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I agree with this assessment. I probably will not renew most of my C2star subscriptions for that reason.
Any explanation why C2 is doing that? Most of the C2star strategies use very liquid instruments so I don’t think there is a crowding out effect by larger account holders.
In addition, when I signed up for my subscription plan there was no mentioning that I have to limit my scaling for C2star strategies.
My only guess is that the strategy leaders are just trying to collect their monthly dues from C2 in that program and their subs fees. The safest way is to not take any risk since a 5% drawdown 24 hours rolling is all it takes to knock them out of the program.
The other guess is that since they scalp it maybe harder to scalp in and out like they did prior to having subs.
I think the 5% drawdown 24 hours rolling and 10% lifetime drawdown is a bit tight but that’s the same kind of drawdown that some daytrading combines use but their combines don’t take 60 days to complete like C2’s Star certifications or have the 10% lifetime drawdown.
I think it would be better if C2 would increase the drawdown limits in each or have other certification programs since there is no options certification programs either.
Agree with this. I think the spread, now that they are forced to abide by it, is making scalping very difficult (same issue I had years ago).
Why not have a C2 gold, C2 silver, C2 bronze programs that allow different draw downs and incentivize algorithms differently? That would allow different matches for different investors…
…and another ones bites the dust (or at least flatlines) after live subs…what’s wrong with these traders?
I don’t see a problem here. Since DD is minimal. Or do you suggest it is better to be in 50 % DD just for the fun of it?
obviously c2 know this is an issue, yet they keep allowing these strategy to be pump & flat. I don’t know their full intention of allowing these strategies using different means of pumping the “chart” until they have a subscriber then just collect a few month worth of fees until everyone unsubscribes. Of course c2 don’t want to turn away these strategies due to the fees they collect on both ends. But i think everyone who actually read through the forum will know what is the end result to 90% of these strategies after having a real subscriber for a few months.
Perhaps adding TOS as a requirement for C2Star would help prevent false start strategies.
Osutai -
The idea behind the C2 Star program is to pay strategy managers extra money to encourage them to manage their strategies in a way that (hopefully) reduces risk for their subscribers, while - at the same time - allows the strategies to beat the S&P index.
We have imposed very, very tight risk controls on C2 Star strategies. The result has been at least partial success: the number of surprising “blow ups” of strategies in the program is almost zero.
The second part of the equation is more challenging. Our obsession with risk control has encouraged strategies to try to nibble at short-duration trades, with small per-trade profits.
These profits can be eaten up by slippage, a fact which becomes more apparent as real-money subscribers join the strategies. (I should point out here that C2 doesn’t hide this; indeed, the reason you noticed this is that C2 rubs your face in it. We modify the the track records shown on C2 to reflect the real-life fills received in real-life accounts, so that, slippage, when it occurs, is very visible.)
I’m constantly tweaking C2 Star as I gather real-world experience. For example, some changes I’ve made over the past several months include:
So, my message is: Be patient, and let me and my colleagues at C2 continue to adjust the program so that C2 Star gets better. No, it’s not perfect – not by a long shot – but it will improve as we learn from real-world experience.
In the meantime, I believe the program has succeeded at least partially by muting some of the blow-up risks that were too common when strategies were not encouraged to mind their drawdown and risk.
P.S. I hope it goes without saying, but…
Even though the intent of the program is to encourage strategy managers to reduce risk, all trading is risky, and you can lose money even if you use C2 Star strategies. Caveat emptor.
@MatthewKlein, how about providing different C2Star certifications (allowing different drawdown limits. ie. 10% instead of 5% or 15% as well)
Also, It would be nice to have options included in the C2Star certification program as well?
How about those thoughts?
hi Matt, Will date of joing c2 Star and/or date of c2 Star certified visible on the strategy home page ?
@AlgoSystems - I think what you propose (different C2Star variations, with different drawdown/risk levels) is a path we’ll eventually take. But first, we want to get the program “just right” at least once, by adjusting the risk and performance criteria for the single version of the C2Star program we currently have. Then we can consider rolling out other variations.
In a similar spirit, yes, we will eventually allow options trading in the program. But not yet. Options introduce an additional level of complexity (in calculating risk, margin use, capital deployment). So, again, we’re working on “getting it right” within the most simple implementation first.
I hope to have some announcements about this soon.
That’s a good suggestion. Let me work on that.
Agree with that suggestion. Allow different maxDD with different incentives…
The problem is that the traders are probably scared of losing big and getting kicked out of the program. This does not bode well for the subs since their account seems to be bleeding slowly while paying a fee for the bleeding…lol
I hope these strategies will try to take a little more risk to gain a bit instead of closing the trade right away with a loss in the future.
Yes, somehow C2 star program didn’t account for the human incentives… Nash’s game theory wins again…
Almost 2 months since these systems have had subs and they have flatlined with zero profits for their subs.
@MichaelKedz, I definitely agree that human incentives have driven these systems to fail. I am curious how long these systems will be allowed to stay on the C2 star program or probably they are already preparing for their next C2 star program strategy as these come to a close…lol
@AlgoSystems if you go to the C2Star page (https://collective2.com/selector/c2star_certified) you’ll see that NONE of these five in the original thread are still Star rated, they’ve been dropped back to some lesser status like Pending or something (half a star showing). Perhaps they’ve reapplied for admission (like some in this list) or they’re just suspended from the program, or… the help system doesn’t say exactly what “half a star grayed out” means. But I think it surely means they’re not collecting $1000 a month minimum with that status. Only 5 on the big list currently have GOLD full stars, and (need we say it?) it’s looking like 3 of these 5 are currently flatlining.
I think C2 star system is an interesting idea, but it should be calibrated into several different tiers, and should incorporate risk return aspect of trading rather than just downside protection. Still kudos to all who aimed for the star.
Yes…I agree its a good idea but currently the restrictions are a bit too tight I believe.
I think a 20% drawdown is probably more acceptable. For a 5-10% drawdown restriction the trader would probably have to be almost perfect…lol
