Collective2 review - not a real scam

First, the good news:

Performance of Project Athena is 17% in 2 months! But if we would weight in the fees, the real performance is between 9% and 15%, depending on your broker and how much you trade.

Started	$10,000
Buy Power	$11,738
Cash	$11,738
Equity	$0
Cumulative $	$1,738
Total System Equity	$11,738
Margined	$0
Open P/L	$0

And some more technical stats:

Trades	131
# Profitable	67 (51.1%)
Avg trade duration	7.9 hours
Annual return (compounded)	133.5%
Average win	$84
Average loss	$60
Profit factor	1.4:1
Max peak-to-valley drawdown (historical)	5.39%
drawdown period	July 18, 2011 to July 28, 2011
Correlation w/ S&P	-0.211

The bad news are that I have managed to piss off C2 owner with my 'constructive feedback' on C2 forum.

I will list here my last threads with him, I will paste only my mails but I will just present succinctly his replies, I have a feeling he will take it personal if I paste them here.

Here we go:

C2

C2 asked me to stop posting on and/or using C2, and they are happy to issue you a full refund for my system. Followed by 'Your continued desire to torment me borders on the personal and vindictive.'

 Me

Hi Matthew,

It is not my desire to torment you, I am sorry if that what you think.

I listed some issues (some facts and some personal opinions based on the facts), you might not like them, not that I expected that.

For example is it true or not that there is no way to evaluate the platform without having to pay for it? True/False? AFAIK this fact is true. And my opinion is that the implication is this: system developers will do less testing, and subscribers will end up paying for this.

You can disagree with my opinions and you can change the facts! It is up to you!

I payed for 6 months, if you plan to give back the money, just add a "money back guaranteed" for all developers and I might exercise this feature. If you feel my posts are disrespectful (which I do not try, I just try to express facts, and my opinion based on the implications of those facts) then feel free to ban my account.

Fell free to respond on forum and show what facts I am misunderstanding, or why my logic is broken in the mater of opinions. 

C2

Something in the lines of "Just stop, I have no interest to debate with you. "

Me

Well, then please change the EULA (e.g. you are not allowed to post negative opinions or critics on the forum ...) and I will stop.

Or ban my account if you find that my comments do meet the bar for banning an account, or delete them.

I don't ask for special privileges and I like the freedom of expression, as long as I don't insult and I try to state facts and use my (poor) reasoning and opinions based on my experience in software engineering.

I call my comments ... constructive feedback.

C2

I lengthily email, basically "Leave me and my site alone". Also he said I am causing him pain with my comments, and he does not not care the reasons for which I harass and torture him, like constructive criticism, stating facts, protecting customers, and many more. Also he send me full refund and asked me to not use the site or use it in silence. He also said that he made some business tradeoffs and while maybe not the best ones, I should not complain and go somewhere else if I want.

While now it is clear C2 is not a scam, it is clear that (like many other business) it does not have it's customers interest at heart. But at least other companies try to mask it better. How much does C2 care about both subscribers and system developers can be seen from C2 forum.

C2 owner:

I always tell system developers who get upset when people unsubscribe from their free trial period, "Relax. You're not running online jewelry store http://bluenile.com. You're not selling diamonds through the mail." Your marginal cost of offering a free trial is... well, it's zero. Okay... perhaps your point is right, that it costs some of your time to answer questions from your free-trial customers. Fine. Then the marginal cost of providing a free trial is not quite zero. But it's darn close. 

My private reply:

I am stupefied about the attitude! ""Relax. You're not running online jewelry store http://bluenile.com." is not the kind of thing I want to hear from a business owner. I want to hear how the product will improve, or at least to be presented with viable workarounds. It is not about providing a free system or not, it is about listening BOTH sides and provide a fair product.

I have not seen any response about my requests, nor agree, nor disagree, nor a "we are put this in our feature request list" ...

 And some of my replies to forum posts have started to disappear, like this one in response to someone losing $200 because of a C2 issue:

And it will get ugly one day! 

C2 lacks big time in the quality assurance sector. 

1) the testing systems are only for developers and are invisible to subscribers. It should be the case that a developer could build a testing system, and (optionally) let subscribers use it to simulate and test paper trades. 

2) system developers have to PAY to have a testing system, so it is understandable why most developers are not aware of the issues, because they need to pay extra just to evaluate the platform. 

