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Thanks Tim!
Cash signal is good position in trading. Why? Because this is the only position that you know for sure what the performance will be. It is a great position especially when the market is under pressure and the trend could be changed in a seconds…
I like this position from many reasons and especially from the point of view of my partners which liked it very much in the last 2 months 
Ok…Here we are asking the same question again…
Is Cash still the king?
Last time we asked this question was just a week before the crash in February and the answer was Yes. Big yes… (See this at the begining of the this thread… )
What about today?
Well, my answer according to my system output is basically no and yes… 
Why not?
Because it seems that the storm is over and now is the time to leave sideline and trade the market with all the funds… Many signs tell us that the fear is gone and a new wave of optimism has been started…This wave may last even years…
Why yes?
Because some technical signs start to flash recently telling to my system that although the sky looks bright, a dark clouds in the horizon and the risk can jump in any moment. Maybe Febuary was just the first dish…
So what to do?
As usual, the answer is lying in the money and risk managment… In this period we must change our attitude to the market very frequently… Maybe every few minutes or hours… Everyday could be totally different from the day before… This is not 2017 
This is a challenging period especially for the regular trader… We have automatic algo system and as a result everything is much easy for us…The system tryies to measure the risk at any moment and act accordingly, something which is almost inhuman to do…
As we said before, this is not 2017. This is 2018. Be careful! The game is tottaly different.
In summarize, Cash is not the king at the moment but we could see him back in any moment…
The good news is that historically the unclear environment usually last only a month or two before we will know better where we stand…
Is anyone share with me similar thoughts?
In my opinion, cash is NOT the king when subs have to pay high monthly fees such as $500 monthly or higher especially if it persists for months on end. This is where we discover which strategies are the most robust (during volatile periods). Most people can make money in a bull market so if the strategy is based on waiting for the next cycle I would stay clear of it.
AlgoSystems wrote:
“In my opinion, cash is NOT the king when subs have to pay high monthly fees such as $500 monthly or higher”
Do you still see a connection after 20 years of trading (as you mention in your profile ) between signals, money and risk management, to your subscription fees?? Are you serious??
If you think that the developer should be in the market because you paid him a subscription fee and the developer think like you do, both of you should leave the market and donate your funds asap…
I am speaking about measuring the fear and greed and how to reduce the risk to the minimum…
Cash position is the safest position in this game…The whole idea is to add/reduce shares according the risk/reward and if it is out of your spectrum then Cash position is your best choice…
The subscription fees should not be an input in any strategy
I totally agree. Sometimes, the best decision is to keep cash and wait for a better time to enter the market. I use quantitative strategies, which include automatic risk management mechanisms.
Currently, for my main Fund, my Algorithm indicates keeping 66% of the resources in cash. This represents a position in line with the current market situation. It seems to me.
Well if fees should not be an issue then a free months fee when there is no profit shouldn’t matter either? lol…
In fact, I do wish C2 should implement a no fee charged policy for systems that make no profits for the month! lol…But alas, that would probably drive away quite a few developers?
They cannot legally do that without changing their business model. NFA and FINRA would come down on them hard. That falls too close to pay per performance.
However, I do see where the subscribers are coming from. This site is a signal service provider, and to charge money without providing signals is at best shady. Unless it is explicitly stated that there could be months (or whatever specified time) without a signal.
@InTheMoneyResearch there are lots of shady people at C2 if you review the forum posts. I personally fell for one guy who claimed he worked on wallstreet and that he was guaranteeing making 5k monthly with his system and now he’s gone after making other sensationalist claims about other systems.
I’ve seen some other systems that stop trading once they start having subs as well.
This question came up here for the first time on January 18, 2018. Almost a year and a half has passed already but the question arises again.
My conclusion was that we were facing a dangerous time and the most rigorous risk management was needed.
A few days after the publication of this post, the market collapsed and volatility rose more than 100% in one day, which has not happened since October 1987.
All my strategies were out of the market long before it happened.
Now we are approaching again, according to my trading system, which includes a number of indicators that examine volatility in a different way than usual, to a similar situation. The risk in the market is huge and every day a very significant drop may begin.
We are not yet there, but not far away. It is enough that the volatility will begin to rise in the coming days, and then the markets may plummet to numbers we have not seen in recent years.
