Trading is neither gambling nor an investment. It is speculation. If the speculator is intelligent then it can be compared to intelligent gambling. Investing is based on "ownership" and the rewards thereof. Gambling profits derive from pure chance. Trading is based on speculative ability, work, and smarts.
All of these activities involve varying degrees of chance, uncertainty, the risk of loss and the potential for large gains.
"careful consideration and an eye to capital preservation at every turn. "
This statement sounds to me like your risk appetite might not be well suited to the realities of trading.
----
Yes, there are ways to make the site have better standards. But then 99% of the systems will be gone.
Better systems might come about by:
1. Vendor must submit a form filled out in a PDF or word format. Filling out long forms can be really annoying. With their name, address, and detailed system description.
2. Making any system with negative realism factors hard to find unless the vendor submits a verifiable track record.
=====
It should be obvious anyway the poor systems pay for the site. The best vendors reap all the money. Without the poor systems then the site would not be profitable.
Hmmm… interesting ideas. I can’t wait to see what others have to say about this.
As to what it takes for this site to be profitable, I wasn’t aware that Matthew had shared that with anyone. Perhaps you have some prescient knowledge about the Business Model for a site like this?
I DO know that if C2 were my business, I would NOT want it known as a place where 95% of vendors and Customers fail (I’m just using Gilbert’s numbers for emphasis - don’t shoot me on this - it doesn’t matter if the number is 95% or 75% - if it a HIGH number and it is - it’s harmful to the reputation of the site and the Vendors who sell their wares here). That’s a real problem. Matthew gets it, because of his decision to start cleaning up the site.
All Vendors on this site ought to be concerned about that failure ratio, too. I repeat - this is an opportunity for ALL of us to do something to improve the site - even though many of us have different objectives. Good dialogue.
The only thing a back test might be good for is to demonstrate if an approach to developing a good system is worthy of further study.
In other words a back test can be the starting point but not an ending point in the development of a good system.
Interesting how some venders cant get this even after a number of failed or random results from systems developed using back tests.
The real time exceptions, luck or many tries.
The only problem I can see with a blackout period would be for any traders who may have developed or choose to develop a system for picking good young systems, or young poor systems to trade against. It is not a question of whether or not this is a good idea or even possible, but rather an issue of freedom to choose.
Hey Curtis,
I just thought of something else - Thank You for sharing your views about Speculation. I don’t agree with them, but I appreciate the fact that you at least stated them. (How many others out there agree with Curtis?)
Since your system probably reflects your philosophy, would you be so kind as to update your system profile and add that part - make sure to highlight the word “speculate”. This would be very helpful to potential subscribers when they run across your system.
And - the other thing that puzzled me - you seem sure that my Risk appetite is not suited for this site - actually - I think I have found several products on this site that might meet my needs. Now that I know that your system is based on Speculation - unfortunately yours isn’t one of them. But I’m sure there are plenty of “Speculators” out there. So you are guessing what drives me - you don’t have nearly enough data.
A word of friendly advice given with the best of intentions - many vendors typically talk about Customers LIKE THEY ARE QUOTING HARD GATHERED DATA. When in fact they have none - they are merely guessing. Obtaining hard data about who your Customers are, what makes them tick, what is important to them, how they buy and why - this is invaluable information that almost always leads to higher sales if used properly. Guessing doesn’t.
I’ll look forward to seeing your system profile updated soon. “Based on Speculation” - that will helpful.
Thanks for taking the time to chime in.
There are several problems with this approach.
1) Back-tests and walk-forward tests can be fabricated just as easily as baseless claims.
2) Back-tests and walk-forward tests can be manipulated and curve-fitted, so there is no special rigor or objectivity present in them.
3) Many vendors trade manually, not mechanically. Do you propose banning them as well?
4) Isn’t the first thing you must tell your clients that “past performance is no guarantee of future results”? How much weaker does that get when it changes to “back-tests and walk-forward tests which produce hypothetical results are no guarantee of actual future results”? Yes, I agree. It’s meaningless.
5) I agree with Curtis below that imposing these kinds of up-front barriers would probably deal severe damage to C2’s cash-flow.
6) Matthew Klein is constantly pointing out how limited his resources are, which is why he won’t make changes called for by the users unless it’s a bug fix. Now you’re proposing a whole layer of regulation on top of what C2 already does. Do you think that’s feasible? It would be more feasible to have everyone become RIAs, or only allow qualified investors to trade C2’s systems–except that would destroy C2 in the process.
