"I don´t know if volatility is a component of risk."
Of course it is. Sharpe ratio is return/risk and risk is defined as the volatility (standard deviation) of the equity curve.
Or consider daily range as a measure of volatility and risk. Obviously trading one contract of silver (~$5000 current volatility the way I calculate it) has much more risk than trading one contract of the 5-year note (~$300). You’d have to trade ~16 contracts of the 5-year to normalize the risk to 1 silver.
Dennis,
I believe you touched on a good point in your second paragraph. Volatility of a security and how it affects your system equity can be controlled by position sizing.
Many good systems use volatility when deciding on the amount of money to invest in a particular security.
Hello Hugo,
If you do not mind me asking, as a manager of your funds/systems, are you immune to schizophrenia yourself? May we see you vaccination certificates?
C2 offers excellent anaylitics to a subscriber. Why do you put it down?
"My family don´t ask me if the profit was volatile or not, they just ask if I have profit or not. "
Exactly Hugo.
If I tell you “Hey, I just got back from Las Vegas, I made $10.000 in less than 30 minutes at the roulette” you would probably say something like : "Great, let’s celebrate, I will get the Champagne!"
But here is what some C2 members would say : "Hey, wait a minute, at some point you won $20.000 and now you “only” have $10.000 profit, that’s a $10.000 drawdown right there, that’s bad, real bad, you are an idiot!"
Sad but true 
Hugo, I wasn’t suggesting anyone should trade a system based solely on Sharpe or any other metric. I was merely surprised that you don’t see any relationship between volatility and risk.
Volatility (daily range) has been such a central part of my automated trading algorithms for so long that I guess I forgot that some people wouldn’t think it’s important in assessing risk. How they could possibly think that is still beyond me but there you have it…
Hugo,
So, without having your vaccination certificates posted here, invesing in your systems is "a bad investment" as you wrote.
Do I follow your logic correctly?
Thanks, Hugo.
NFA rules prevent posting of certifcates as they are not indicative of performance.
But, Ms Naivete, if you ask nicely, perhaps Hugo will email copies of the ones you seek starting with his colonoscopy certificate.
Years ago, when I was getting started, a friend and experienced trader explained to me why a smooth equity curve is desirable. He said imagine you’re retiring and considering two fund managers to put some money with. Both have good reputations for honesty and integrity and neither is known to be schizophrenic. They both promise income that averages $200 a day and their audited statements back that up.
The first will send you a $200 check every day; just walk out to the mailbox and there it is.
The second will send checks at irregular intervals. They may be big or they may be small and he may even send you a bill once in a while but, over the course of a year, you will average $200 income a day.
Which manager would you choose?
Hahahahaha, that’s a good one B.K.
Neither.
The return on my $10,000,000 investment is too paltry.
Dear Hugo,
I wrote that you put down, that is disparage, C2 analytics.
And I do not appreciate that.
Yes, I agree. If you lose 10,000 in less than 30 minutes after gaining 20,000… That is sad.
What if a subscriber starts trading your system when u are up 20,000. All he feels is the 10,000 loss. Should he be happy?
"The first will send you a $200 check every day; just walk out to the mailbox and there it is."
Mathematically, a GUARANTEED trading income of $200 a day ($6.000 a month), per unit of shares or contracts, will allow you to pyramid your profits at an exponential rate, no matter how big your intra-trade drawdown is, because this is the only case where averaging down techniques are GUARANTEED to win.
Why don’t you appreciate that, Ms. Naivete? Isn’t Hugo entitled to his opinion even if he really did disparage (which he later said he didn’t)?
More importantly, why do you even care? Your remark sounds as if you’re insulted. Do you have an interest in C2 beyond a free membership?
And given your proclivity for writing nothing but negative reviews of systems–if there’s a positive one I can’t locate it–your remark is very hypocritical.
Hugo, you are being manipulated and antoganized because English isn’t your primary language. May I suggest you press the “ignore” button on Ms. Naivete’s post. Start off with a week and if you think it has value change it to a month, then year.
You have better things to do than chase the shadow of a clown.
