Agree here with Northstar. Lots of pressure to chase performance leads to excessive risk and might eventually lead to large draw or even blow up of any strategy. Need realistic expectations. Seems like subs are chasing starts, which tomorrow might be dogs… My 50 cents here. Andrew
I think one of the biggest problems (for beginners especially) is to understand the concept between growth in stocks, GDP in the country invested and interest rates. I have been trading/investing for many years and when the underlying asset is increasing in value its “easy” to get these nice charts. However when this stops or reverses it gets ugly. So my strategy in Shining Delta Capital (https://collective2.com/details/124753017) is based much on this. You have to give the companies time to increase in value and let the workers work for the company. In my head, Forex is a perfect example for things “without growth”… Autochartist went over 43 million trades and it shows that only 16% of traders were earning money in FX short term… Long term with less leverage is not Interesting enough.
Would you please be willing to share which strategy this is?
I would appreciate it if you send me a DM.
That may actually work! Might be best to do it when any given strategy’s equity curve is at or near its all-time high, and also after it’s enjoyed an amazingly long winning streak. Statistically, I’d bet it works out over a large sample size of trades, but you’d need nerves of steel to handle the occasional draw downs caused by strategies that continue to perform well.
@CodyPipkin and @DonaldWPendergast2 it is an interesting idea, but I don’t think it works. Before trading costs and taxes the average trader is “the market.” However, after including trading costs and taxes that person that was the average trader is now doing worse than the market. It would be the same way with going against these strategies. You would just add another layer of costs to subscribe, short, etc. You must find above average traders/investors to outperform the market after costs and taxes. Finding them is hard to do though and perhaps more difficult.
I’ve been a C2 member since 2006. None of the strategies I started with exist on here today. For me, the reason why is immaterial… what’s important is finding a way to navigate safely around that fact while mitigating risk. It’s a fact that the systems I subscribe to today may not be here tomorrow. Even worse, the developer may abandon the system mid-trade, resulting in catastrophic account loss. As a result, I mitigate risk by actively managing open trades; setting and adjusting stop-losses as necessary (some systems set a stop-loss but never move it) while also setting and modifying exit (limit) targets on open trades (thus overriding the system developer). I also close out all trades at the end of the week, whereas the systems I use keep them open.
I had the same experience. I would try a system. Thought it was great…then it would crash. I move on to another system. Over and over again. Until I finally left C2. I did find that the “extreme-os” was still listed, today, and it was the one of the many that I had used.
Do you feel conferrable letting me know which ones you have found reliable? Thanks Tom
Tom, you can still use the Grid and find “old” systems (more than 1,000 days for instance) with good return and low drawdown: https://collective2.com/grid
(Of course there is no guarantee that an old system will continue to perform in the future).
I apologize if my question has already been answered…
Of the 17 strategies whcih you subscribed to, how many had more than three years of live track record at C2 (or somewhere similar) when you started your subscription?
It seems many of the failed strategies trade futures or forex or sell options. If someone just avoids strategies these type of systems plus sticking to systems with less than 35% max drawdown many of the failed systems can be avoided.
you get it! Look at this log I have going: (Please Don't Comment!) Log of Lessons Learned From Closed Strategies I haven’t tracked how many fall into your categories but from what I can remember the majority are futures, forex, or sell options.
There is nothing inherently “wrong” or “bad” with the Futures, the Forex or the options markets, what is important is how the trader manages the risk (via his stop loss and position sizing).
Did I say there was something inherently wrong with with futures or forex or options? A subscriber must themselves manage the risk of the trade leader not managing risk well. It is difficult for a sub to manage the risk of a leader making poor decisions when they give the leader such large leverage usage. Even if a leader manages risk well in the past with stops or exiting trades it does not mean they won’t suddenly stop.
Can you find me some good stock only strategies to add to my log of failed strategies? I find them much more rare. They of course fail, but as long as a leader doesn’t go all in on one stock a blow up of the strategy seems quite rare.
PS somehow I knew my comment would attract a defense of leverage by you.
My comment was of a general nature, not a critic about your post.
The important question to ask is this one: Do winning C2 stock strategies make more money than winning futures/forex/options strategies, on a risk adjusted-basis?
And if so, to what extent?
This study alone should keep you busy for years!
In my opinion, a good trading strategy will ALWAYS make more money if the trader uses leveraged financial instruments, assuming he can control the risk.
I actually agree with you on the leverage part but similar to your ideal leverage usage thread you can have to much. With Futures, Forex, and selling options subs have no way to guarantee the leader doesn’t end up using too much leverage.
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.