Hi there, I am a long time professional trader and thought it would be interesting to start some strategies here on C2. I am quant trader using a mathematical cycle model to trade most asset classes. My question is…what are people looking for in a trading system to follow? What’s on the wish list for a potential subscriber? What draws subscribers to one system over another? I know that’s more than one question, but they are basically the same thing just worded differently. Anyways, thanks in advance for constructive feedback…Ben
I would say, consistent profit and low drawdown.
5 Likes
I would say, consistent high profit and no drawdown.
1 Like
Well, RobertFisher, when you find one such strategy, please let us know.
Personally, I would like a system that would return a consistent 20 to 30% annually, IRA compatible, drawdown under 10% and a developer that will communicate on occasion. I like seeing hedged positions to help prevent some large unseen event losses.
2 Likes
I would say, consistent profit and low drawdown.
Hi Dennis, thanks for describing my strategy ETF Capital Builder!
Best regards, Jim
Thanks for the feedback guys, pretty much inline with my trading style so stay tuned. I have a multiple strategies (ETFs, Options, Futures and Stocks) with low drawdowns and decent returns that I have been running, all based on my Quant models. They are set to private until I can build up the track record for at least 3 months or so, I refuse to release something to the public until it has been battle tested in my real accounts with $.
Ben…
1 Like
This is exactly how I have come to think RE: return expectations and drawdowns relative to leverage used. It is the underlying philosophy of how I originally designed my model that I have here, I am not actively promoting it yet as I am waiting for it to generate enough history on C2 that properly represents the nature/stats of it, but I believe when you do this long enough, shooting for ~20-30% annualized return with tail-risk hedging ends up being the sweet spot of what is possible without taking crazy risks, and it is something people can stick with / tolerate for long periods of time which is a key to actually making any real sustainable money.
There are so many potential pitfalls with a lot of “high flyer” models out there with regard to leverage, tail risk, transaction costs, slippage/liquidity issues, trade frequency / sensitivity to fill quality, correlation to the underlying, not to mention just straight out statistical randomness, that I would suggest people be very careful about chasing hot returns…
Don’t worry about it. The subscribers are smarter than anyone else. When they subscribe your system, you are simply a labor for the subscriber. Nothing more than that.
1 Like
Given that the SP500 had a 57% drawdown in 2008 and the Russell 2000 had a 27% drawdown in 2015-2016, I think a 10% drawdown may be unrealistic in the long run for a 25% positive strategy.
3 Likes
Yes I agree, I believe if one looks at the research (of the best hedge funds and CTAs on Earth in modern [>1960s] history), over the very long term it is very difficult to maintain Calmar ratios much above 1, and above 2 would be a serious outlier on something like >20 years of returns. There are “typical” drawdowns and there are “Max Drawdowns”,
I would think most people could live with typical ones in the 10% range and a max in the 30% range. I would think systems with 50-60% typical drawdowns are going to be very hard to follow for someone without exact knowledge of the mechanics of the strategy.
2 Likes
hi BenB,
What assets have you traded? do you care to show your track record?
I would think the following can be what people desire (I certainly look for those):
- high returns and low PnL Volatility = higher sharpe ratio
- small and short-lived drawdowns
- zero correlation with the market (SnP)
I have traded mostly equities (globally), options and futures, some other derivatives like P-Notes, Swaps and CFDs. Limited fixed income and forex. I will be happy to share my track record when I feel like my strategies are ready for public launch. My goal is consistent, low correlated returns in the 30% range with manageable drawdowns. It also has to be manageable with realistic fills etc.
2 Likes
As someone who provides a system with 20%-30% returns and low drawdown, what people actually subscribe to around here is 80%+ return systems. Track record length only needs to be a few months. There are always young systems with incredible gains and people chase them. Yet where are those systems a year later? The result is most people on Collective2 lose money. No joke.
7 Likes
what about your (failed?) ETF Volatility Timer system? 
2 Likes
Amen, brother… As a subscriber to (and lover of) David’s system, I confess that I can’t stop looking at some of the high return stats systems… it’s a mind game of - what if I got in before it crashed and burned?
1 Like
Question…Is 20 to 30% annually really that great? Does it really get it’s basis of performance from stock trading? 20 to 30% annually in the derivative world seems a very low return in my opinion.
20%-30% a year is very good. Most hedge funds don’t even do that well. Obviously more is better but can anyone really do better for any length of time, especially if they have a lot of money trading the system? I doubt it. A system that makes 100% a year will quickly have a MASSIVE amount of money in it within a few years and stop performing.
2 Likes
Would that also be a good return for an options or forex trader David?
