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I’ve had a lot of questions about risk and scaling for strategy RT Capital (112807670). Hopefully this answers them since all the questions seem to be related.
The strategy is based on an account size of $250,000
The strategy will take 3 kinds of trades. The best opportunities or Tier 1, secondary opportunities or Tier 2, and finally all other opportunities or Tier 3.
Tier 1 trades will risk 0.50% of the current account size
Tier 2 trades will risk 0.25% of the current account size
Tier 3 trades will risk 0.10% of the current account size
Some trades might go over or under these figures but ballpark the stop out amount is around this figure
Example
Account size $250,000. Tier 1 trade will risk $1250.
Current account size $251,335. Tier 1 trades should be $1257. Tier 2 trades should be $628, and Tier 3 trades should be $251.
How to scale to your account size and your risk profile:
Let’s use an ES example:
-The strategy on Thursday night 8/03 around 9:45 pm sent out to subscribers a signal to sell ES @ 2476.75 for trade date Friday 8/04
-The stop was 2480 and the target was 2464
-This was cancelled before the jobs report so never filled
-This was a Tier 1 trade
-Trades are not labeled Tier 1 or 2 or 3 so subscribers should assume it may be the highest risk. There are always stops so it’s pretty easy to figure out which tier.
Going forward the system will send this trade out as 8 ES contracts for a risk of $1300 in this example. $1300 is not acceptable for everyone so you could scale down to 1 contract for a risk of $162.50 or any amount appropriate. You could also scale up if that amount is too low.
In this example if the trade had been taken it would of been profitable but ES never got to the target. The system would get out around 2472.50 before the close. At the end of the day risk was 3.25 points and profit would of ended up being 4.25 points.
My goal by making this standard is to provide clarity. Our number one focus should be on the risk. That ES trade from the example is going to work a very high percentage of the time but never 100%. We’re not chasing dreams here we’re managing risk. If that trade fills us and spikes up we’re not interested the trade idea is invalid. Most traders are sitting on that trade with hope. We move on there’s another opportunity around the corner.
Another goal by making this standard is leaving out the guess work. I know before hand what tier opportunity the trade is. I don’t want to get there and decide last minute if I should be risking this amount or that amount. It’s standard. The work on the trades and stops and tiers and everything else is done the night before the trading day. There’s way too much noise during the day so I want the decisions to be crystal clear.
Hopefully this post answers all the questions but please let me know if there are further questions There’s currently a free trial available. Thank you for your interest.
FYI I took a hit on NQ and YM today of more than 0.5% RT Capital only risks 1/2% at most. My NQ position consisted of 3 different orders. Each order had 1 contract with an entry price, a stop, and target. All three orders for the NQ product combined should of been 0.5% risk. Same thing with YM. I don’t risk 0.5% per trade I risk that much per product so the individual trades should each risk less than that. My stops were not honored today. I emailed support and they did confirm in an email it is not my fault at all and I should of been out of the positions. Please don’t let this reflect on my performance. I’d like to still invite people to try the strategy out for free. I sent my subs everything last night. They knew where to get in and where to get stopped out. I don’t like getting stopped out but I accept it as part of trading. You need to in order to stay in the game. Most traders risk 1% to 5% per trade. I now have a 3.7% drawdown of my entire portfolio and think that’s insane. That’s how much I worry about risk. Please try me out for free. Thanks guys.
While I totally understand your frustration, a word of caution:
No matter what, your system will be judged (evaluated) by the stats of C2. Do we (subs) believe that C2 executes trades and reports results accurately all the time? Absolutely not! We know (based on personal experience and based on posts here) that they make mistakes, sometimes huge ones. Problem is that lot of subs (myself included) use their autotrade system. If it doesn’t execute the developer’s order, we pay for it. It doesn’t matter whether they confirm the mistake. Is it fair to you? Of course not! Is this fair to us? Of course not!
[Just an fyi: I as a sub, analyze a lot of data I retrieve from C2. It is by no means error-free (it could be, but it is not.) I report most of the bugs I find. Sometimes they get fixed, sometimes they don’t. If the error is against you, it can be another source of errors where the deck may be stacked against you. You (and other developers) should monitor the data reported on C2. Of course if this happens, subs will discount the published stats as you are not crazy to report errors that favor you. Solution? Error-free execution and error-free data. Will not happen.]
My other system is straight forward. It’s designed for income. No need for a free trial people can look at the results and see how it’s performing. I offer a free trial for RT Capital because I send out signals the night before and a lot of times the signals don’t get filled or are really accurate and miss us by a few ticks. People can see the signals with the free trial and start to get a sense of the value of these signals. QuantStat2 Futures trades one product the ES. Always trades 5 contracts. Goes for income. So people really understand what it’s purpose is. After I’m out of trades they’re posted and people get to see the results to check on the performance. With QuantStat2 people know I base it on a $25k account. It makes it easy to scale for someone that say has a $10k account and wants to trade only 2 ES contracts not 5 and is going for an income goal of $2k a month for example. By the way RT Capital wouldn’t look bad if I had been stopped out where I set my stop. Unfortunately there’s nothing I can do if C2 didn’t get me out of those trades. They confirmed in an email that it was their mistake. You are a subscriber you know I sent my order with a stop price and a profit target last night. If I don’t touch my orders after I submit them I would think they’d be honored. The response I got was this: “I tracked down what happened here (C2 mistakenly said thought that the trade was flattened, and thus the stops were considered “orphaned” and canceled. This was wrong. The ultimate cause was a database lag issue, but regardless - it shouldn’t have happened, and I apologize.)”. That was straight from the email. I was asked to re-enter my stops but all that does is get me out at market not where I intended. The reason I had my stops where they were today is the condition of the DOW. IF those stops get taken out the market gets emotional That’s what happened. So my bet was the market would hold up and was willing to risk 0.5% knowing I absolutely want out exactly where I set my stops. If you look at the YM order my closest stop was touched EXACTLY to the tick and market bounced off that. There’s a very specific reason I set it there. Once that market touched that level it was a big warning sign. So these signals and levels are placed strategically for very important reasons. Either large funds are stepping in at that area or they’re not protecting it anymore. So although the trade didn’t work I definitely wasn’t interested in it after the stop levels got taken out. Look at the 6SU7 signal from yesterday. It wasn’t filled and was cancelled but I had a profit target of 259. Market hit a low of 261 exactly 2 ticks off and that was the low of the day. That signal was sent 12 hours before the market hit that low. That’s why I say there’s so much value in these signals. The data I’m looking at is the same data large funds look at. I’m not looking at some animal pattern on a 1 minute chart with the MACD doing something. Large funds could care less about that stuff. Thanks
