The opinions expressed in these forums do not represent those of C2, and any discussion of profit/loss is not indicative of future performance or success. There is a substantial risk of loss in trading. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. You should read, understand, and consider the Risk Disclosure Statement that is provided by your broker before you consider trading. Most people who trade lose money.

Strategies that i unsubscribed in past 2 year

Sure, but you can also have the same exact problem with stocks : the trade leader can also let the losses run wild and next thing you know you wake up with a 65% drawdown on some high-flying stock.

Usually if there is a stock only strategy that’s been around for over 2 years and has kept max drawdown below 35% the risk is quite low of blowing up.

With forex and option selling strategies even after a few years of doing ok they can still blow up at anytime. ( for example Just Forex)

The forex and futures traders who keep their leverage low and don’t add to losing positions will not have this blowing up risk. However it seems many of them often use massive leverage.


Leverage has nothing to do with risk. You can trade with 100 to 1 leverage and still risk 2% or less on each trade.

The risk is the stop, as a percentage of trading capital.

The only risk with leveraged financial instruments is the sudden and unexpected gap. But even that risk can be hedged through the purchase of options (put or call), instead of using a hard stop.

Leverage has something to do with risk.


Leverage is simply a loan.

How the trader manages that loan is another story.

Application and theory are often different. In this thread below, of the 13 strategies I have logged that failed in a big way all were either futures, forex, or selling options. Please help me even it out by pointing me in the direction of more stock, leveraged etf, and buying options strategies that have had spectacular failures after gaining popularity.

I am not saying you can’t have wildly successful strategies using those instruments but if you want to reduce the chances of massive blow ups when following strategies I would recommend not following those. That is just my two cents. Perhaps you yourself have a fantastic record publishing futures, forex, and selling option strategies.


You are still not answering this very simple question : where is the proof that stock strategies make more money on a risk-adjusted basis, in the long run, compared to leveraged financial instruments like the Futures, the Forex or the options.

In absence of a rigorous scientific study, we can only guess.

And saying that Forex strategies, for example, “fail” more often than stock strategies (due to poor money management) does NOT mean that stock strategies are better, safer and make more money overall.

There are also tons of investors who prefer to make 35% a year with a 35% maximum drawdown, than 5% a year with a "safe"5% maximum drawdown.

You wrote: “Perhaps you yourself have a fantastic record publishing futures, forex,”

I will start a Forex strategy next month, feel free to study it if you wish. This C2 trading system will show that leverage has absolutely nothing to do with risk, so stay tuned, as they say on TV…

I was actually looking for a link to your profile but can’t find it. I don’t know why but when I search your name as a member I can’t find you on the main C2 site. I just mean your public profile not your strategy since it sounds like you have not started publishing one yet.

Also I I’m asking you to help me make a small study by helping me find more things to add to the log

Well, I really do not like to bash people’s system, even if their strategy is no longer active.
Like my uncle used to say : “If you can’t say something nice about people, keep your mouth shut”.

But there are indeed some studies we could conduct. For instance, do systems with low drawdowns (less than 10% for instance) generate smooth equity curves? What is their average ROI?
Same question for C2 systems with low “leverage”.
Stuff like that.

The drawdown is just one way to check risk. For example there was a strategy ( MCProtrader ), that sold call options on UVXYY. It was making money every month and had a low drawdown (As UVXY normally goes down over time). Then after many months a big UVVXY spike came and wiped it out. Some follower accounts went negative!

Short options and high leveraged positions have tail risk. An unexpected event can have a huge impact on these positions.

You said “Leverage has nothing to do with risk. You can trade with 100 to 1 leverage and still risk 2% or less on each trade.” That really is not true. If there is an 100 to 1 levered position with a 2% of account equity stop loss then even a 0.02 % move against the position will hit the stop loss! No trader with 100 to 1 leverage is using a 2 % of equity stop loss, otherwise almost all the trades would be hitting the stop loss.

With equity strategies that have over a 2 year track record you can look at the max drawdown to get a good idea of the risk. With high leverage and options selling strategies you also have to consider tail risk.


I’ve tried to make this point about risk with @LiveForexSignals but it just doesn’t resonate. Also, if you are using a much smaller stop than the strategy then the past performance numbers are meaningless. The trader will be stopped out much more and lose any gains the strategy had of a bounce after their smaller stop.

Good morning MaxTor and EthosPortfolio, I have a very simple question for you.

Let’s suppose 1 Euro = 1 US dollar.

From my Forex account I buy 100,000 Euros with only $1,000 margin.

What is my leverage?

Good morning to you. Don’t take offence to this but I spent a day debating risk, margin and leverage with you and I’m not willing to spend another day doing it again. Higher leverage means greater risk whether or not the stop loss is set at the same percentage. The risk you don’t understand is that the probability of hitting your stop loss is proportional to your leverage. That is a form of risk that you fail to recognize.

I don’t have more to add so I’ll simply wish everyone a fantastic weekend.

1 Like

Here’s one I didn’t see in your post. 90% win rate but just had a 93% DD.


Thats a strategy I warned about months ago and it has finally failed… :thinking:

Always be careful of averaging down or martingale strategies.


Absolutely not, and here is why.

First to answer the question (see post above), the leverage is 100 to 1.
Because I only need $1,000 to buy (control) 100,000 Euros, the balance ($99,000) is a “loan” from my Forex broker.
This is the true and only definition of leverage.

Let’s continue with this simple example.

I have $10,000 in my trading account and I just bought 100,000 Euros with $1,000 down (margin), so leverage is 100 to 1.
My stop is set at 2% ($200). In other words my stop will be triggered if the market moves 20 pips against me.

So there, I am using a 100 to 1 leverage and yet my stop is wide enough for day-trading purposes AND small enough to protect my account.

Leverage has NOTHING to do with risk.

But a 90% win rate! How can it go wrong :joy::joy:

The winning rate has nothing to do with the profitability of a system, even though you can use it to calculate the mathematical expectancy of a system (assuming you know the average profit/loss per trade).

You can use a 1,000 to 1 leverage and it won’t matter, see the mathematical demonstration above.
A 2% stop is a 2% stop, no matter what leverage your broker is offering you.
No matter what leverage you are using, you CANNOT lose more than 2%.

Yes I know, the market could gap against you, but gaps can be hedged with options. They are also very rare in the Forex market and appear mainly on Sundays, when the market re-opens.

Back to C2 Platform