System failure rate

Probably safe to say that 99% of the systems on here that trade futures will eventually fail or already have.


In my opinion, many systems don’t seem to have a systematic edge and/or money management rules , Also market behaviour changes periodically which means most systems that are not robust enough will eventually fail. ie. choppy markets versus trending markets.

Another factor is the huge leverage on most futures products. Huge leverage means returns can look great until a drawdown period comes which produces high negative returns which typically wipes out over leveraged accounts.

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I would say 99% of day trading future systems fail.

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It is everywhere like that. Any profession. Real professionals 1-2% of the total. This is normal.

How many people play football in the world? How many great players? Very, very little. Hockey. This is the same. Very good doctors too little. Great worker. Few. And so everywhere. 1-2% of the total mass of super specialists. 5-10% are good specialists. And others are the total mass - extras “theater”.


The problem is that even those very few good day traders will not be found here on C2. They don’t need C2 if they are good.

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Why do you think so?

I agree with Pete, if they are that good they don’t need C2. That is, veteran, experienced, rich traders. What’s a couple thou a month from C2 when you can make 5-10x that just from trading your own personal money or a registered fund?

However, I will note that Matthew’s article several months back about getting leverage for a young trader might make sense. If a very good younger trader is starting out, C2 is an excellent way to get leverage (income) on your system before you turn pro and go for the big bucks.

If a trader controls more than 10 millions USD, then you are right. And if they are not. That additional 30 000 -50 000 USD per year will be a good addition to income.

Looks like a few more systems blew up today.

Not surprised there since so many systems are overleveraged dangerously. Just out of curiousity which ones? lol

What systems blew up? Today’s rebound should saved a lot of systems. I saw a few popular systems down 30% + after 1 day. I don’t think any of them blew up. That’s why I’m avoiding future systems that has no contract limits. I just don’t like seeing 10 months of profit gone in 1 day. And thank god the sell off wasn’t like Feb that only lasted a couple days.

Yup. On my watchlist I saw a few that lost 30% as well. The main problem IS the overleveraging. Averaging down losers multiple times over and using large stop losses or no stop losses.

Why is there so few trading systems that use hedging techniques? For example there are put options on the S&P to hedge against the ES futures contract long positions.

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Why do you need to hedge paper money? That’s most likely the reason. You have no fear because you dont have any skin in the game. They just want get more subscriber or martingale down more. A few strategy definitely doubled down on Thursday.

Why can’t they can hedge with short position or puts?

Also I don’t understand why they don’t set like a 2% GTC stoploss when you are leverage 10x balance with futures.

Yes…thats the problem with the trading systems in C2. Most of them are here for testing or just to make money from subscriber fees.

Its the ‘who cares if my system crashes’ attitude as long as I make money attitude.

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There are a few legit ones but the ratio is low.

Interesting, I wonder what John Bogle and Warren Buffett would atribute this to…

both of my systems did well during the recent sell off (again)…

This one is my personal trading which was not live in February.

This one is my mechanical volatility strategy that survived the Feb crash without harm and outperforms the S&P500 for the whole year already - and had less drawdown all at once.

Thanks for your interest.

As a Series 3 professional trader, I know there are a few reasons why good traders might be interested in C2. Someone who is managing money professionally but having difficulty raising institutional funds for example. C2 and prop firms and other outlets are where some pros can utilize to tide them over and keep the lights on so to speak. As for why good traders have difficulties raising funds? Just like why any competent professionals sometimes struggle to find work, there are many reasons, from lack of pedigree, to trading style falling out of favor (industry is faddish), to weak industry connections etc. With a raging bull market in stocks very few money sources are even looking at futures and commodities. Also the 80/20 rule is brutal in investment fund allocation. It is more like 95/5.


Just to add to this, I once held a Series 3 and it was easier to raise funds from the general public than it was to get institutional funds. Firms tend to have a “Risk Profile” and if your strategy does not fit within this profile, even if it makes money, they are likely not to fund you. This was a common problem I ran into. Basically their risk profile is their business model, so my business plan (Strategy) was not compatible with their business model.