I’m not sure that I understand what you’re saying. But there are two different things. One is whether a profit-dependent fee is possible (and legal). The other is what percentage is reasonable to ask. If you want to have 10% of the profit of people with a 10K account, and C2 assumes a 100K, just ask 1% of the profit on this 100K account.
But I agree with all criticisms on a profit-dependent fee. I should not help to develop it in this thread 
Oops, I adressed this post to Pal but most of it was a reply to Fanus. Probably I offended both with this… Sorry! Believe me, I know the difference very well…
Jules
MK … do these pay-for-profitable-trade systems start and stop instantly as far as subscriptions are concerned (as opposed to being billed monthly) so that one could pay the tuition and fees for a very well defined number of trades only (+ 1 trade in case of an open trade at termination)?
I want to comment 2 point
1. Outside C2
In my work experience usually a trader named “Guru” or CTA or fund manager do exactly this; he charge his subscribers with % of monthly net profit (usually 30%), in the brokers world it is normal.
People subscribe this kind of account basing it to trader history, equity curve, past result, trader reliability, etc…
What i want to say is that no serious trader (or broker) use despicable tricks to gain more money and destroy subscribers account because surely he should work only 1 month
2. C2
I agree with Matthew, % of monthly net profit is not practicable here, he just said the reasons.
I think “per profitable trade” is a good compromise.
People can subscribe a system seeing c2 performance, speaking directly with system developer etc… He knows the costs and the risks and also he can unsubscribe immediately from it. Subscribers are not stupid.
You are dead right,
But then everyone must be registered as CTA with all the legals and regulatory aspects as MK said ? And are you yourself very well knowlegable for the billing of performance fees that include
the high water mark formulas and the equalization formulas ?
Charging a monthyl fee, per trade or whatever is simple, but not so with the high water mark and the equalization formulas.
At least I could not do it myself !
Regards
Charles
Randy, MK’s ultimate answer may contradict this, but my experience with pay-per-profitable-trade with the Magnet system was that I was charged for the entire month. That is, if I had reduced my auto-trade allocation factor to 0% for a while to block some trade signals, I would still be charged for the privilege of seeing/receiving the trade signals.
Thanks Alan … I would expect to be charged up until the time I actually canceled the subscription, but would also expect to have charging stop instantly upon cancelation (plus no more than one open trade if I canceled with a trade still open and it subsequently closed profitably).
Randy