In short, I agreed with your first statement. Everything a subscriber needs to know is present in C2’s stats. There’s a certain elitist attitude here that the new subscriber must be protected from his own inexperience. I sympathize with that view. But we are capitalists. Barring outright fraud (and yes, there are select cases of that present on C2), we should allow subscribers to speculate on whatever system their hearts desire, no matter how risky or structurally unsound they appear to our eyes.
The only argument I profoundly agree with is the idea that subscribers should not be allowed to subscribe to a system which doesn’t have a statistically significant number of trades/number of days of existence. How that is calculated is above my pay grade. But the reason why this issue is so important is that it strikes at the heart of C2’s mission, which is to provide objective statistics about the systems traded through it. If the statistics are unreliable, then C2 itself loses its merit.
Speculation does not mean “random gambling” and trading is not investment. I advise you to take things slowly as you learn more about this game. I think my system description is one of the most accurate and honest of any, and I’m not convinced that adding anything extra would be beneficial but I will consider sharing more of my views on the market in my forum over time.
One big clue that should enlighten a lot of about the trading game is the word: futures. Traders take on RISK based on SPECULATIONS about the FUTURE. I get so tired of promoters claiming to teach trading but duck-and-run when it comes to predicting the future. I echo Frazetta’s sentiment on artwork, “If you have nothing to say then get out!”: if a trader has nothing to say about the future then he shouldn’t be in the game.
In fact, every trade can be boiled down to either speculative or historical in nature. Keep in mind that some of the biggest and most successful traders of all times were speculators. That should provide you another clue.
Matthew,
I don’t think it will work. The problem is that approximately 90% of contributors to around-trading forums don’t worth even reading. It absolutely doesn’t matter how they are polite. Simply, they just have a lot of time on their hands and practically no touch with trading reality. So enforcement of moderation is already outdated technology. Better way is to use community opinion about what worth reading or community rating system for posters. It’s something similar to current “My analyst” rating. Add opportunity to filter out C2’s forum content that is based on community rating in personal preferences and you’ll have better policeman than one hired moderator. Posts with very low rating might be deleted automatically.
Just my 2c of course,
Eu
I have no data to back this up, but I’ll wager that most Customers who subscribe to systems at this site (and others), don’t consider themselves Speculators, nor do they expect and understand that Speculators can lose their money at a higher rate than most realize.
I suspect they are coming to this site to make some aggressive investments, but aren’t prepared and willing to lose a significant portion of their capital while here (or anywhere else).
As for Speculators being some of the biggest and most successful traders of all time, what are we talking about…??? 1 out of 1,000 out of 10,000? out of 1,000,000? What are the odds of any of the average Customers who come to this site with their nest egg of say, $10,000 or $20,000 becoming one of the most successful of all time through Speculation? It is a fool’s game. It’s like the chance of becoming an NBA player or developing financially successful software - the world is littered with THOUSANDS of programmers who thought they had the next BIG Thing.
It will be interesting to watch over time if you start trading your own system with your own money. It’s a religious experience. Good luck.
There are better messages available that might induce more Customers to come to this site and spend money here.
Skip,
I would not agree with applying corp. world principles to trading. You always make the same mistake when you assume that profitability of trading depends from customers. The assumption is correct for any business except trading, so your major point that a system vendor has to do lap-dance for customer is wrong, because main profit comes not from subscribers as you think, but from the market (smile) In general I have observation that “writers”/“teachers” are unprofitable in trading for their followers, but they are profitable for themself. (double smile)
In two words C2 represents world of start-ups and venture capitalists. When VC(subscriber) is trying profitably participate in others intellectual property by providing some capital as price of the participation. However owner of the intellectual property is able to have a profit without VC. There isn’t direct dependency as in Business/Customer business model.
Few times I proposed to use C2’s system vendors statements for confirmation of their system workability. Simply it will create some corner in C2 with systems that are confirmed by statements. In the case all the backtest/blackout periods/so on aren’t necessary, because behind C2’s picture is a system vendor money. It would give a choice to C2’s potential subscribers to participate in high risk, not confirmed by statements systems or choose more expensive, but with a system vendor money at stake systems. No circus/known risks (smile)
Eu
You would be better off to listen to Eu (a smart man) who is basically saying the same thing as me. You think we are playing a fools game? in other words gambling? Not all of them. You should learn how to pick wining systems, then, perhaps you may have a chance. Else, you would be gambling and also the reason why I think you will never become rich…
Don’t pay any attention to this, EU. A feckless post if I ever saw one.
I think we have drifted off-message in this thread - I am responsible for some of this - so let me take responsibility for that.
To Eu - my comments and thought processes ARE directed at Vendors who are trying to build a business from generating subscribers (because they just don’t have the capital to trade themselves quite yet). I certainly recognize that there are Vendors here who are more interested in trading their own system and I wish them the best.