3) I have seen over and over small issues like this! 

4) C2 does not maintain a public list of "known issues". I worked for many years in software quality assurance, and believe me, EVERY software has its list of known issues which will probably never get fixed because it is not economically feasible. And if C2 can make money for 8 years with a host of internal known issues, they will, like any other company. C2 should disclose them and their workarounds, YOU can lose a fortune! 

5) Ultimately, C2 will make money just because system developers will pay the monthly fee, and C2 will resist with current quality for a long time, but will you, the subscriber, resist? 

Take time to read the forums. I have listed many other opinions. Both system developers and subscribers have to be very careful while using this site. It runs $400 millions weekly, and the possibility for large screw-ups are endless!

My assessment of C2 platform

Not a scam, but based on C2 posts it seems C2 is in Maintenance mode with little or no code development. I am wondering if there is any active development team. Read - don't expect much bug fixing, nor expect improvements. Whenever there is an issue they seem to fix it in the database, but the underlying issue/bug seems to remain there happy to hit someone else. So scan the forums, and whatever issues you see, keep in mind they might bite you too!

Second, C2 owners did not seem to disagree much with my assessment, but this is the way site works and they don't plan to change that. It is their business model, and they know well that the improvements asked by many users would be good for both system developers and subscribers, but it will hurt their bottom line. For example a highly asked feature is to evaluate the platform at no cost, this would make both system developers and subscribers be aware of any issues and limitations before they do put any real money. But at a close examination you will see that predicting stock market is one of the hardest thing out there. Most of the traders actually lose money. Most of the C2 systems are actually very poor. So after 3 months of free evaluation, most system developers will quit and the remaining ones will start with many lessons learned, but this would mean at least 2 - 3 times less subscription fees from system developers.

It does not mean that you should stop using C2. If trading is a hobby (like mine) or if you want to get serious about it, then just putting some money into it would be the best thing.

But if you do not have the meanings or you live in a third world country with huge trading fees, then C2 might be just perfect for you.

If you are a system developer:

• Don't jump in too soon, make sure your strategy does work. Back test it well. For example before posting results on C2, I posted results on twitter for 1-2 months. Only after that experiment was successful I joined C2.
• Don't screw your subscribers, make sure the strategy scales for the number of subscribers you have. C2 treads a system as infinitely scale-able, which we know it is not true! Don't use securities with large spreads or low liquidity!

If you are a subscriber:

• C2 is not a scam, but individual system developers could be scamming you. And C2 acts as a legit umbrella for them and it does enables them though complex rules (some business trade offs, some governmental rules) - read the forum to understand what are those corner cases where you could lose money but C2 lists it as a winner. 
• Also another way C2 acts as an umbrella, although not obvious and not too often is though their slow infrastructure. For example my system does trades at open of market and at close of market. But C2 used to have a 2-15 minute lag at market open, so my trade would be executed later than what I asked. If the trade was much worst than what I wanted, I would fill a request to fix it. If the trade is actually better than what the developer wanted, do you think they will request a fix from C2? One day when I asked C2 to fix a trade which seemed for them that would actually decrease my performance, they asked me if I really want that!
• Another way system developers can scam you is by creating (under multiple accounts) many strategies in the hope that one would just work. A sure way to do this is to have 2 strategies in the mirror (e.g. one bets IBM would go down in the next month, one would bet it would go up). One of them would be a winner, one not. It does not even have to be the same stock, they could use pairs of highly (anti-) correlated securities for that! To protect against scams:
• Do make sure the systems you use do have about 2-3+ months at minimum
• Look for high sharpe systems (it means it makes constant profit, and it does not have it's profit from a few trades)
• Stay away of systems who have most of their profit from 2-3 trades.
• Watch out for market trend, if the market was booming, any long systems should do money.
• Protect yourself based on your risk profile (use limit orders and/or buy cheap options to protect against major loses)
• Don't screw yourself! If you want to trade 10x a system, make sure you check first with the system developer! It might not scale that much.

C2 can successfully be used, but both system developers and subscribers have to be alert! C2 acts as a place to meet, and guaranties that one's strategy maybe could work. Nothing more! It is up to you to make sure you don't screw each other.

C2 feeds on system developers aspirations and subscribers greed, all  under "government regulations" umbrella while not building features that would truly make light into system quality and scale-ability nor subscriber quality, because they know it will hurt their bottom line!