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Payoff Matrix and Backward Induction both TOS now


#1

Hello,

Payoff Matrix and Backward Induction are both TOS (trades own system) now. Backward Induction started as TOS and Payoff Matrix got approval after the close today.

The TOS on both is broker transmit which means I can scale at exactly 100%. No more and no less. There is another TOS which you follow your own strategy like a subscriber would. With that one, you can choose to follow at 50% or over 100% or whatever you want. With TOS broker transmit, I am exactly at 100%.

The TOS badge does not show up until you have about 5 or 10 trades and you will at that point see the badge. But I am already taking trades in my personal accounts (two different personal accounts) for Payoff Matrix and for Backward Induction. Payoff Matrix just got the approval today so no trades in my actual account have been taken yet but going forward all Payoff Matrix trades will be from my personal account. Every single trade Backward Induction has taken has been in my personal account.

Here’s the difference between the two strategies. Payoff Matrix takes trades that are generally 3 or 4 contracts and sits in those trades on average for 3 1/2 hours. Backward Induction is designed to have quicker trades although we may sit in trades longer occasionally. All trades are closed by the U.S. CME close. I am always at my desk if a trade is on or an order is pending. Backward Induction will mainly trade ES and sometimes NQ and CL although all futures are available to trade. Payoff Matrix will trade all futures.

As far as risk management, nothing has changed. I risk on average 1% to 2% of my capital with an absolute max risk of 5%. In dollar terms, that means the average risk would be $500 to $1000. Every single position has a stop. There’s never an excuse why there’s no stop. There’s no martingale or any other monkey business. You will never hear that the stop is on a server ready to kick in. You will never hear that the stop is a “mental” stop. You will never hear that I hedge and that’s why there’s no stop. You will never hear that I will give you the stop the day after we get in. Every single position has a stop attached to the order. Period.

Generally, Backward Induction will have lower risk than Payoff Matrix with trades sometimes only risking a few hundred dollars but does have the right to risk just as much as Payoff Matrix. As far as the 5% absolute max, I have never take a trade with that much risk. It has to be really amazing. The most risk I ever put on in Payoff Matrix was 3.71% and that was the trade from 1/16/2018. I got the same signal across the entire equity complex. When everything lines up like that, I may push the risk a bit. That signal generated in ES/NQ/YM/and RTY. So a 5% trade has not been put on as of this point. That makes it even more unlikely that Backward Induction would take a trade with that much risk if Payoff Matrix has not ever done so.

Lately, Payoff Matrix has not taken many trades due to the increase in risk. Now that Payoff Matrix is TOS, it will take some of these quick trades if there’s no “normal” trades available so we’re not sitting on our hands. Here’s why this was not possible before TOS. To enter a trade, I would go to C2’s website. Find the symbol. Enter the price. Enter the stop. And hit submit. That’s not an issue for a trade lasting over 3 hours. If the trade lasted all of 3 minutes as a “quick” trade, the opportunity is gone by the time that process is complete. The way I enter trades now in my personal account is through a DOM (depth of market). It’s literally 1 click to enter and 1 click to exit. Much easier logistically. Again, for Payoff Matrix the priority is to take the “normal” trades it takes. When they are not available due to higher risk, it will take quick trades like Backward Induction to fill the gaps and try and make some money instead of doing nothing. We will see a higher frequency of trades for Payoff Matrix going forward.

It is also my goal not to be in the same trade at the same time in both strategies. That does not mean we will never be in the same trade but it’s a priority not to be. This is due to having some of the same investors in both strategies. There’s no point in doubling up the same trade on them.

This now means I have skin in the game. If investors make money, I make money. If investors get stopped out, I get stopped out.

If you have any questions, please send me a private message.

Good day


#2

Please post the link in here to make it easy everyone see ur strategies


#3

Hello @sam_w,

This might sound funny but I don’t know how to. I’ve seen people do it where they post and a little snapshot of the strategy comes up. I’d be happy to if anyone cares to inform me how.


#4

#5

Thank you for teaching me how @PippyLongstocking


#6

Pippy how do you do that? I do not know either. I just always most the URL but your way is better.


#7

This is just general questions. Which broker are using for both strategies? The TOS is 100%, as we can see right now, the payoff matrix has balance $60k and Backward Induction has balance $51k. Does those balance in your broker as same as with the balance at C2. Thanks.


#8

AMP Futures. I have more in my accounts than the balance reflected in C2 for both. I have 6 separate accounts with AMP Futures. I also have accounts with other brokers as well.


