.