Since no one knows for sure how the market will behave in the future, we can only maintain a very low level of risk until it becomes clear whether it is a false alarm or that we are really facing significant declines.
The next two weeks may be critical.
My advice to anyone who manages his money through one of the strategies here is to check again and again the real level of risk and be sure that this level of risk is suitable for him.
All my strategies now are in a defensive position for already several days and any exposure to the market in the coming days will be done very carefully.
When the current situation becomes clear and my system announces that the great danger has passed, we will resume operating normally.
I will update this subject if necessary during the week.
Choose your strategy wisely!
Are you willing to offer any of your rational as to why you think we are facing a dangerous time?
My system is the fruit of development of a number of years and naturally I can explain the subject only in general to protect the IP and its customers.
As is well known, the market drops when pessimism rises and vice versa. Optimism and pessimism appear as waves in the market. The length of the waves can be sustained for minutes, days, weeks, months and even more. The large waves that continue for weeks and months are relatively rare and are the ones that produce the falls in the markets.
All these waves begin to develop in the same way, but sometimes they begin to gather more and more force like tsunamis. In fact, only when they are big enough see them clearly, but usually it is too late.
My system now identifies a significant wave of fear that is gaining momentum. This phenomenon occurs when pessimistic waves in different time periods harmonize harmoniously into one large wave which could end in entering to a bear market.
In most cases the pessimism disappears quickly but there is no possibility of knowing this in advance.
These measurements of optimism / pessimism waves are automatically carried out by calculating data coming from almost all the markets, mainly from options, futures and from a number of indices that measure volatility. The uniqueness of my system is expressed in the form of thinking out of the box in the way the risk is measured.
For example, if the VIX going up it is really not saying that the risk is going higher and we are going down. If it was so simple then we would not have to build trading strategies.
By the way, statistically, the opposite is usually the correct answer 
I belong to those who think that money and risk management are no less important than signals because even if you have good signals you can still lose money due to poor risk management. The combination of strong risk management and good signals is the basis of a successful trading system.
I always remind myself that first of all this is a game of defense and only then a game of attack.
If the defense is good then the profits will come over time. If the defense is not good then it really does not matter because at the end of the day the profits will disappear … with certainty!
As I mentioned before, we are not there yet but we are very close…
Caution for a limited period of time is usually not a bad idea …
Short update:
As we have seen in recent days, the volatility and the risk do indeed rises and every day brings new surprises. This is exactly how volatility fluctuates before a very significant turn, up or down.
At the moment, upwards volatility represents a huge risk to the market.
A destructive potential is front of us.
All we have to do is to keep a level of minimal exposure to the market.
As I previously noted, a very similar situation in terms of volatility appeared in the market just before the collapse in early February 2018. We are still not there but VERY close.
There are good new as well…
The good news is that statistically the uncertainty usually lasts only a short of time and then the picture is much clearer.
Probably that the coming days will be very interesting…
Short update:
As I wrote last week, the risk in the market is rising and the volatility continues to rise strongly today.
In fact, the market is on the verge of big move and very dangerous right now.
In my opinion, aggressive risk management is necessary now!!
Important update:
Volatility continues to rise today and the market continues to fall.
The first signal of the beginning of the possible collapse in the market has already been received this morning! 
As I already wrote here, my trading system has signaled a high risk level 10 days ago.
A further rise in VIX could ignite a very significant wave of sales and bring the market down to numbers we have not seen in recent years.
These may be the last days to exit the market or protect your open positions.
If the market eventually rises then no significant damage will happen and we will return to normal money management.
I am trying not to forget that the most important thing is not to lose money but only time!
Choose a good strategy with strong risk management and wait patiently. Do not be tempted to invest in a strategy with weak risk management. It could end in tears. In fact, it always ended in tears 
I’m glad my subscribers are smiling 
Robert, it will be nice that you run your month in proportion to long position size in VIXTrader Profesional. Or start writing on marketwatch.com or contact people like Peter Schiff.
Nevermind, I’m not sure why I’m reading forum and developers pep talk. Especially tickle me developers who are reading future and their systems don’t prove these skills. VixTrader Professional did not recognize December 2018 correction and did not take advantage of it.
