If you’re sweating bullets with your trading decisions, it tells me that you don’t have confidence in your own trading system. No better way to weed out those lacking confidence (and discipline) than having them put their own money at risk.
If you donât have enough confidence in your system to trade it with your own money, without hesitation, even if you’re in a severe drawdown, why should I have any confidence following along?
This makes sense. However not everyone has the computer technology to generate signals.
Agree a little bit. Every one play their own roles. Not everybody can play all the roles. Even if someone give me paper signal and I can earn money, it is fine to me.
It’s not about confidence in your system it’s about being a lower level emotional human being which most of us are here in this world. Some systems would crash with subscribers, is this how you would weed them out as you say? I thought this was about saving subscribers, your solution would possibly hurt more than are helped that was my point.
You have confidence in following along because someone is trading well and not because they are auto-trading. The real solution here is to trade systems that have been time tested. Minimum of 2-3 years track record. The trouble is that does not leave many good systems so people go with the young untested systems. When this is done there are consequences which some think can be overcome by forcing vendors to auto-trade their own system.
The bottom line, some will never be able to trade with real money but some of these individuals will do very well with paper trading. So let them and give subscribers more options. This proposal of auto-trading vendors limits choice and freedom.
The problem is this, some systems can only be manualy traded and code can be tinkered with by an emotional vendor.
In market a human being should not have confidence.
Only God has confidence.
Whenever I hear “confidence”, I connect it to “over confidence”.
Because a human being doesn’t have something to let him have confidence in market.
A correct word should be " caution".
Does owner of “Topaz NQ100 M” should have confidence?
He has been most sucessful in C2 but he will be over confident if he talk about confidence.His system did well in a bull market but did poor in a bear market.
So it’s hard to say how his system will be in the future. That is one example that everyone should be cautious with regards to market.
When people blame a developer lacking confidence in his own system,they misunderstand how market works and have unreally too high expectation for developers.
I think people would just care what benefits them most. If I am a vendor, I only care how to make good trades. If I am a subscriber, I only care if I can make money by following the systems. I don’t care at all if the vendor is paper trading or trading with their own money. I once subscribed some good systems and I really don’t care what they trade with paper money or real money. If somebody yelled spx would go up big when SPX was 1265 and now the spx is 1350 and I followed him to make good money, I don’t care if he is Warren Buffett or a homeless guy. If he can reapeatedly predicts the market correctly, do I care if he paper trade? Not at all. I only care if I make money, why do I care if other people make money?
The question of whether a vender should autotrade his/her own system is a valid point. From a subscriber’s perspective of course I would feel better investing along side of a successful vendor, trade for trade. But I think that if a system is entirely manual, then keeping personal profit/loss out of the method equation can make for better unbiased opinion of market direction. I know from personnel experience that I had to write a computer program of my trading method in order for it to work. I have just accepted the fact that I can not manually trade. The emotions take over and cloud my judgment. As long as I have a EA entering and exiting trades, I can monitor the news events and other indices. I don’t think auto-trading my own system here at collective2 is an issue. If a track record is what subscribers want, then seeing it here at C2 is what they should get.
Not auototrading does not equal to Not trading with real money. I am a little bit old fashioned and can not catch up the computer technology.
Let me take an example how a developer doesn’t auto trade his/her own system but his system could be still good.
If I use a system with bigger leverage, I will have larger drawdown with larger profit.I can tolerate larger drawdown and enjoy larger profit, yet subscribers don’t like this system.They can’t tolerate larger drowdown. They would rather have smaller drawdown with smaller profit.
So it’s natural for me to trade larger drawdown larger profit system for myself, yet use smaller drawdown with smaller profit in C2 for subscribers.
Sounds sophisticate, I agree anyways
Trading is highly psychological. If you want to trade live accounts with the lack of fear you find while paper trading, never risk what you are not willing too lose. Doesn’t mean you desire too lose it, but you will not cripple your account by losing it. Focus on the trade, not the money. Kinda like you do when paper trading.
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Let me throw in my opinion as a signal provider who uses broker transmit for signalbroadcasting and thus I´m 100% TOS. ( https://collective2.com/details/106654155 )
I see many systems on this site which are performing extremely well in the current market phase. They aren´t TOS although you need only little money (5-10k) to trade them. So why is that? The brutal truth is that it is quite easy to formulate systems which are successfull in a foreseeable future. These systems will attract subscribers in hordes within a couple months. If the developer of such system is lucky he makes a very decent amount of money off the subscriptions before his system crashes when market conditions change. He fully knows that this event will happen so he doesn’t put a penny into his own system. When the system crashes he can just go on, create a new C2 account, create a new strategy (with the same logic) and start that game again.
It is way harder to develop systems that are stable in the long run so a decent trader/developer would consider them to autotrade. Now ask yourself, would you trade your own system if you know it is working in the long run - because you designed it to do so? I think we can agree on a big YES.
So if I would look for systems to subscribe I would honestly only consider TOS systems. (Fortunately I don´t have to look any further than my own system in which I have - of course - more trust than in any other system. But that´s also because of creator’s bias. There are a few great ones out there!)
Those highflyers I can easily design myself but what´s their use? I want to grow my money long term and not going from boom to bust every other year or so. And my humble opinion is that subscribers don´t want that neither so they have better chances with TOS systems/traders.
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I agree with a lot of your thoughts on the high flyers. TOS is somewhat of another matter.
What if you were trading, say, SPX (for size/commissions and tax benefits) but wanted to make the system more accessible by offering it with SPY signals? Also what if you had a number of non-published strategies running in your accounts, or you are hedging with futures or somesuch on your own overall portfolio? Then there is the issue of your broker may not be supported, etc.
There have been people with TOS that have blown up and/or gone on tilt, so I’m not totally convinced of the value in that regard. I think a solid number of trades, consistent with the methodology of the model already outlined by the developer, in conjunction with a communicative/available model developer/manager are probably more valuable.
You have the same kind of “blow-up” risks with hedge funds and other managed account type services, but the difference with C2 is at least you can see the trades, you can compare the nature of them to what has happened in the past in terms of style/nature, and you can hit the stop button quickly and access your funds. You in essence can be the risk manager for the model. That level of transparency and control is really a good thing.
Yes there is a drawback to it in that it can be bad for people who don’t tolerate normal drawdowns well, and who may be better served by a lockup period where they can’t exit, but that really goes down to experience of the investor and whether a particular strategy is a good fit for them.
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Just to clarify, I didn´t say that TOS should be the only feature to look at or that every strategy with TOS is somewhat safe. Every investor has (hopefully) his own set of criteria that he is checking before subscribing to any strategy. I´m just saying that TOS is an absolute must-have for any serious strategy because of the issues I mentioned above.
For the other concerns you mentioned, I´d just say a good trader who is really interested in signal providing as a businessmodel will be able to solve these issues without giving up autotrading/TOS. The easiest and most obvious solution is having multiple broker accounts.
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I understand, I was just pointing out that TOS isn’t really the mark of quality that some may think…
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