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maguiredan

What's Your Experience with 'renting' Strategies

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For the past 4 months I have been monitoring several trading strategies available for rent on the Collective2 site. Recently I have subscribed to a four of them. Mostly I have taken the signals and traded them manually. One especially promising futures strategy I have put on 'auto-trade'. My trading results thus far are slightly positive.

 

Is it a viable approach to trade strategies available online? What sites other than C2 have people used and had good trading results?

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I have a few programs from the site Live Trading Zone | Live Futures and Commodity Trading and they work really really well. I wanted to do a trial at first, so I did just one month rent. Then after the first month I just paid for it outright. I know a lot of people who just pay monthly but to me it is like renting a car lol. I would rather pay for it up front and get it cheaper than to rent each month.

 

Although the advantage to renting is that you can just stop whenever it stops making money.

 

My experience has been the guys who trade their own programs actually do perform the best in real life. They aren't cheap there, but they work. So as long as I make money, I don't mind :)

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If their trade history for 2011 is accurate, some of those strategies look pretty good. But I have a feeling those are really 'signals' rather than actual trades It would be better if they posted some 'real' trading history the way Collective2 does. That lets you factor in slippage and commissions.

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Hi Chippy,

I have just found this website Live Trading Zone | Live Futures and Commodity Trading, it seems very interesting. Now checking their reputation on the web.

 

Are you still satisfied?

 

Philippe.

 

 

Yea things are going pretty good. Right now the markets are all having a hard time, but I am still positive for the month, so can't really complain. They are pretty good about being around when you need them. I have been to some sites where if things go wrong they never show up...at least they are there when its losing too haha :crap:

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If their trade history for 2011 is accurate, some of those strategies look pretty good. But I have a feeling those are really 'signals' rather than actual trades It would be better if they posted some 'real' trading history the way Collective2 does. That lets you factor in slippage and commissions.

 

yea I asked them about that at first too because I know slippage can be big on certain markets, but so far it hasn't been off too much. It seems to average out because I get better fills sometimes and then worse sometimes.

 

I know on the trade records for the day trades they include slippage, but not on automated. Either way, as long as I make 10% on my money after all fees and commission I am not going to complain :cool:

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Yea things are going pretty good. Right now the markets are all having a hard time, but I am still positive for the month, so can't really complain. They are pretty good about being around when you need them. I have been to some sites where if things go wrong they never show up...at least they are there when its losing too haha :crap:

 

Thank you for your answer. May I ask which of their program(s) you are following?

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For the past 4 months I have been monitoring several trading strategies available for rent on the Collective2 site. Recently I have subscribed to a four of them. Mostly I have taken the signals and traded them manually. One especially promising futures strategy I have put on 'auto-trade'. My trading results thus far are slightly positive.

 

Is it a viable approach to trade strategies available online? What sites other than C2 have people used and had good trading results?

 

 

Specifically, which ones are (have) you monitoring/renting.

Thanks.:confused:

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Unless you know EXACTLY what the trading logic is of an algo, the compliance rate is quite low. Black box systems are hard to stick to as you have no idea whether the system is broken when a drawdown begins.

 

Additionally, if there are inputs that a user can change, without a deep knowledge of the compnents of the trading logic, optimisation only results in curve fitting.

 

That old saying of teaching a man to fish rather than giving him a fish comes to mind.

 

It is much better to create your own algo based upon sound trading principles rather than renting a black box.

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Unless you know EXACTLY what the trading logic is of an algo, the compliance rate is quite low. Black box systems are hard to stick to as you have no idea whether the system is broken when a drawdown begins.

 

Additionally, if there are inputs that a user can change, without a deep knowledge of the compnents of the trading logic, optimisation only results in curve fitting.

 

That old saying of teaching a man to fish rather than giving him a fish comes to mind.

 

It is much better to create your own algo based upon sound trading principles rather than renting a black box.

 

BRAVO - Very well said :crap:

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Specifically, which ones are (have) you monitoring/renting.

Thanks.:confused:

 

I've been following 5 strategies: ES Oscillation, Futures Trader Daily, Quantum Fader, S&P ETF Timer and Stock Swing Trader.

 

You can see my comments about each of them in the My Analyst pages of Collective2

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Unless you know EXACTLY what the trading logic is of an algo, the compliance rate is quite low.

 

If, by "compliance" you mean the user following the signals generated by the strategy, that is a personal choice. What lowers compliance is poor results, not knowing the "exact" trading logic, which you can never do with a black box system.

 

Black box systems are hard to stick to as you have no idea whether the system is broken when a drawdown begins.

 

I agree they are hard to stick to when they perform poorly, but so are strategies you develop yourself. Knowing when a system is broken is always difficult - even for strategies you created youself.

 

Additionally, if there are inputs that a user can change, without a deep knowledge of the compnents of the trading logic, optimisation only results in curve fitting.

 

Agreed. Changing inputs without knowing the system logic can lead to lots of problems, including curve fitting, reduced upside, missed entries etc. I've seen no black box systems that enable you to change inputs. The user mainly has control over whether to put the position on, what size position to take and placement of stop loss orders.

 

That old saying of teaching a man to fish rather than giving him a fish comes to mind.

