I’m not sure there’s anything to tackle. If a strategy’s Model Account size decreases, then fixed costs such as monthly subscription price will have a slightly larger effect on a percentage basis. That’s just math, and it can’t really be changed.
Forgive me for being blunt when I say this: It’s not C2’s mission to put a gloss on stats so that they appear in the best possible light.
I mean, sure, we could potentially allow strategies to rescale upward to absurdly high numbers. Why not allow Model Account sizes of ten trillion dollars? That would make fixed costs such as monthly subscription fees appear de minimis. It would improve a strategy’s drawdown and return stats, certainly.
Why don’t we allow that? Well, because no customer at C2 has a ten-trillion dollar brokerage account. Presenting stats in that context is not helpful.
Similarly, most C2 customers don’t have $500,000 or $1,000,000 brokerage accounts. So it’s counterproductive to present most Model Accounts in that magnitude. (The folks that do have a $500K or $1M brokerage account are generally sophisticated enough to be able to scale their trading upward, if needed.)
C2’s goal is to present strategies in a way that increases trust in the platform, and that allows subscribers to make sensible decisions. This benefits everyone. It benefits subscribers (who can make more informed trading decisions about how much capital actually needs to be allocated). It benefits C2 (less risk of novices overtrading). And, yes, it benefits strategy developers, too, who hopefully will see increased numbers of subscribers.
Once you accept the basic premise – that it is better for subscribers when Model Account sizes stay in a narrow, comfortable, consistent range – then it necessarily follows that this may mean sometimes some %-based stats may change a little when strategies rescale in order to meet this requirement.
But the stats are still accurate mathematically. Before a strategy rescales, we report percentage-based stats on a base of X; after rescaling, we report percentage-based stats on a base of Y. It was the right thing to do to use X at first, and then later it became more useful to use Y. The numbers are still calculated correctly in each case.
Let me close this message by asking strategy managers here on C2 to try not to fixate on whether your Max Drawdown number is 16.8% or 17.0%. Remember that everyone will be operating under the same constraints – everyone’s %-based stats will change a little as they rescale. What matters is: do subscribers feel comfortable choosing a strategy? I believe this effort to bring Model Account sizes into a consistent narrow range will increase subscriber comfort and will help everyone here on C2. Strategy developers: please try to be patient and keep an open mind, and let’s make C2 work for the subscribers, who ultimately are the reason we are here.
