Hi Matt,
I am the owner of VN Forex Club at www.collective2.com/go/vnforexclub a "Pay for performance" Subscriptions cost $40 at the end of each month, but only if the system has made profitable trades. However, I would like to offer our subscribers a guarantee gain of at least 200 pips per month therefore I wonder if we could somehow set it up so that the system ONLY charge our subscribers IF our performance for the month is at least +200 pips?
Thanks!
Si Nguyen.
That is not currently possible under today’s C2 billing software. I will add your suggestion to our feature request list, however.
Matt,
Thanks for your reply! So far we haven’t get a single month with less than 200 pips in profit but what should we do if in the future we have a month with some profit but less than 200 pips? What do I need to do to keep our subscribers happy in this situation?
Thanks!
Si Nguyen.
"What do I need to do to keep our subscribers happy in this situation? "
Stop worrying about it. There is no rule that you need to do this. Charge fee, and be done with it. Most systems in the world don’t do what you are asking anyway.
Ross,
Thanks for your suggestion! We know that we don’t have to do it but we want to see what we can do to make our subscribers happier other than do our best to make profitable trades consistantly while keeping the max drawdown low. We are willing to walk extra miles to provide our subscribers the best service they can get with competitive price.
Thanks!
Si Nguyen.
No problem… I’ll call my bank and do a chargeback if that happens.
Lew,
Thanks for your comment! The problem with this is that the bank will charge about $30 for each chargeback transaction and it also give us a bad reputation when we have too many chargeback transactions. What we try to find is a way to stop the transaction before it start or some type of refund function.
Thanks!
Si Nguyen.
Dude… I was kidding! Chill, 'bro!
The point is that many subscribers are probably much more worried that you might loose 2000 pips in the month after you won 200 pips. Your payment scheme wouldn’t help against that.
Jules,
Sure! We understand this because we trade this system in our live account too. Thats why making profitable trades consistantly while keeping the max drawdown low is our most important goal. We practice what we call High Probability Trading base on volume spread analysis and ONLY enter a trade when we think it is High Probable.
We also believe that money management is just as important as the entry and exit. Therefore, we usually risk less than 5% of our equity for a trade with 100 pips Stop Loss. This way, we know that we can get our losses back after a few bad trades and earn some profits with a few good trades.
The other things we try to do (like reply our members email in less than 24-48 hours, offer our +200 pips per month guarantee, etc
) are just ways to say thanks to our subscribers and to make them feel a little happier.
Thanks for your comment!
Si Nguyen.
"The other things we try to do (like reply our members email in less than 24-48 hours, offer our +200 pips per month guarantee"
why would you guarantee or promise something that you cannot physically provide through C2? It is not particularly fair to expect immediate complex functionality for one system out of many. There are thousands of ideas new people can think up, that are not in the mainstream of investment systems. But the owners cannot keep scotch taping and gluing on every functionality dreamed up by new Jesse Livermores.
Legally (at least in the US), systems are just considered as educational publications. Your guarantee is not something that is really necessary. Rather than bend C2 to your guarantees, it is more reasonable to offer a system within the functional framework of C2.
Ross,
Before we know C2, we have provided our signal for a group of Vietnamese traders and they ask for some types of guarantee therefore we came up with this guarantee because the payment methods we used allow us to easily do a refund transaction if necessary.
Thats why when we decide to switch to C2, we have to keep this guarantee to keep our current subscribers. I dont know much about C2s billing process so I dont have any particularly solution for this issue yet but I know that if Matthew have the same commitment level to make (and keep) our users/subscribers happier, we will find a way to at least get around it.
If Matthew is too busy for this, I have to make refund transactions by checks until we have a better solution. About the legal issue, we think that our +200 pips per month guarantee is very similar to the other Pay for performance" systems at C2. The only different is our subscribers only pay us if our system make at least 200 pips while they have to pay for other system(s) if the other system(s) make at least $1. We dont guarantee (or promise) that our subscribers will make 200 pips every month for sure. We only said that if our system fell to make at least 200 pips per month, our subscribers dont have to pay us.
Thanks for your comment!
Si Nguyen
To some degree I also think the current c2 "Pay Performance" billing methodology is disadvantageous for subscribers.
For example a system may have several months of drawdown, but subscribers will be charged if one month is profitable even though the system has not surpassed its drawdown. In other words subscribers are still charged under "Pay For Performance" even though their account is in a loss.
I think that a fair "Pay For Performance" billing scheme is to create a "watermark" where profits are calculated and this watermark must be surpassed before any future profits may again be calculated.
For example if system equity is at $220,000 and it falls to $180,000 then subscribers should not be charged unless the balance exceeds the $220,000 watermark.
I think this watermark performance billing scheme is excellent for subscribers but also enables vendors to keep its current subscribers and perhaps reduce the rate of churn.
Si you do’t have to explain yourself to Ross. He is just a blow hard that can’t make any money trading so he thinks if he runs other traders down he looks good. Just be yourself and do what is right for you. Ross will just wither away someday wondering why he failed.
Whereas Richard is someone who needs 3 systems to break even…
That would be an excellent scheme indeed!
Thanks Jules for acknowledgement. Good to hear from you.
I normally refrain from c2 forums but could not resist posting the "watermark billing scheme" for the good of c2, I hope?
@ Domenic: I like your watermark performance billing scheme! I just dont feel right taking people (subscribers) money if/when we didnt do our job right (help our subscribers make money). I would switch our system to this watermark performance billing scheme whenever it is available at C2.
@ Richard: Thanks for your suggestion!
@ Ross: If you really think that run other traders down is the way to make you look good, think again! Look at the way our politicians try too hard to get our votes and you will understand why I say this.
Hi Si,
I think the idea is interesting, but it should combine a high performance floor with a high fee. Not–as in your case–a low performance floor with a low fee. Let me explain why.
As a subscriber I want to make sure that the monthly subscription fees don’t eat too much into my profits. So in determining the amount of equity I allocate to a system, I want to make sure that the expected profit is always at least 5-10 times the subscription fee.
If the performance floor is low and you would miss it only once or twice a year, it’s easy to see that any rebates from those 2 months are negligible compared to what I expect to make in profits/losses for the entire year.
The only case in which it would matter for me is if:
a. the performance floor is sufficiently high (such that the vendor probably wouldn’t make it to that level most of the time, but if he did he would be one of the best vendors selling through C2),
b. compensated by a very generous subscription fee, and
c. measured over multiple timeframes.
E.g. I’d probably be happy to pay you a $250 monthly subscription fee if the system makes at least 100 pip for each week in a month, zero otherwise.
Science Trader,
I see your point of view there! By the way, the expected profit our VN Forex Club system is always at least 5 times the subscription fee at the moment. 200 pips is equal $200 if you trade mini lot size and it is equal $2,000 if you trade standard lot size (not to mention whether you trade multiple lot size or not) while the subscrition fee of our system is only $40.
Thanks for reading!
Si Nguyen
