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I plan to resize my system tomorrow. The idea is to start every month with app. the same amount.
So should I rescale on the 30th, after the close, or on the 1st day of the new month? I am not even sure if there is a difference, but I don’t want to affect the % for the ending month…
Why do you want to rescale? I guess I’m missing the rescaling point entirely?
The account is up 60%. If I make the same amount of profit next month, %-wise it will be only 45%, since the base has grown… If I understand correctly, the monthly % return is always based on the previous month and not on the starting amount.
Assuming constant growth and not scaling up with the number of contracts the % return will be less and less… That is what I am trying to avoid…
Personally I would scale up the number of contracts because it seems easier to do that rather than worrying about updating C2. But that’s also how I would manage personal accounts so it seems natural to me.
Also consider the fact that the impact of your fee is lower in percentage terms. You will find some systems on this site who have long successful histories don’t rescale or run large accounts. I can’t read their mind but I imagine one of the reasons is they can collect a standard fee that has a smaller impact on the posted performance as the account grows. I don’t think many subscribers take this into account when they are comparing systems.
You may want to let your account size grow, but continue trading at the same position size as before. Plus 60% is a great start, but unsustainable. Most successful (long term) managers scale back their leverage.
I don’t want to scale up for several reasons. I am trying to simplify the system for the subscribers, not making it harder to figure out how many contracts they want to use. It is also easier for me in the long run, if I use the same number of contracts all the time. Also, if the number of contracts is big, that effects me psychologically. I am not sure about the trading engine, but could have problems with fills too (partial fills and such).
So it seems to me it is easier just to rescale the system at the end of each month if the returns are good… If I keep changing the number of used contracts, that confuses the subscribers…
What do you do after a losing month? Collective2 will not re-scale up to your target starting price. Build a cash cushion.
What is a losing month? 
Obviously I don’t rescale after a losing month. Also, if the account is only up slightly, let’s say 10-15%, this isn’t a big issue, but I would rescale after 2 consecutive 15-15% months…
Anyhow, this thread isn’t for debating the rescaling issue, but for deciding when is the best time to do it without affecting the stats…
I had a feeling I am going to get screwed with the rescaling. The % shouldn’t change, but nevertheless my 61% return for September went down to 39%. Should have waited until tomorrow, I assume it wouldn’t have affected the already finished month, but who knows???
Pedro:
When you change the capital basis, of course the percentage returns change, because your monthly subscription costs remain constant.
Since my subscription is free (cost of zero), I don’t see how that effects the issue…
Or you mean what I am paying? That is like $20 per month. Or are there other fees I am not aware of?
Ah, I see. It just some time for your commission costs to get recalculated. Now your return is exactly as it was before rescaling.
Thanks, both problems got resolved.
Going back to topic, I successfully rescaled back to the starting 25K, and plan to do so anytime when the account is up more than 20% at the end of the month… This is for the subscribers’ sake…
I guess there is no difference between end of the month or beginning of the month rescaling…
I wouldn’t rescale, or would at least wait until you have doubled or tripled the account before doing so.
Well, I already rescaled, so it is kind of academic at this point but:
*Most managers lose money. So following most people isn’t always the best idea. 
*I can have a huge drawdown with a tripled account, so I don’t see the point of tripling first. The relative DD compared to the account size what counts, not the absolute size of the account.
I am trying to simplify, not complicate things…
