C2 currently do not allow systems to scale up system capital, only to scale down. Is there any chance this might change in the future?
When publishing the [LINKSYSTEM_56476704] system on C2 I made the mistake of starting with only $1000. The system is designed for small accounts and is doing well with a starting capital of just $1000 even with fees and typical commission costs included. However, costs are making a significant impact on the monthly percentage returns because of the small trading capital. The optimal account size for this system should be $10000. A larger trading capital would also allow for charging a higher subscription fee in the future without significantly affecting percentage returns.
I could of course start over again creating a new system with $10000 as recommended starting capital, but then the current 6 month trading history would be lost.
Hi Ronny, I am in the same position, as are a few others who didn’t start with $50k or more. When I started my systems I followed the C2 recommendation and started them with the bare minimum capital required to follow the systems properly. At that time the subs fee was not included in the equity chart. Now that it has been been put in, the equity charts don’t look very nice any more even though nothing’s really changed!
It is fair and desirable to include trading costs in the chart but not the subs fee, as the former scales with a trader’s account size but the latter does not. So anyone trading with more than the bare minimum capital would be seeing better performance than the chart suggests. Similarly, someone with $10,000 trading (by scaling down) a system which is listed with $100,000 on C2 would be seeing worse performance than the C2 equity chart suggests.
I have a year and a half worth of history now that I’d have to chuck away if I re-started the same systems with higher capital, and I really don’t want to do that!
Matthew, how about coming to some one-off arrangement about this?
Dean.
Hi Matthew,
What Dean outlines and suggests here makes a lot of sense, it would put systems on an equal footing when comparing them and the enhanced transparency would actually increase compliance in my opinion.
Karl
I have to say I agree. I wish it were as simple as, “run the personalized graph without the fees,” but that’s not what people are looking at when trying to evaluate an equity curve. I guess that explains why developers choose larger model sizes.
The personalizations are a black box to me anyway. Truly, I don’t understand what happens when they sometimes mangle the equity lines. For instance, Dean, run the personalized graph for Isonomy Plus with a starting capital of 30,000. DESELECT both the commissions costs and the sub fees. What happens to your graph? Are you seeing entire trading months drop out? (Is it a bug?)
I agree, also.
Rescaling up is not like adding capital to an account. If the argument is that it allows nearly failed systems to continue to live a bit longer, then it should be remembered that if there’s a 98% drawdown on the system’s record before a rescale up, there will still be a 98% drawdown on the record, after.
Maybe place a limit on the scale ups, so they’re not abused? It can only be exercised once during the life of the system, and the scale up is limited to 1,000% (10x), maximum.
