New martingale system avoid like the plague

Just saw a latest 5 stars review for a new stocks system . I am appalled by this review , the system isn’t called double down for nothing , its a martingale system , pure and simple , and guess what its trading ? Stocks , yes the system is using martingale techniques in trading stocks and not only that , its using these techniques in shorting stocks ! What could be worse , seriously ? . And the reviewer did put aside a $90K for the system .

The system developer claims its not a martingale system but rather a scaling in system , now call it what you want scaling in or martingale doesn’t make a difference , just look at the track record and you will see how many times the developer may scale in a position - shorting stocks - ! Which is against what the developer has been saying in his description : “Positions, however, are often scaled into through 2-3 tranches " , and the developer continues to say :” trade duration could be an hour or a few months" , in another words he is saying i will average down and wait until the trade goes in the black . Imagine shorting volatile stocks over and over again and then waiting months for the result !.

The reviewer ends his review with : " I feel we are seeing the making of a Super Star … i love ya…" and i will say we are seeing a disaster in the making here .


Where are the reviews now for the beta site?

Under “Follow strategies” …

Hi. I signed up for Texas Doubledown about six weeks ago and am very happy with the system. Brett will scale in and out of different stocks to take advantage of market conditions. It took me awhile to get used to his methodology, but I have made twice as much with his system as I have with any other system (many of which I lost money with). Very few days that I do not show a profit because he has both long and short positions open at all times. He monitors the positions very closely and when I have had questions has been very quick to respond. All systems should perform as well as this one. I would rather have a professional trader who is responsive to market conditions and acts according and that is what I get with this system. I like it well enough that I have also subscribed to Commodity Long Term. I will report back in six weeks to comment on how that is doing, but I am confident in it’s potential performance and who is at the helm. Thanks Brett.

1 Like

All I want to say at this time is that I wish there were some more good and experienced discretionary traders on C2. It seems that most of the mechanical system vendors use C2 just as a platform for forward testing their systems.


I would rather say we need disciplined traders …

I’d say its all about risk vs reward. There are both mechanical and discretionary systems that make money. Mechanical systems are more easier to evaluate. The point is that a system that you find too risky maybe fine for someone else.
Its important to be diligent in evaluating the system information and you can glean some of this from the statistics on this site. If you are not sure, learn about how to evaluate a system from books by Pardo or Stridsman and ask for more information from the vendor before signing up.

1 Like

Hi Andrea,

You were once a subscriber of Zakum and left, I think, for possible greener pastures at Texas DD. I was wondering when you’re going to make the 6 week update report and if you still feel as positive now as you did on May 7.

P.s. You are, of course, always welcome to return to Zakum, which as you know, NEVER averages down open positions. :slight_smile:

Hi Guy, I did, in fact drop Texas DD. At the beginning, he was responsive to questions, not at the end. Fortunately, I took some profit, quit the system and watched as it continued it’s downward slide. Maybe if you have a $100,000 (what he started with), you can ride those peaks and valleys a little better, but even then, adding on, and adding on, and adding on (time and again) to try and keep a position above water eventually just felt like “death by a thousand cuts” and was just a lot of wasted commission for the brokerage. His “contrarian approach”, ie. opening positions opposite of what the market was trending worked in a few instances, but more often resulted in losses, plus at the time that I cancelled
, ALL of the positions were SELL while the market continued to rise. NOT GOOD. The other issue was that they were all in the same market sector, no diversity.

A very dangerous trader behind this Texas Double Down system. Right now his model portfolio contain a biotech stock position that has a market value of almost $200,000 which he is shorting. The problem is that his entire portfolio has a market value of only $130,000. So, he used all of this $130,000 plus borrowing another $70,000 on margin to short this stock. Imagine if one day you wake up hearing that the company was being bought out and you happen to short this stock what do you think will happen to your portfolio? a biotech buy out can easily increase the price of a stock by 50%. So, if you happen to short this stock you will lose $100,000. For a portfolio of $130,000, a $100,000 loss is equivalent to a loss of 77%. Or if the company happen to have great earning or make a breakthrough in drug discovery, its stock price could easily increase by 20% to 30% and if you happen to short this stock your loss would be anywhere from 30% to 46%. Now why did he build up such a huge position in a single stock like that? it is because of his repeat averaging down on this stock which over time balloon the position to such a huge number. Experts recommend that you should put no more than 2% of your money in any single stock or 5% if you are aggressive. This guy put 153% of his money in one single stock. I would characterize this guy as either a charlatan, because he seem to be clueless what he is doing, or a gambler because of his reckless disregard for his client money or both.

What else can you conceivably use C2 for? :slight_smile:

C2 is a great data vault that makes it much harder to delude yourself into thinking you’ve got skills for active management. Beyond that, I don’t know what to do with it. If I remember correctly, C2 has over 50,000 active members. Most of those members are not exactly made of money, so if I had any subscribers on C2 (I don’t, and I really, no, really, don’t want any, unless they are willing to stipulate that they are an accredited investor), I’d be losing lots of sleep over what I charge them. All in all, the value of C2 as a prospecting tool is modest at best…

1 Like

Exactly. Subscribers seem to think that the system developers are making a fortune. My system, ATPro, ranks #2 of all Futures systems with over a one year history with a 48% annualized gain. However, I get little or no interest in the system.

C2 subscribers seem to be no better at choosing trading systems than they are at being a trader themselves. They also have no clue that professional managers get paid 2% of assets and 20% of profits. They think that $250 per month is a big deal when daily volatility can be many times that amount.

That said, C2 and C2Pro are excellent platforms to showcase performance and trading ability. Hopefully, that will lead to better things with accredited investors.

1 Like

Its a matter of supply and demand , if our systems are attractive enough we will get subscribers period . 1+1 = 2 . Its impossible i repeat impossible to not get subs unless c2 has no traffic at all .OK and profitable isnt enough it has to be attractive , work on it .

It isn’t supply and demand, but rather risk avoidance. It is more attractive for the subscribers to pile into cheap systems trading a once in a generation bull market in stocks. For most, this won’t end well.

From the Grid, systems with over one year record:

ATPro vs 76 Futures systems: #2 ROR, #4 Sharpe, #4 Sortino
ATPro vs 686 Total systems: #7 ROR, #20 Sharpe, #26 Sortino

Most of the leading systems are only trading stocks or stock indices, while ATPro is diversified. A record of less than one year is not statistically significant.

I have tried larger and smaller account sizes, shorter and longer trials, higher and lower fees,and advertising. It doesn’t seem to make much difference. As you say, maybe C2 just doesn’t have the traffic.

Apparently its not attractive enough for them , attractive = subs . Fact .

What is attractive to most subscribers is a simple system that trades stock indices or gold, and is also cheap. My criteria is sustainable system that provides compounded long term profits. Few C2 systems meet that standard.

One of the issues of your futures system it doesn’t trade at fixed size , example 1 lot …

Trading a fixed size is an example of a simple system. I trade what my research shows the best results. In futures, contract sizes range from $10,000 to over $100,000. What money management strategy would use a fixed size?

You are not trading at fixed size in the same instrument , ofcourse you can do that but its a turnoff for most subs , difficult to scale and manage - unlike stocks systems - .

You are correct. Our disagreement is over what system sells best and what system has the best results in the long run. I choose the latter.

1 Like