 

Absolutely agree. But, sometimes when the fishing is poor, it's good to know where the fish market it!

 

It is much better to create your own algo based upon sound trading principles rather than renting a black box.

 

Yes, if you can create a successful trading algo yourself, that's the best. But those of us who've tried, know how difficult that can be and how quickly your algo can go off the tracks. As a trader, I want to have both my own and other people's algos in my weapons chest.

 

My primary objective is to take profits out of the market. I will use any tool available to do that and I've found that rental strategies are a good - but not the only - tool to have.

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Chippy,

Can you give some insight on what your experience has been using these auto trading systems?

 

For someone wanting to start on that path, what have you learned and what would you recommend (e.g. dedicated computer, things that may cause the system to fail, etc...)?

 

Would you also expand on the overall behavior and performance of those specific instruments (BP, Gold, and Silver)? Nothing specific to your P&L, but again, I''m mostly interested on 'lessons learned' (e.g. how much draw down before I should start to get concerned, recommended account funding, etc.)

 

Many thanks!

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Chippy,

Can you give some insight on what your experience has been using these auto trading systems?

 

For someone wanting to start on that path, what have you learned and what would you recommend (e.g. dedicated computer, things that may cause the system to fail, etc...)?

 

Would you also expand on the overall behavior and performance of those specific instruments (BP, Gold, and Silver)? Nothing specific to your P&L, but again, I''m mostly interested on 'lessons learned' (e.g. how much draw down before I should start to get concerned, recommended account funding, etc.)

 

Many thanks!

 

Some of the small details you may have to ask them to confirm, but I can tell you what I know just from my trading.

 

I lost $600 on 1 trade in my first week because my internet went out. After that happened I decided to rent a server each month and not worry about any disconnection or my computer freezing :crap:

 

The Silver has been really crazy. I started during a good period and didn't have much drawdown, but then in May I had about a 10% drawdown. I think for silver you need a really big account now. I am not sure on the requirements, you will have to ask them. Overall silver has been the biggest money maker, but it will make you a nervous wreck to watch it.

 

Gold has been the most steady and not much drawdown, and BP has just been back and forth, but small profits there.

 

Biggest "lessons" I have learned is get a server or make sure your internet/computer never fails :rofl:

 

You can private message me for the amount I started with. I don't like to post that all over the internet haha

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I heard that some of the people who rent strategies have developed them using artificial intelligence software for automated trading system design like trading system lab and price action lab. The second one searches only for patterns and the resulting strategies don't have any optimizable parameters. I tried it and it looks promising. If you take the output of price action lab for example and you use it as an input to a genetic programming algorithm the result can be a well behaving and robust system, I haven't done this but this is my next step. Then you can go out and rent all those systems, recover the cost of the software and make a lot of money without trading while those programs work to generate more systems. Here are some links:

 

http://www.tradingsystemlab.com/default.aspx

 

The Most Advanced Tool for Analyzing Price Action and Discovering Trading Systems

 

If you can afford the first one that would be good although I'm not sure how they deal with curve-fitting, they say they do. The second one is more affordable but restricted to price patterns.

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Thanks for the reference to those two interesting systems, Gianno. I checked the first one and they want $50K for a three year license and there is no trial period or even a demo. Tough to make that purchase decision! :2c:

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I think the first one may be overpriced for what it does. It is also based on a cheap commercially available GP engine. I too have questions about curve-fitting and data snooping in this case. I think the second one is a much better choice for beginners in the area of trading system machine generation. It may also turn out to be more robust because it uses no indicators. They also provide a demo version although they require a small payment for verification. It seems they charge $2,795 for a year use but I would ask then to double that period or offer some discount.

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I think the first one may be overpriced for what it does. It is also based on a cheap commercially available GP engine. I too have questions about curve-fitting and data snooping in this case. I think the second one is a much better choice for beginners in the area of trading system machine generation. It may also turn out to be more robust because it uses no indicators. They also provide a demo version although they require a small payment for verification. It seems they charge $2,795 for a year use but I would ask then to double that period or offer some discount.

 

The one thing I like with my programs over others....and frankly one reason I chose it, is because they offered a performance type payment. If it doesn't make money, you don't pay them. I don't see many other programs that offer that. If so someone let me know. I am always open to ideas and making money :rofl:

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Forgot to comment on performance.

The BP performance is here

http://www.livetradingzone.com/records/British%20Pound.htm

I can vouch for those results. It enters on limit orders and profit targets, but exits on stop markets, so sometimes there can be a tick or two of slippage...but otherwise those numbers are what you can expect. Commissions are not included in those reports....so that will depend on your brokerage.

 

Here is the Gold.

http://www.livetradingzone.com/records/Gold%20Swing.htm

Those results are accurate as well. Due to the recent extreme volatility of Gold recently the head trader recommended pausing the program.

 

They are very good about keeping in touch about the systems and helping you stay out of trouble when the markets go a bit crazy as they have been the last week or two.

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Thank you. Those strategies look worth trying.

 

In return, I can mention that I've been trading a strategy called Futures Trader Daily on Collective2. I can confirm that the stats mentioned for that algorithm on the C2 site are accurate. It is pretty good.

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