Options

The last week was not great. Up until Wednesday (7/20) we were having minor positive gains (1%).

But for Thursday(7/21) the prediction were looking weird. For IT and Consumer sectors, predictions looked regular. But for Finance sector they were extremely negative. Out of 48 stocks in finance, the computer recommended 38 shorts, and top 14 recommendations were strong shorts. This is in the context in which normally it recommends about 20 shorts normally. The only time in recent history when the program had similar negative predictions was for 6/1 when the market fall 2%.

First we started to read the news to see what is happening, and we learned that in the next day or so, Europe was set to save Greece from default, or maybe not. And we learned also that the most exposed sector is Finance. That was great news for us, it meant the computer is not that stupid after all.

So I bought options (puts) too. Lots of them. Fortunately for humankind - but unfortunately for my bank account - Europe did produced a plan that delighted the investors (at least for now).

My options are still active, and there is still hope for some return on investment, because the predictions for tomorrow (7/26) look gloomy again (38 shorts out of 48, the only quality long signal in Financial sector is MCO at rank 5, the rest of top 15 predictions are shorts).

Probably the computer senses that if Obama and GOP do not come up with some good debt plan, markets will penalize them heavily tomorrow (based on signal between 3 and 5%). But there could be a nice bump if Government comes up with a nice plan tomorrow. So I will buy a few calls too, (but not much), since I have invested plenty in puts.

On C2 we are now at +8.5%, from our high of +11%

In machine we trust

Machine is smarted than us. PERIOD.

The end of the last week was bumpy. And it was not because of the economy nor news. Somehow the machine predicted a certain pattern for a given stock that we were not seeing, and it was supposed to be a very strong signal. But for some reason what the machine predicted didn't happen. The stock was supposed to fall, but it stayed flat for 2 days. The economic news should have shaken the stock. But nothing happen.
The real losses stated to add up and after 2 days I could not bear the pressure and I swapped manually that stock with some another ones, predicted to fall also. A few minutes after I closed the position, a massive sell off followed. We lost because of that a lot, but the other predictions were not that bad either, and we broke now 10%+ on C2, making $1,098 in less than a month.

When you trade with your own money, that is a totally new game! But we have no excuse, we backtested the machine and we should trust it. So lesson learned: "In machine we trust" from now on!

Started	$10,000
Buy Power	$11,098
Cash	$1
Equity	$1
Cumulative $	$1,098
Total System Equity	$11,098
Margined	$1
Open P/L	$0

Side effects of no subscribers on C2

We started to trade with real money a week ago. Our profit margin is really small and it is easy to be eaten by bid-ask spread. Since any C2 subscriber can trade as much as s/he wants without any regard for one's actual long term profit, and because they could share the signals with friends, we removed all subscribers. We will sell our strategy (if ever) to only one subscriber, that is the only way we can ensure long term success.

And we found what is the most important thing for a great C2 score: as soon as we removed subscribers, our score went form 900's to 300's. So C2's score can be manipulated in this way: get a 'friend' to subscribe, with a very low price ($5/quarter), and 90 free days (your credit card won't be charged for 90days) and see how your score jumps.

0 subscribers has other side effects on your system, C2 does not execute your trades in time, we started to see again huge delays in execution, and we lost time pinging C2 to fix them (we don't even bother pinging them for delays longer than 5 minutes anyway). C2 is not suitable for daytrading, at least when you don't have subscribers because even 1 minute delays can make a huge difference.

We witnesses differences of $20 per day between real daytrading on IB, and what C2's reports. And I mean IB is actual better than what C2 reports. Our sample is small, but consistent every day.

The last side effect of not having subscribers, is that C2 is slow even for updating the system description, which is still pending for more than a week.

Lack of mobile app is another issue, it is a pain to update manually C2 on your phone, so a couple of times we have not updated C2 signals in time, and while we did had good results on IB, C2's signals were not updated in time and we lost in stats.