Short update:
My volatility trading system shows that we are now in bear market.
To my opinion, active risk management and prudent market exposure are essential these days more then ever.
If the market eventually returns to the upside then my strategies will back to normal risk management.
Meanwhile, the risk is at its peak.
Be smart. Choose wisely!
I do like to read others’ points of view about the trend of the market. But I prefer to read articles that offer some depth, some rationale. Robert’s approach here is that of the believe me, I have 50 signals telling me the big picture type. The only one he’s revealed (I believe) is the use of contango/backwardation (unspecified, but presumably of the VIX futures front months). Robert did fine with his strategies in the vol fiasco of Feb 2018, I’ll give him that. Near to none of us chasing vol did great through the rest of 2018. Some did ok, but none were too great.
I’ll give you another signal with a much better track record: measure the volatility risk premium (VRP) in as many ways as you can think of and watch their trends. Find and read Tony Cooper’s 2013 article on “Easy Volatility Investing” for a primer and some fine examples. Calculate VRP yourself for the S&P 500 (or other index!) using several varieties of implied vol and realized vol, and watch the trends. In a general sense, when VRP is positive the market is happy and when negative the market is leery (or sad). VRP measures have significantly higher correlation to S&P returns than contango/backwardation does. They’re related, and significantly correlated with each other, but not measuring the same thing. It helped me manage my 2018 drawdowns and start back up before the December bottom.
Right now, VRP for the S&P 500 is modestly positive by most measures… it’s not signaling to take cover, not yet.
Another, very different, signal comes from the activity of market makers as they use equity options to balance their portfolios. There are several ways market maker activity can be estimated, but one that I like is “DIX” published freely by Squeeze Metrics, and found at their website in graphical form for the S&P 500 ( https://squeezemetrics.com/monitor/dix ). The DIX trends lower as a bull market gets older (and market makers get more risk-averse), and tends to pop upward in a dip when market makers gain confidence that we’re nearing a bottom. Values of DIX are currently fairly high after dropping a good bit lower back in April, signaling confidence that we’re currently in a dip, not a bear.
Of course, neither of these signals is remotely perfect for calling bottoms or signaling tops… nor are any others. But they’re just two of the signals that do not agree with the premise that at present “Cash is the King”. A safe haven, cash is, in this era of tweet diplomacy and trade war tit-for-tat, but it doesn’t make money for subscribers either.
The S&P did fail to break the highs on May 1st so hopefully this is only a retracement and not a bear market. The key 2700 level maybe the next target.
Dear v1Trader,
I read your nice post and I think it can be very interesting for those who analyze the market at the most basic level. Unfortunately, you can not use the tools you mentioned and produce a positive return when it comes to algorithmic trading.
The reasons for this is that they are too simple, known to all and do not cover the full picture of the market.
To make money in trading you must get an advantage.
The advantage can come from higher speed, advanced technology, different analysis and etc.
None of the things you mentioned, unfortunately, does not provide such an advantage in the market.
You can understand now that the trading system I developed doesn’t use any market analysis you have specified or even similar analyzes.
I would be happy to tell you exactly how my system analyzes the market, but then I will foremost harm my subscribers and my family who have already paid thousands of hours of lack of a father who was not at home because he was developing this system…
Well, since January 2018 the market was in backwadation in April, June, October, November and December 2018 and in May 2019 and I didn’t wrote anything about the risk here. The risk basically went higher but not as today. If my system were to analyze the market in the way you think, then you would see my reference to it here.
Well, the most important thing is not to lose and only then to make money. It is very easy to lose money in volatile market. Very easy…
If there is an investor or developer who thinks that at any time and in any market condition you can make money, I would be happy to learn from him…
I know three types of signals. Buy, Sell Short and Cash.
The safest signal is Cash and should be used just like any other signal. Those who do not understand it at first, will understand this after loses… I learned that 20 years ago after I lost millions of dollars…
The trading system tries to make money only when the risk / reward is high. Many opportunities appear during bear market and I am sure that we will see many trades in my strategies even if the market will continue to go down and I know that all of them will be under very strict risk management.
I don’t know when the market will start going up again and It’s not really important for me. The important thing, from my point of view, is to know that we are now in a very risky time and the volatility has a potential to jump up aggressively…
Great weekend!
