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Strategies that busted in the crash


#82

Most trading XIV had no clue of the risk in the first place. Some didn’t even know it was a note. There’s ways to hedge risk but that cuts into profits.


#83

I’m not against stops, I just recognize they are not the solution many people think they are. And they can’t be added after-the-fact to arbitrary systems as risk management. Unless you designed the system you don’t know what adding stops will do to results, you won’t know how or when to get back in, etc.


#84

Some of these systems that lost crazy amounts yesterday like $50,000 could have used stops. And not every system that lost big was in XIV. If a guy lost a huge amount trading the ES I think we can both agree that at SOME point a stop was needed. You and I dont have to know anything about the way the system was designed. We can both agree that a trader that let’s his account go to zero is plain reckless. He’s the one that needs the stop the most and is least likely to use one.


#85

Maybe some of them could’ve used stops. Maybe some of them could’ve used less leverage. Maybe some of them just need to be better at taking a loss or reducing position size at appropriate times. Maybe some should’ve added some low cost option hedges. Maybe some of them were just bad ideas that should’ve never been traded (most of the “add to losers” systems fall in that catagory).

Given that XIV blew up afterhours when stops wouldn’t execute, you can’t really argue stops would’ve done anything for those systems. Stops are fine for what they are, but they aren’t remotely the magic bullet newbies think they are.


#86

100% agree. Martingale isn’t a strategy. It isn’t an edge. It’s getting lucky. These guys are afraid of taking a loss. That’s problem #1.

With XIV these guys simply didn’t understand the risk. If it’s their money that’s one thing. They put their investors into something they didn’t even understand.


#87

if a system trades a diversified portfolio, let’s say 5 to 10 instruments and a sub merely trades 20% of his portfolio towards that system, the losses are negligible. If 1 instrument went BK., that would be a mere 2-4% of the subs portfolio.

Stops are not needed in this scenario, and the sub and leader should be diversified.


#89

Are you talking to me? I don’t have a list or a list with your strategy. Not sure who you’re talking to.


#90

Am I missing something here, I just took a quick look at Vix Lite and while it is too young to really comment, one thing that can be said is Vix Lite did not get “busted” according to what can be seen. So why was it your first system to call “busted” when there seem to be many that actually did go bust? Was this an unjustified personal attack?


#92

Just mob mentality. They are C2 groupies.

Either they are failed leaders with a chip on their shoulder or they lost big and are lashing out.


#93

Since trading is a mind game, the chips and lashers most likely will have a tough time of it. A good rule of thumb, anytime subscribers see indications of a negative state of mind coming from a trade leader, they should run as fast as they can.


#95

Hello @ReneK2 and @Thanos

Thanos is requesting you remove his strategy “Vix Lite” from the open of this post. He is stating he did not bust in the crash. If this is true, his point is validated to remove his strategy from your post. You can alter your post by hitting the pen icon.

ReneK2:
Please tell us what you saw in Vix Lite that indicated he busted.

Thanos:
Please take the private setting off your strategy so ReneK2 can revisit and confirm what you are saying.

If what Thanos is saying is correct, he would not belong on this list and has a valid point requesting he be removed.

Good day


#96

His results are 7 days delayed. So potential losses of monday we will see next week. The strategy is private again.
But anyway if this is offending to him i will remove it.

I wanted to get an overview of the types of strategies struggeling such a situation. And im surprised that vix systems are in the minority so far.


#97

Actually C2 shows current equity live, and closed trades are delayed in trades list, but they are reflected immediately in dd% and equity line. So there is no need to wait 7 days.
But Thanos is quite a character. And I think we all assumed that he went bust because he made his strategy private, that is usually a sign of bust strategy. But it seems like he is simply here to troll. :smiley:

The best way to deal with troll, is to ignore him.


#98

Somewhere here in the forum i read that the results are delayed then. Well, this thread is not about trolling but about busted strategies. And Vix Lite has performed well then.


#99

When i look finally at all these strategies most of them have in common to have >80% winning trades. The vix systems with ~50% winners are performing way better.


#102

To be honest, we need to keep on top of gimmicky sales tactics that lure unsuspecting newbie investors. I suspect that quite a few newbie investors got their accounts wiped out or at the least suffered > 30% losses. So I am applaud you @DogZebra_Investing for pointing out some bad developers!

But Vix Lite has so far shown that its a strategy to keep an eye on and that it was mentioned incorrectly as a busted strategy.


#103

Thanks Algo. Here to help, and point out charlatans.

This Vix Lite guy did not get crushed (as far as we can tell, he went private again, lol), but the money he has made has mostly been in a levered XIV trade he made when his strategy just started out. I will point out facts, but I typically don’t harp on developers unless they come on here touting their unproven system and saying they “saw 2008 coming” and “I went 150-0 in my trades” or some nonsense like this kid.

Invest wisely my friends (stay thirsty my friends).


#104

We can now see the results of the trade that doomed Mozart (Salieri? Nooo, that’s another story).

As I suspected he bought XIV and held overnight. What I can’t believe is he averaged down 3 times into the close.

Huge loss - I don’t see how he recovers from this.


#105

Most of the volatility strategies were of 3 types:

  • (1) volatility timers whose models suggested better and worse times to be long or short,
  • (2) buy the XIV dips strategies, and
  • (3) strategies selling puts and calls.

Obviously, most of the dip buyers got killed, unless they quickly realized “This time it’s different.” And many of the option selling strategies did poorly if they were on the wrong side (ie, selling VXX calls).

Yet because many of the 2017 dips were driven by political news and were so brief, I think many of the people with good historical models were underperforming the dip buyers. So some of them probably added a dip-buying strategy to their underlying models. If their historical models were based on reversing positions when contango got small or when there was a fairly big 1-day drop in XIV, then they should have gotten out of XIV sometime during the week before the crash. If they allowed a “buy the dip” strategy to override their contango/backwardation signals, then they too got killed.


#106

he will recover from this, and he should. especially he is not TOS, hes got nothing to lose.

I had a 50% draw down last yr, back in 6 month. Survived and learned. To everyone who got hit by XIV, keep your head high and learn from this. If you love trading, dont give up. Just have a worst case plan and know how to react when the next correction/crash comes.

happy trading everyone.