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.
Now that developer fees have been increased, I think it is fair to ask the question: What is Collective2 doing to advertise and promote the site? Is the pool of subscribers growing or are the Trade Leaders all fighting for a share of a limited supply of paying customers? Is the C2 business model to profit from subscriber income or from developer fees?
I do not remember seeing any pop up ads for Collective2 for years. Have there been any recent articles or publicity? Googling Auto Trading does bring up an ad, but it doesn’t stand out from the other offerings.
I would appreciate feedback from other developers and from C2.
You didn’t ask for feedback from subscribers, but I give it to you anyway. I am a subscriber only. Not a developer.
Apparently C2 not only increased their fees to you, guys, but at the same time (??) it decided to limit autotrading to 500%. No reason is given (yet, I asked the help desk.) I guess they want me to subscribe to more systems instead of scaling. This will not happen, not because of the subscription fees, but because I subscribe to systems that I analyze both for the stability / profitability of the system (by my analysis and not by C2 stats) and for my ability to make $$. Using my custom margin calculations, portfolio analysis, etc.
If I have $1M (hypothetically), I may subscribe to 10 systems and allocate $100K to each. The systems I do not pick based on “recommended investment,” as a matter of fact, I like lower entry points as I can pyramid faster. I will not pick/manage a 20-30-50 system portfolio instead.
Bottom line (and my answer to your question): IMHO you guys, developers, will compete for an even more limited supply of paying customers because the ones with (a hypothetical) $1M to invest will go away.
Well, it is up to you what you want to achieve. Now you heard the other side of the story. You may regret to get what you bargained for.
I didn’t participate in the discussions, but I am not sure I understand what you want. You want lots of subscribers, because this is how you make $$, but you want them to behave to your liking? Maybe an acceptance interview too? May I wear red socks while trading? Seriously: if your vehicle is prone to slippage (forex is not, lots of futures are not, large cap stocks are not, limit orders are not, stop/limit orders are not), then you or maybe C2 in a general manner should take care of this. Breaking it up into smaller lots, placing over them in a window, mixing small scales with large ones, etc. To force me out works too; is this really what you want? Or you think that a “big whale” who scales 10,000% will scale back to 500%, no problem, no questions asked? Did you ask? Did the guys who complained here ask? These are [supposedly/allegedly] their subscribers, right? Why are you (developers) different from C2? They didn’t ask you (their clients) and you didn’t ask us (your clients.) They screw you, you screw us.
You must be unaware of the vast amount of money washing across some of the more popular systems. I’ve seen certain subscribers commit hundreds of thousands of dollars to individual trades. Some systems have many such subscribers. And because C2 uses market orders (even for limit orders that are touched but not completely filled), the cumulative effect of these traders inevitably creates slippage in all systems – even Forex – where many millions of dollars can be committed to one trade simultaneously. The more popular a system, the worse degradation in performance as it attracts more and more capital; at least the scaling limit slows that degradation.
The scaling limit also allows developers to better segment their subscribers into those who can afford to pay a lot more and those who can’t. Developers can create a similar strategy with slightly different execution times for big money traders and charge them 10-15x more than they charge the smaller traders and now 95% of parties (all except big money subscribers) are better off. Sorry if I’m not sympathetic about traders who are making tens of thousands of dollars being charged more subscription fees vs. the traders making hundreds or low thousands. Nonetheless, big money traders will still gladly pay much higher fees if the system has been profitable for them.
Compared to hedge funds where 2/20 fee arrangement is common and returns/transparency/redemption rights are limited, C2 strategies are a complete bargain. Any big money trader would agree.
What will stop “whales” from receiving C2 signals via API (instead of autotrading) and then sending the orders to their brokers’ APIs, at any size they like?
Good points (and I am not making tens of thousands of dollars, unfortunately.)
You understand of course that this is not what C2 implemented. 500%. Period. What you are describing is much better for everybody! Upto X% is fixed fee, above it $Y per 100% scale. Also: upto X% executes first, above that executes in a secondary queue. Works for everybody.
So you guys discussed this, proposed this and C2 refused it? Or (what I suspect) a real discussion begins after the fact? Why bother?
And my question still stays: did you talk to the “big whales”? Or are you just making up what’s on their mind? Did you ask them if they would be agreeable to such a solution? Or just assumed that not? “Communication” and “community” have the same root, you know. (But I am not a linguist.)
I proposed a priority system whereby smallest traders go first and largest go last. Apparently that’s illegal under US law so C2 can’t implement that, even though it’s the fairest method. At least the scaling limit allows developers to offer different strategies (one with a much bigger model values which amplify scaling versus smaller model value for small traders) for varying fees.
And GalBarak, I don’t know the technicalities of that unfortunately. Sounds like something C2 can’t prevent in any case.
That’s probably correct, Elemental. So this won’t really stop slippage if size is the problem. It will probably weed out those who wish to trade a bit larger but aren’t real “whales”, and make it more difficult for developers to charge decent fees - the only way a subscriber can justify paying a high fee is if it’s not large in relation to capital / trade size.
