I find it quite odd that the ranking of these two strategies if roughly the same at 238 and 251 despite one being older, higher returning, more trades, etc.
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@InteractiveAssets Look what happens when someone tries to subscribe to this system. Maybe that is why Found It has more AUM…
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I don’t want to badmouth a strategy…however, “Better do now” looks to me like a martingale strategy or a strategy that cheapens in losses. I would be very careful with that!!
C2’s ranking system is always an issue and I’m afraid there will never be a ranking that everyone is happy with.
I also find such statements strange.
In the top 7.1% of C2 but only a rank of #230?
My system is at rank #58 but only in the top 7.1%?
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Here is another example of why I think the ranking system may be in need of some tweeking. Look at these two strategies of mine. I think its wild that the short history negative return strategy is ranked while my other one is not even ranked despite years of history and a net positive return.
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@Fabi Your warning was spot on – that strategy is down 33% for the month.
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Unfortunately yes. The current leverage becomes higher the further the strategy is in the red. A very clear sign of a Martingale strategy.
I can only recommend everyone to look for strategies via “The Grid”. And corresponding red flags should be taken into account when making your selection.
Unfortunately, if a strategy makes 100% in 6 months, it will attract more subscribers than a strategy that makes 30% annual return for 3 years. However, there are very few strategies that, after 100% in 6 months, will still run well in the next 3 years or have not crashed.
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Isn’t it safe to say such strategies always do multiple transactions in a single trade? (Add to loss and hope the maket can come back?
Martingale pattern does require multiple transactions in a single trade, yes. But of course there are other ways to kill a strategy, like taking a single, big leveraged bet that goes south without a stop.
By definition, martingale systems do not require every trade to have multiple transactions because, sometimes, the trade can be right the first time. In practice though, nearly all martingale style trades do involve multiple transactions.
We should note also, that not every system that has multiple transactions on a given trade is a martingale. Some systems chose to “average in” and “average out” of trades because they have strong confidence in the trade direction but are unsure of exactly the right place to enter/exit. Generally, dollar-cost-averaging operate off this concept.
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Great points. I was also thinking a person could technically close a position then immediately reopen a position that has doubled down weighting then repeat. Though I haven’t noticed someone doing that.
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This is a worthwhile topic to explore further at some point. I notice that many investors (vs gamblers) wisely learn to avoid martingales, often through very hard experiences. However, without really understanding what a martingale is and the dangerous mentality behind such systems, it’s certainly possible for trade leaders to foolishly/slyly deploy what is actually a martingale.
As I’ve also pointed out, It’s also possible to incorrectly label a system that sometimes adds to positions (including profitable positions) as a martingale just because their trade record shows multiple transactions in a trade.
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The Leverage chart overlay makes it pretty easy to identify Martingales – big leverage spikes on drawdowns.
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I really like the leverage overlays. It can still be a bit tricky to define at times. Because there are strategies that emphasize it more or less.
For example do we think these two are or aren’t martingale? They are two separate strategies.
I always study the individual trades in question to answer that question, don’t just look at the chart to pass judgement. Do they lever up their losing trades excessively? Does it seem they use that leverage to attempt to escape a losing trade? How else do they use leverage? A chart can’t tell you that alone.
I think that’s wise, as much as I do appreciate that chart feature.
