YM Magic!

[Pekelo]

If I had a million dollar, paying $500 to $1000 fee a month, expecting 10% DD but 1 million profit a year without doing anything

Theoretically this is how it should be done. Practically there are (at least) 2 problems with it:

1. It is very hard if not impossible to find 5 systems like you listed. And if you only use 2-3, you are exposed way too much.
2. Most of these type of systems die or suffer big DD just around the 6-7 months time frame. I never seen one making it to the year mark without a horrible DD.

Also you want to see at least 3-4 months returns before you jump on the band wagon, so by the time you do it the system is 2/3rd passed its useful lifetime.

 

[Pekelo]

I browsed some C2 traders records and there are a couple excellent trading records like these two: 1) Mcprotrader, 200% return in 6 months, DD 7%, 100% win month; 2) Simplicity trading, 128% return in 6 months, DD 11%, 100% win month.

Mcprotrader is already slowing down, the last 2 months returns are "only" 6 and 7%. That is how it starts, the chart flattens out then the DD comes.

Simplicity is averaging down, I am guessing. Starts out with 2 contracts and ends up with 20, big red flag. There is one huge trade that is 3-4 times bigger than the rest of the winners.

OK, let's make a prediction: Both of these systems will blow in the next 3 months and will have an at least 30% DD....

 

[jl1575]

The idea is to get a basket of traders with DD around 10%, and evenly invest. If you choose 10 traders with less than 10% DD, and then in a given month, if 3 traders out of these 10 got a unexpected DD of 30%, you still have a total DD about 16%, and it could be lower as some of the traders may have a lower than 10% to compensate that in that given month. In any event, avoid those DD from 40% to 60% to play it safe.
Another thing, some of the traders may not have a very high return, but they play it safe, using a setting of $25000, they play only one contract. So if they have a low DD, they should be candidates too. For a lot of people, even 30% to 50% return a year is fabulous with a large capital, the most critical issue is to have a low DD to play it safe, as mostly you don't have much control over the trades; so the only thing you can do is to pick those with consistent low DD over a period of time, and reduce risk and allow some fluctuation by assembling a group of low DD systems.

 

[bbpp]

I browsed some C2 traders records and there are a couple excellent trading records like these two: 1) Mcprotrader, 200% return in 6 months, DD 7%, 100% win month; 2) Simplicity trading, 128% return in 6 months, DD 11%, 100% win month. So here is an interesting idea, if you put your capital evenly around several C2 like 5 of them of these performance, and then autotrade them, would it be more profitable than trading by yourself if you are not quite sure, or it could beat even those very good hedge funds because if you average among those, you could possible get a high return than 100% yearly. Of course some of these records are not quite long, and they are hypothetical. But essentially if you pick the right ones and when you average them you would get a much better EFT of your own with consistent low DD and and high % return and high month win rates. If I had a million dollar, paying $500 to $1000 fee a month, expecting 10% DD but 1 million profit a year without doing anything or spending anytime of my own but just to make sure to pick a reliable broker, I think it is probably worth a try, making a lot of money though not much fun.

Actually many C2 subscribers are doing exactly this kind of things.
But usually they take 8-10 strategies, make like 50% a year.
The two strategies you mentioned are not as good as you think.

1.Mcprotrader
The first 4 months performance had been greatly exaggerated.
Since according to C2 rule, limit orders are filled as soon as there is any trade at the price.
So set an option limit buy at 0.05 and sell at 0.10 would easily make a huge gain, but these orders are not going to be filled in the real market.
The developer used this technical to make false performance. His real performance is like 7% monthly.

2. Simplicity trading:
This is a martingale strategy.It makes profit by adding to losing positions and wait market to come back. So the risk of blowing up is quite high.

 

[Pekelo]

The idea is to get a basket of traders with DD around 10%, and evenly invest. If you choose 10 traders with less than 10% DD,

Again, in theory it sounds good, but in practice, not so much:

1. Subscription fees add up. When you subscribe to 10 systems even if on average it is $150, that is 1.5K just in fees monthly. For easy math, you expect maybe 2-3% monthly from your 10 systems trading let's say 10K each, so the fees (1.5% on 100K capital) cut into your profits by 1/3rd-1/2. That is a huge price to pay for diversification.

2. It starts to complicated when 2 different systems trading the same instrument go in opposite directions, effectively canceling out each other.

Others got this same idea on C2 (nothing is new under the Sun) and I have talked to a guy who I think subscribed to 14 systems. His overall results were up, but it was nothing to write home about, certainly not 30-50% annually.

Bottom line is: Diversifying helps with safety but also kills performance...>>>>as usual, no free lunch

 

[jl1575]

Actually many C2 subscribers are doing exactly this kind of things.
But usually they take 8-10 strategies, make like 50% a year.
The two strategies you mentioned are not as good as you think.

1.Mcprotrader
The first 4 months performance had been greatly exaggerated.
Since according to C2 rule, limit orders are filled as soon as there is any trade at the price.
So set an option limit buy at 0.05 and sell at 0.10 would easily make a huge gain, but these orders are not going to be filled in the real market.
The developer used this technical to make false performance. His real performance is like 7% monthly.

2. Simplicity trading:
This is a martingale strategy.It makes profit by adding to losing positions and wait market to come back. So the risk of blowing up is quite high.

You apparently have better experience with C2.
One thing I don't understand is that if one can trade and make profit with great certainty, why bother to use C2 to get some lousy fees.

 

[speedo]

You apparently have better experience with C2.
One thing I don't understand is that if one can trade and make profit with great certainty, why bother to use C2 to get some lousy fees.

You apparently have better experience with C2.
One thing I don't understand is that if one can trade and make profit with great certainty, why bother to use C2 to get some lousy fees.

Why indeed.

 

[Pekelo]

One thing I don't understand is that if one can trade and make profit with great certainty, why bother to use C2 to get some lousy fees.

Why, you don't like more money? Let's say you have a flat month, or even worse you lose a little money in your trading for 2-3 consecutive months. But with sweet subscriber fees, you will be able to pay your bills.

Quite simple really.... Assuming there is no extra psychological stress on you because a bunch of people are mimicking your trades (a big if), and it also doesn't mess with your fills and slippage, there is really no reason why not to have an extra income in the form of C2 fees.

 

[bbpp]

You apparently have better experience with C2.
One thing I don't understand is that if one can trade and make profit with great certainty, why bother to use C2 to get some lousy fees.

I guess they have some degree of certainty, but not great certainty.
So they still need some extra money.
C2 is a place where you can make extra money at almost no risk.I mean if you lose there, you don't really lose money.
And you can practice and improve your skill there.
I do think if there is someone who does have a great certainty at trading, he will be able to make more than 100% monthly.

Here is my strategy at C2.
https://collective2.com/details/110945692

I just recently began to learn commodities trading. So I practice there as well as make some extra money.
Note I traded 7 days and made about 34%. And I use low leverage.
If I use higher leverage, I think 100% monthly is not too difficult.
But of course, to really convince anyone, performance of much longer time is needed.

 

[Mtrader]

Assuming there is no extra psychological stress on you because a bunch of people are mimicking your trades

When I read this the next question pops up again: can these systems be reversed engineered? Because everybody sees all the trades in detail.