So - my corporate analogies are directed solely to certain types of Vendors.
To Palsun, and to Curtis - some advice … learn who you are talking to before you jump to conclusions about them. Every one of Curtis’s conclusions about me has been wrong today, and Palsun’s are as well. I’m the only one who can say that. This goes back to my comments about getting REAL data about Customer’s and not guessing about who they are, their intentions, their experience, their background, their goals. Gentleman - you’ve been wrong today - more than once. If you took the time to find out more about me the Customer, you would have learned that. You have once again just proved my point. Scroll back through some of the dialogue in this thread - wherever you see such conclusions, substitute a different opinion or conclusion.
With that, I’m done. Matthew will do whatever he chooses to do with his business - it’s his perogative and I respect that. I have just been trying to generate some stimulating conversation in an attempt to draw out some opinions that might be good for the site. Sad that this site suffers from a lack of Customers who wish to publicly comment. It’s always the Vendors. Why do you think that is…?? The silence is often deafening…
Caio.
PS: Also, the Sharpe Ratio is perfect to break a tie in the overall Calmar Ratios of systems (C2 score)…
I’m not making any conclusions. I just read what you said and provided my opinion. Perhaps, you are reading more into this then there really is or perceiving myself as an “authority” – which I’m not. You seem to see things as being “either/or”. An expert can be a student and a student can be a teacher. You use statements that give me strong consideration such as “nest egg”. This is why I provided the advice to go slow. I doubt any honest vendor would want someone coming to them with their “nest egg”.
I have some ideas about ways to trade systems here. Perhaps if you focused on how you can take responsibility for your own profits and losses and still trade someone else system then you will make more progress then trying to get vendors to see things your ways.
I think you would make a lot of progress if you took my advice about how to find ethical vendors from previous thread and then followed those leads up with a thorough analysis. One possible way to trade an account here would be to rebalance it. You take a small portion of your money and you follow it with the system and at certain key points in time then you re-balance your portfolio: you take the gains out and apply them to a long term strategy. The key to this would be the system selected, a bit of chance, and your re-balancing time. This is beyond my knowledge.
I appreciate the opportunity to reach out and provide my abilities to others via C2. I, always, try to be respectful to others and to the opportunity provided here. But, I do think some of the claims are over the top, such as “build your own hedge fund”. I would guess, that many system developers, would find it difficult to find the proper way to mix and match multiple strategies to perform an optimal allocation. I know I, myself, would.
If you run a business you will learn that you can’t cater to every single customers wishes either. A business has to make a decision about what things to support and what things are important versus not important.
Good luck. Don’t think the world is so much “against” or for “you”. I merely used a heuristic, a very quick way to make a decision, and to provide feedback based on what I read with no concerns as to the “ultimate truth” or reaching a “conclusion”.
"I have no data to back this up, but I’ll wager that most Customers who subscribe to systems at this site (and others), don’t consider themselves Speculators"
Undoubtedly true that they don’t think they are, but that doesn’t mean they aren’t.
Ask 100 people how good a driver they are and 80% will say better than average. People like to see themselves in a positive light. It’s a natural human bias.
"In general I have observation that “writers”/“teachers” are unprofitable in trading for their followers, but they are profitable for themself. (double smile) "
Indeed. The best trading coaches in the world do not trade for a living.
Those who can, do.
Those who can’t, teach.
And those who can’t teach, teach teachers.
No worries. Best to you as well.
As for my own account, actually I’m very happy with it over the last few years. I have been trying to speak as a collective Customer in many cases - if I had not, perhaps many of these topics would not have seen any discussion. Customers just don’t often get heard from on this site. That’s too bad.
These are traders on this site, there are aggressive investors, there are those who seek systematic approaches that are repeatable and there are those who are happy to try and “shoot the moon”. And there are those who are trying to build a business selling subscriptions and those who aren’t. Some of us look for annual returns that are modest, but safe - others would never settle for anything that didn’t turn at least 300% - even if they lose their whole wad (and they very well might do that).
Matthew is trying to clean up the site - for financial reasons. I thought that since this closet door had been opened, it was appropriate to plunge into other related areas that might also improve the site - for all.
I hope that if one sits back without prejudice and just thinks about some of my arguments, and everyone’s comments as well - they will appreciate them for what they are - revealing and hopefully constructive in the long run.
Now it’s time for dinner…
The generally held belief is that 90-95% of traders lose their money. But one can imagine that of the newbies coming onto this or other trading sites, that many to most will expect to be in that 5-10% of winners.
In reality, many newbies seem to expect to come into C2, pick a system for $75/month, and let the riskless 1,000% annual profits to rapidly accumulate into their $3,000 account.