#9

@GREGGL, you just copy the fully qualified URL of the web page for the system into the forum message and it fills in the image of the profit curve, etc. Try it and you should see the image appear in the preview window on the right hand side. That’s what others will see when it is posted. The image will be a hotlink to the URL you entered in message.


#10

@O5355p
Thank you for the clear explanation of your two strategies.
And thank you for offering your trading skills on Collective2.
We need more traders with such a strict risk-management.
Hope you’re gonna stick with C2 for many years to come.


#11

Hello,

Payoff Matrix and Backward Induction both have the TOS (trades own system) badge now.

Good day


#12

So before you were TOS, you trade 3-4c of ES, now that you are TOS , you trade 1c of ES.

So you built up a track record demo trading, then reduced the risk when real money is involved. I’ll check back in 6 months.


#13

I went TOS because the risk was too high on 3 or 4 contracts and I went for a period without many trades. Going TOS allows more trades. Once the risk is back at normal levels I’ll be taking the same 3 or 4 contracts. 1 contract or 3 or 4 isn’t a function of TOS or not. The contract size is only determined by the stop and risk. TOS logistically allows for more trades.

Good day


#14

Sir, a response to the number of contracts you choose to trade wasn’t required. The statement is ridiculous. A complaint of less contracts. Less risk. Traders are not mechanical. All trades are different. Only a foolish trader sees a setup and determines the same risk/reward for all trades. Some trends are stronger than others. Some entry times, due to market conditions, more or less risky. It’s the duty of the trader to make this determination. That’s what makes traders different.
You are very good. The best I have seen here.
And this crap about I’ll see you in 6 months. Really. What’s funny is, Wall Street firms with a decade of history, can suffer a meaningful loss next month. There are no guarantees in trading profitably. I don’t care if you have 2 years here and a decent drawdown, you could crash next week.

They complain about TOS. Which in truth is useless. The markets don’t show favoritism because a guy goes TOS. The psyche of the trader. The discipline of the trader. The ability to predict market movement with a high level of accuracy. These things make for good trades. Not TOS. Just means you can lose your money also. Personally, it doesn’t make me feel better, safer, or protected from loss, subscribing to a TOS strategy. Doesn’t increase my return on winning trades. Doesn’t replace the loss in my account on losing trades.

Good day Sir.


#15

Your post is ridiculous.


#16

Totally agree. I would much rather under leverage than over leverage and let me as a sub decide how much risk i want to take. Me personally, I will not sub to a strategy where the gains being made are compounded in to the next trade. That certainly makes the graph look impressive but as I have learned 1 bad trade is all it takes to wipe everything out. Just look at what happened in Feb when a lot of the volatility strategies were hit and went under. If those same strategies were not compounding the gains into the next trade some of the subs may not have lost everything. That’s just me though; I am sure some will disagree.


#17

As a sub, we have to be skeptical, we got real money on the line. Too many system went bust during the crash last month. So many system promoter with no track record acting like they the top Wall Street Trader.


#18

Just a quick question…from your strategy description, you stated that target/stop is 1:1, 1:2 or 1:3. Am I understanding you correctly; the target (or potential profit) is bigger than protective stop? The reason I asked is that you had two recent $1.2K losses in ES and the winning trades were much smaller. Please explain. I want to know before I subscribe. Thanks!


#19

My target yesterday was 2814.75 and I got stopped out instead.

In a 1:1, the left side is the risk and the right side is the reward (risk:reward). I don’t take inverse risk trades as the math doesn’t work. If I achieve 1:2, I risked 1 and won 2. The trade from 3/05 the target was 2666.50 and that also got stopped out.

The trade from 3/13 the stop was 2793.25. The target was 2767.75. I got out early and it went to target. There was unexpected news (Rex Tillerson speach conference) and the market could have gone either way after that news. I got out based on reaction of the news and left about 10 points on the table. Without the unexpected news, I’d leave the trade on.

When I take trades that have multiple contracts (3 or 4), I scale out. Once I scale out, I move stops to lock profits and I keep moving stops as certain levels are breached. Example would be for the first contract to come off and stops to be moved to break even for the remaining 3 contracts. Then if another contract comes off at another level, stops would move again protecting more profits. In those situations, we still have a position and based on stops moving are at worst guaranteed a profit even if stopped out.

Good day


#20

1-Star rating for Payoff Matrix, other strategies managed by this developer are not recommended also.