Does anyone have any suggestions for improving credibility of C2 vendors?
In specific, I want to point out RWB 20%. This is not good for other legitimate vendors if subscribers sign up to the worst systems, lose a ton of money, and then everyone loses.
Here is one of my suggestions:
Create risk measures that any good trading house might use and force systems to follow them. In other words, you run your own stops and leverage risk on the systems or have that as an option. Sorta like each system is a prop trader and you are the prop house: may not work for many/most systems though.
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I haven’t actually tried the auto trading. Is this already a built in feature? If so, it might be good to establish some various rules the subscriber could overlay and then run a backtest over the system to see how those rules would have effected profitability or loss.
The equity curve itself more or less becomes the policing agent for many systems that do excessive averaging down, since it usually shows up there. But, as I say “drawdowns in the mirror ar larger than they appear” - meaning people look at a curve, and many times dismiss big drawdowns, since it was the past, and system did recover. I fall far this bias too, sometimes.
The link to traders other systems is good to unmask people who throw a lot of systems up there, hoping one does good. Of course, some vendors just create a new account and start over.
The worst case after slippage stat does a good job unmasking the scalp systems that never work.
Subscriber comments, My Analyst entries also help.
The problem for any vendor is that if you or I bash another system, it looks like a conflict of interest (don’t buy theirs, buy mine instead).
Education is key, but many people will still be attracted to these seemingly-great-but-really-terrible systems, as Broadsword says, like "moths to a flame."
Kevin
+1. I think C2 already does a better job than the others in providing a lot of metrics, reviews and comments. I doubt changes will help the newbies who want to retire in 8 months on a $3,000 account, with no more than a 3% max DD or a $75 monthly fee…
Curtis,
I would say that you need to be very careful of systems with high winning percentages. I spent four years on a trading desk and watched them blow up time and time again. A system based on averaging down will never be a profitable trading system in the long-run. We used to watch people blow up everyday trying that. You said you’ve never tried autotrading. I’d offer that if you do, go with OEC which has a good setup with Collective2.[LINKSYSTEM_41654963]
Excellent advice! I hope newer folks here read your post, and really let it sink in.
Ross and Kevin are 100% right.
Averaging down indeed is becoming a hot topic in the forums & chat and with reason. Newbies like high +60 win% systems (i.e. their biased reviews:“Wow, 16 winners out of 18, a great trader!”) but these systems, 99% of the time, are avering down.
C2 however helps you to avoid them.
The best way to spot them:
1. C2’s risk indicator in trade list: low - normal - high… and ofcourse extreme… Indicates intratrade drawdown. Can also be seen by short downspikes in a what looks like a nice equity curve.
2. Calculate the expectancy: avgwin% * avgwin$ - avgloss% - avgloss$. Calculate it per unit/trade too.
C2 points out the dangerous high win % systems for subscribers, yet maybe it might be even better indicated for newbies.
MARTIJN D
P.S. Ross, were you a bank based trader? What did you do as a job? How much system trading & high frequency trading is done at banks? It’s such a mystery what these cowboys really do as a job.
Does OEC (or other brokers) have active risk management in place to set daily loss limit, position limit, position loss limit, number of trades limit, and other risk reduction measures, such as ensuring all positions close at EOD ?
This type of fail-safe risk management would be attractive and important for me if I were to auto-trade.
what was the name of that system where I can retire in 8-months with $3000 starting capital with a 3% draw down and a $75/month fee. That is just the system I have been looking for!
Jim
James,
You have to be quick, those systems don’t usually last long. The problem is by the time you see them, they usually tank (along with your money) soon after.
James,
You suppose to be happy subscriber-billioner of Gen2/Gen3. (smile)
Eu
Happy? Yes. Retired in 8 months? No. Maybe I’ll suggest to Kevin that he increase the amount of profit on Gen2/3 and reduce the draw down. I don’t know why I didn’t think of that earlier.
Jim
Heh heh. it’s touchy. Everybody cares about poor subscribers. Fantasy writers, educational letters sellers, trolls and faked persons. it’s really, really touchy.
More serious. Instead of mumbling useless mantras about averaging down you have to check fundamentals. And the fundamentals are very simple. Ripping/milking of subscribers at C2 is over profitable. There would be always supply of short-term guys who is making few bucks in current C2’s business model. Current business model rewards short-term ripping and the model has benefits from it. heh-heh.
Anyway, I’m not complaining about it, business must be profitable (smile). Some time ago I proposed to use C2’s database of failed systems. The idea is very simple. C2 has huge database of failed systems. If you look into some current high-flyers and already dead systems you would definitely see correlations in DD/position management/profit targets and so on. Sometimes different systems under different names looks like one one person creation. So I proposed to show failed systems that are correlated with active one on the system page. In the case you’ll have hard stats about already failed C2’s systems with similar approach instead of useless blah-blah-blahing from fantasy writers, educational letters sellers, trolls and faked persons.
Eu
"So I proposed to show failed systems that are correlated with active one on the system page. In the case you’ll have hard stats about already failed C2’s systems with similar approach instead of useless blah-blah-blahing from fantasy writers, educational letters sellers, trolls and faked persons."
WOW! That is a very good idea!!
yep.
