The opinions expressed in these forums do not represent those of C2, and any discussion of profit/loss is not indicative of future performance or success. There is a substantial risk of loss in trading. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. You should read, understand, and consider the Risk Disclosure Statement that is provided by your broker before you consider trading. Most people who trade lose money.
wow that sucks. but i guess it’s similar to selling a product in the market, sooner or later there will be copyright infringements that you need to fight.
Honestly, I think it should be easy for C2 to scan trades from strategies and if they are exactly identical for a given sample, it should trigger investigation.
The only remedy for this is to charge $500 and make it worth your while.
Even with daily reports all someone would need to do is AutoTrade to get signals. I know of one person that I would actually consider a friend now, that informed me he was using the AutoTrade feature to manage trades for a hedge fund he runs.
C2 has been very kind and done what they can to prevent these things, but I think it is hard to 100% prevent someone reselling, sharing subscriptions, etc.
Can you explain why that is the best solution?
Thank you.
It would force those who copy to pay more.
Honestly this issue does not bother me as everything on earth is borrowed including the indicators leaders use to profit. Coke Pepsi RC Cola…
Maybe C2 should consider this idea.
Thank ETFCapital.
This last year has been quite painful for my strategies, and my strategies are currently in their worst drawdown since inception. Human tendancy is to want to make massive changes. I don’t think that is the right move. Instead I think there are a few important lessons.
Always Assume the Worst Drawdown is Ahead of You
No matter how good a backtest is, it can’t perfectly predict the future. It can only show you some things that may work or happen. In the chart below there are the backtested drawdowns of the current strategy rules. The red line simply marks when I started live trading the strategy myself. As you will notice the worst drawdown occurred after live trading started not in the roughly 15 years before. This is a good reminder that no matter how good a backtest is, a sound expectation is to always assume the worst drawdown is yet to come.
Backtests Still Give Useful Information
Though previous results don’t guarantee future results I think they still give useful information. For example, the backtests of the 2008 crash and other periods are what helped the strategy do pretty well during covid when it was actually trading under Patience is a Virtue.
Future Expectations
I do not know how my strategy will do in the future. It is possible that it will crash and burn. It is also possible that this current drawdown is one for the record books that isn’t exceeded for a very long time if ever. I do not know and never can. However, I will continue to invest my money using rules based algorithms that I believe give me the best chance of success.
Good to see some honest reflection. The current market conditions are unique. We haven’t experienced anything like this for decades. It is a difficult market.
If you are a long-term investor now is a great time to be investing. When I look at the graph below I see what may be a great buying opportunity!
PS: Patience is a Virtue has beat this benchmark over the period it has been around even though the benchmark has a 22.7% CAGR at the moment.
Could you please elaborate ?
This buy and hold approach is theoretically sound, assuming the trader can stomach a 84.92% drawdown.
Is it thou? I feel like this market downturn is somewhat expected.
That’s why I developed the bear market system. https://collective2.com/details/139373540
Inflation is 9.1% + supply chain is still silly. Home prices are up, lunch specials are up, 3 tacos or 1 burrito is like $15 now.
But the fed dont wanna scare the market and cause a recession because that would actually help them achieve their goal. But how else are we going to kill inflation?
Businesses stop spending? Consumers stop spending?
Until inflation is curbed, I don’t see us being bullish.
I’m not intending to imply it will immediately turn around. But if this benchmark has had its worst year since 1978 then at some point we are likely to get a reversion to the mean unless we all die in a nuclear apocalypse etc. It may take a few months for a 60/40 mix to start recovering or a few years.
I also believe that the market will at least reach the break-even point (the zero line on your chart).
So yes, the upside potential is real.
I have a new video I think it is worth a watch for anyone interested in my strategy. No doubt this year has been terrible for my strategy! I apologize I couldn’t have been better. I have made some improvements, and I really think this strategy is very unlikely to see a drawdown like this for years or decades. As I have mentioned, the biggest problem this year has been that it is one of the worst years when looking at stocks and long-term treasuries combined (two of my main assets). Unfortunately, I originally designed the bond signals entirely based on stock market metrics. In the long long run I still believe that is probably going to give a higher return, but the drawdown cost is too high.
Even though really bad bond markets like the 1970s and today are very rare, I would like to better control drawdowns when they do happen. This is why I now have more rules built in to look at the performance of bonds themselves and allow the algorithm to move to UUP and UDN when necessary, which also have direct indicator filters.
Fortunately, all the other assets already have direct exit indicators. It was just bonds that relied only on the indicators of other assets (stocks). Again, in the long run I think that likely would produce a higher return, but just in case something crazy happens the bond portion now has direct trend following and sentiment checks etc. Every day I see TLT/TMF still dropping, I keep thinking this is fantastic for us long-term. In hindsight I certainly wish I had more strict bond rules. In the long run I think if you mix patience, leverage (in reasonable amounts), primarily only buy appreciating assets (stick with long-term trends), diversify, and have rule based exit and entries you will come out way ahead. So, I will be sticking with it and hope you do too subscribers.
Thanks, Interactive Assets, you have been around here a long time and I have always appreciated your directness and honesty. This bond market has thrown a lot of people for a loop, I use another well-known service that started buying TLT at $140 - and held it for months even though clients were complaining it made no sense since yields were shooting up. They kept insisting the Fed would have to pivot soon to avoid a recession. Well, when TLT dropped below 100 almost a year later, they changed their tune. Without admitting it as you do here, they had just quietly stopped trading it and then a few months later bragged about what a great move they made getting out. Really aggravating.
Anyway, thanks for your update and I wish you the best with the changes you are wisely making!
Historically, the famous 60/40 (stocks/bonds) approach you are personally using has been a solid performer for decades.
However, when both bonds and stocks go down at the same time (clearly the case now), this seemingly foolproof strategy takes a serious beating.
These rare events do happen from time to time (1931, 1941, 1969, and 2022).
Anyway, let’s see how long this exceptional situation will last.
Good luck.
Times like yesterday and today are great examples of the downsides of being an active investor.
For example, I was bond heavy going into yesterday. Bonds did terrible. Algo exits bonds. Bonds do great today. Algo enters bonds again. You can of course change the asset and the timeframe for any number of things and the general idea is the same, whipsaw will happen.
This is one of the many reasons why I think most people would be better off being passive investors. However, I think there is a place for active investing, especially when using leverage. This particular time it did not work out, but I do believe the algo rules are worth sticking to despite the fact that there are many days just like this.
If we had another year of those kinds of returns from both asset classes, the return expectations the following year would be quite good I would assume. Especially from bonds.
Patience is a Virtue is now 4 years old with a 36% annualized rate of return!
With a 54% Drawdown, when your last 3 subs quit you’d scrap it, who are you kidding. But congratulations.
