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Could you confirm whether the scaling limit of 500% is applied retroactively to current subscribers scaling above this limit or only to subscribers who try to scale above the 500% threshold? I noticed that there are still several subscribers trading at many multiples above the 500% limit, so I’d hope that it would also apply to those subscribers as well (perhaps after a fair notice period or upon opening up of new trades or both) so as to (a) be fair to other subscribers who didn’t know about this policy implementation and couldn’t scale appropriately before it was put in place (thus creating an advantaged class of users who have access to higher scales for popular systems) and (b) avoid the issue of existing whales sucking up all liquidity while other users can now no longer trade above 500% scale (rich get richer, everyone else suffers from liquidity issues).
There are some strategies that deal solely in securities that are extremely liquid. It makes no sense to impose a limit in trading across the board to all. Why not leave it up to the system originator as to whether to impose the limit.
What is this limit? Where does it come from? Why does it exist?
What is going on? I can see why some strategies might want a scaling limit, but not all would. My system was designed as it was specifically to not have liquidity issues. If I knew such a limit existed I’d have started my strategy at a higher value.
For those who think they will not have liquidity issues, do you think XIV has liquidity issues?
Yes, it does.
This strategy trade XIV and ran into liquidity problem.
Then the developer has to set up another strategy:
VIX DayTrader 1 trade VXX and XIV;
VIX DayTrader 2 trade UVXY and SVXY.
Ya, I’m surprised at how traders underestimate the effect of multi-million dollar (cumulative total of all subscribers) market orders on entry price. Slippage could be quite a bit.
I don’t have a liquidity problem with my system. I don’t want a limit on my system. I already have a subscriber asking me what to do. What do I tell him?
Certain systems and instruments has limited capacity, well known fact. I think the reasonable way is to give an option of limit something to the trade leader. Once he decides that the slippage is high, he turns the knob - no new subscribers, no scaling increase for existing subscribers. Or, it can be done automatically. Since c2 has all auto-trading fills, they can calculated slippage per signal, and set these limitations based on certain critical value. Still better than put same level for everybody.
PS On the other side - it might break certain financial regulations.
It is legal to have multiple accounts on C2. It is also legal to have multiple broker accounts. So everyone still can trade at any scaling% but you would have to create multiple accounts and pay the listing fee multiple times.
While the current system grants that the so called “whales” don´t eat up liquidity anymore (because they don´t execute as 1 order even if using multiple accounts) it could have been solved more userfriendly. But from my understanding there are regulatory issues that prevent C2 from implementing a more direct and userfriendly solution. Matthew once mentioned that you can not charge per % scaling or per contract traded because of regulations so I assume this is the only waterproof method if you want to limit scaling at all.
Possibly this is also the reason why C2 can not give trade leaders the option to choose the scaling% limit for their system because then it´s again very individual. Trade leaders on this site are technically information providers not capital managers. So C2 put in the arbitrary 500% as limit for all systems to have normalized conditions. If trade leaders could choose the limit for their system you could simply choose 100% as limit and effectively have a contract-based / scaling based payment which seems to be a problem for US regulators.
So lets summarize facts:
“whale” problem solved (API may be a leak though)
anyone still can use any scaling if he really wants to
That’s the point. Too many autotraders entering market orders simultaneously leads to slippage. Doesn’t matter if the manual traders enter even 5 seconds later.
some brokers will not give you margin on multiple accounts. if you open multiple at ameritrade accounts they will only give you margin on one. That could be a problem. Cash accounts take time settle trades and can’t short.
There are systems with over a million in the model account and systems with only $5000 in the model account. How does it makes sense to have just one cap of 500% scaling across all systems? 500% for $5000 system is an ordinary / medium sized investor. For a system like R Option 500% scaling would mean a huge whale trader. It seems C2 is making crazy changes which will drive away both traders and investors.
I agree completely. Makes the service much less attractive. If there was an alternative, I’d just go there. It really has hampered the profits I can make with c2.
some systems are only 10k so we need scale set atleast 1000% for bigger players. Matt, please up the scale or the site will be limited to small players only. Turn over rate will be very high.
