unhappy with Collective2

[hilmy83]

Collective2 (C2) is not ideal for scalping strategies. All the subs replicate the orders from the manager through market orders. So if the strategy scalps limits, you will get slipped with C2 latencies.

C2 is also not ideal for futures. CME imposed a position limit on C2 manager if they have too many followers. This means C2 will force the manager to trade smaller size (sometimes all the way down to 1 contract), but the subs can scale to however many contracts they want.

C2 takes 50% of your subscription fee (40% if you link your broker to C2). It's pretty insane they would take that much in commission. And the fact that subs just pay flat fee, even if they scale seems unfair to managers.

The ideal business model would be

• to replicate orders as is (limits, order stops, etc). Leave limits on for determined period set by subscriber (exit right away or give few seconds till limit is filled when manager is flat).
• Charge by the share/contract where subs pre determined how much they want to put on.

But there's nothing really that can deal with scalping latencies. That's the problem with signal following platforms. It's better if the subs jsut trade themselves; or if it's automated the subs can lease the bot and just trade directly without platform latencies.

 

[TheDawn]

That's poor as win ratio is one of the most irrelevant factors. I'd even argue that win rate over 80% screams implosion risk.

With a max. drawdown of almost 50%, anything short of a 100% win rate is an implosion risk. The win rate of less than 50% just exacerbates the risk tremendously. The thing is with any proposed strategy, you have to be able to trade the trade and not just talk the talk. If you think a strategy is good enough to be recommended to someone then it should be good enough for you to trade it yourself. Then you wouldn't be miffed if they don't like your strategy because if they don't, it would be their loss. You would just trade it and laugh all the way to the bank. That's my 2 cents.

 

[d08]

With a max. drawdown of almost 50%, anything short of a 100% win rate is an implosion risk. The win rate of less than 50% just exacerbates the risk tremendously. The thing is with any proposed strategy, you have to be able to trade the trade and not just talk the talk. If you think a strategy is good enough to be recommended to someone then it should be good enough for you to trade it yourself. Then you wouldn't be miffed if they don't like your strategy because if they don't, it would be their loss. You would just trade it and laugh all the way to the bank. That's my 2 cents.

Not quite. His huge drawdown just means the leverage is unrealistic, he needs to divide his position size by 3 to be taken seriously. 50% win rate is perfectly fine and means that he is taking losses constantly and risk is managed. High win rate typically means the losses aren't managed well or are potentially catastrophic. I used to trade a dip buyer over a decade ago that was like this, win rate was over 80% and the strategy was failing as the losses were massive.
There's a reason why nearly all of the so-called legendary traders have low win rate, often even below 50%.

 

[TheDawn]

Not quite. His huge drawdown just means the leverage is unrealistic, he needs to divide his position size by 3 to be taken seriously. 50% win rate is perfectly fine and means that he is taking losses constantly and risk is managed. High win rate typically means the losses aren't managed well or are potentially catastrophic. I used to trade a dip buyer over a decade ago that was like this, win rate was over 80% and the strategy was failing as the losses were massive.
There's a reason why nearly all of the so-called legendary traders have low win rate, often even below 50%.

Having a good win rate is still beneficial for your trading. Being able to get a 200+% return but only able to profit 1% of the time in an extreme case still won't make you profitable. It's just that having a good win rate is not enough and it's better if you have a high return:risk ratio.

 

[d08]

Having a good win rate is still beneficial for your trading. Being able to get a 200+% return but only able to profit 1% of the time in an extreme case still won't make you profitable. It's just that having a good win rate is not enough and it's better if you have a high return:risk ratio.

1% is a crazy extreme that doesn't exist in the real world and you'd still be wrong, it's possible to make good returns in theory. Almost all the stuff with great risk profiles gets 35%-65% win rate. It's an irrelevant metric.

 

[rb7]

Having a good win rate is still beneficial for your trading. Being able to get a 200+% return but only able to profit 1% of the time in an extreme case still won't make you profitable. It's just that having a good win rate is not enough and it's better if you have a high return:risk ratio.

High win rate is good for selling trading strategy.

Low win rate is good for making money.

Of course risk-reward ratio play a big role here.
Win rate by itself has very little importance.

 

[heispark]

There are just too many trading platforms in the market. One or two nominating platforms should be enough and make our life easier.....

 

[TheDawn]

High win rate is good for selling trading strategy.

Low win rate is good for making money.

Of course risk-reward ratio play a big role here.
Win rate by itself has very little importance.

I believe in having both a good return rate AND a good win rate and I never look at win rates alone completely ignoring the return rate but I do have a basic win rate that I consider required when evaluating a strategy and I speculate many investors do as well. It's just natural. What's the point of having a good return when you are not going to be able to obtain it when the win rate is so low and it goes hand in hand with risk. How can you say a strategy is not risky when you lose more often than you win? Letting the profit run requires that you win first. And finally it IS possible to have both a good return rate and a good win rate. They are not mutually exclusive of each other.

 

[Snuskpelle]

That's poor as win ratio is one of the most irrelevant factors. I'd even argue that win rate over 80% screams implosion risk.

That, plus the closer the win rate is to 50% the easier/quicker it is to actually evaluate the expectancy. So if a vendor skews their WR up for no reason it is detrimental to their client even assuming they weren't trying to hide negative expectancy.

 

[d08]

That, plus the closer the win rate is to 50% the easier/quicker it is to actually evaluate the expectancy. So if a vendor skews their WR up for no reason it is detrimental to their client even assuming they weren't trying to hide negative expectancy.

Absolutely. It's fairly easy tweak the win rate, much harder to do that to relevant metrics. I mean, all basic option writing strategies inherently very high win rate and high failure rates.