The percentage of smaller accounts will be larger - and this normally means more people interested in excessive risk taking vs. those interested in steady reasonable returns. This may result in more short lived, risky systems.
If there is a delay in the API routing (even a couple seconds will be sufficient), it may have the same effect as a prioritization system anyways where smaller money autotraders go first and big money routing through a secondary system go later. There may also be something on C2’s end to prevent such a thing from occurring; I don’t know enough to comment.
Regarding your others points:
(1) Trade leaders already charge a fee that’s acceptable to the lowest common denominator. If the fee is too large for a subscriber trading at 100%, then the fee is simply is too high overall and must be lowered. A fee acceptable to a 100% subscriber would definitely be acceptable to a 500% subscriber, but not necessarily vice versa. Thus, the scale limiting allows leaders to create different sized strategies for different traders (basically price discriminating against trade size). This is good for trade leaders.
(2) The 500% scale still allows subscribers to trade at or even more than $100,000 in most cases. And this limitation is only per trade. Thus, trade leaders can simply “scale in” with more trades to circumvent the limitation if it becomes problematic. And, in any case, the most popular strategies seem to attract big and small money alike. I don’t think it will incentivize the creation of riskier systems to appease small money traders.
If C2 add a deliberate delay when sending signals through API they will indeed kill this feature. the purpose is to expand and not to contract as I understand it, so it isn’t likely.
If you have a large capital it really isn’t a problem to have your software co-located in Chicago or New Jersey, a few miliseconds away from C2 and most brokers. And even if you are at the other side of the world, typical delays will not be over 1-2 seconds. I didn’t see any systems here that are that sensitive to timing of seconds.
For forex or futures, a position size of $100,000 isn’t much. 2, 5 or even 10 lots in forex are certainly still in the domain of average retail investors with a 5 digits account, hardly “whales”.
Regarding your suggestion developers create separate systems that execute later, with a higher fee - if slippage is indeed a real concern that affects performance, then those systems will be clearly inferior. So you suggest developers try to charge 10 times more, for an inferior system? More likely it will open the door for double and triple accounts and other kinds of deception.
Hey, you guys hijacked my topic with all of your talk about whales. The question was about Collective2 doing advertising and promotion. Advisory services (and that is what trade leaders are) have a high rate of client attrition. It is necessary to always having new subscribers entering the pipeline. Where are they coming from? Hot performance numbers attract the wrong type of clients for long term success.
On the subject of 500% or higher scaling, I suggested to Matthew that he just scale the fees at the same percentage. He indicated that there were regulatory issues with this system. Other firms use a scaling system for fees proportional to account size or contracts traded. It is not fair to the trade leader or the smaller subscribers that the large traders get a “free ride.”
A possible solution could be instead of the “double and triple accounts and other kinds of deception” to make it the solution. I.e. I can subscribe twice to the same system, 500% (or something – this is another discussion, why is it fixed? why is not a sliding scale?) each. I pay X times the amount to the developer (X==myscale/500). My orders are submitted with the others in X fragments. All my 500% fragments are in the same queue, but individually. The developer doesn’t have to maintain two separate systems. (Why would it stop at 2 anyway: one for small traders, one for whales, one for big whales, one for Moby Dick?)
From my understanding of account opening with C2, you need to provide a brokerage account connected to your real name and sign on behalf of yourself when connecting to C2. So,unless you’re a fraudster, you can’t open multiple brokerage accounts under different names and connect each of them to C2 under different names. Thus, it’s easy enough to prevent people from opening multiple C2 accounts for purposes of connecting to the same strategy multiple times unless they’re committing identity fraud when opening multiple brokerage accounts.
Multiple accounts work for free period trials since those people aren’t autotrading two or more accounts simultaneously (and thus don’t need to go through the identity vetting with C2), but that doesn’t work in this scenario.
Anyways, I don’t want to hijack this thread any further.
I have seen in one of the threads that the issue of multiple accounts with multiple credit cards was mentioned by Matt as a possible problem. If I’ll see the thread I’ll post a link to it.
Anyway, the following link explains that C2 accepts autotrading in multiple accounts:
And, it’s trivial, legal and accepted to open multiple accounts with IB for example, with the same name and identification.
If each of those accounts can scale up to 500%, then overriding this restriction can be done even within the legitimate system.
I too will stop the hijacking with this final comment.
On the hijacker topic, it probably makes sense to have a scaling limit that is controlled by the developer. It makes no sense to impose a blanket limit on everyone.
Collective2 has wonderful analytics, if that is what you are into. I would bet that most investors aren’t. But what about marketing? Is there any? And, it doesn’t make much sense to advertise outside of C2. Why spend money to attract potential clients, who will then be lured into the current hot system. Rather than fighting for a slice of the current pie, the pie needs to be made larger so that all talented developers can prosper.
