Chart as of interview
on July 8, 2011
Topaz NQ100 M
Avg. Trade Duration:
Topaz NQ100 M is a long only system that trades the highly liquid components of the NASDAQ 100 index. It is designed for manual trading.
Topaz is the best stock strategy I've found on C2....
It is flexible and profitable, both short term and long. Autotrading it is easy and there has been a steady upward equity climb since I joined
(although it had to weather the tsunami as did a lot of other systems.) Sometimes the mandatory 10 day selloff can be a frustrating if a position
is in the red, but the overall equity curve still steadily rises. The beauty of this once a day system is that if you want to manually manipulate any of
the positions, it is easy to do so, even with autotrading enabled. Developer's website and comprehensive FAQs are excellent.
- from C2 Autotrader
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Interview with Trading System
Developer Dr. René Koch
interview conducted on July 8, 2011 by David Sinton
DS: Hello, Dr. Koch. Please tell us the story behind Topaz. How did you develop it?
Dr. Koch: I started trading-system development in 2001 with Wealth-Lab. They had a great user community at the time.
By 2006, I had a much more clear idea about the components I wanted to use for a stock trading system. I am physicist, with a strong background in
math and science. I used those skills when backtesting and developing the Topaz system.
DS: How did you find C2?
Dr. Koch: Actually, I dreamt up a very similar business plan a long time ago: Sending my signals to a server which then publishes
them to a group of users. When I discovered C2,
I was very excited. I immediately started to learn and implement the C2 Application Programming Interfaces (APIs). Using the API, you can automate Collective2. That was a very important goal for me; I wanted to fully automate my system, and Collective2 allowed that.
DS: What do you like about C2?
DS: Okay, so you've told us what you like about C2. Now, the other side, please. What are some of the challenges of using C2 as your platform?
Dr. Koch: First, it gives me a lot of freedom in terms of what I can do in my trading system.
It also does all the boring work: marketing, finding new customers, accounting, and so forth.
I love to discuss my system with my subscribers once I have them, but I hate to seem like I'm "convincing" people to trade it. Collective2 does a really good job of bringing
subscribers to me. This way, I can focus on building my trading system.
Dr. Koch: Well, look, I started with C2 back in 2007 -- more than five years ago. To be honest, it was more a hack than a professional platform capable of moving huge amounts of money each day. Fortunately this has completely changed. So much has improved in the past five years.
Even so, there are still things I miss. For example, I miss some advanced order types (LOO, LOC), which would allow me to dream up new
systems. But, when all is said and done, I am glad that I had to live without these tricks - it
makes the life of subscribers easier.
DS: What are some other problems with C2?
Dr. Koch: One problem is the vast number of systems available on C2. A customer can choose
from thousands of them, there are always some "one-night-wonders" and
"shooting stars" which distract newcomers. This makes it hard to "stand out"
as a serious system developer. Usually "real results" are not spectacular
enough to find their place in one of C2's Top-10 Lists.
I keep telling people that long-term results are the important ones. It's true that these results tend to appear more "boring" than short-term results. But boring can sometimes be a good thing.
DS: Have you made money on C2? What sorts of numbers
(subscribers, revenues) would you feel comfortable revealing?
Dr. Koch: It was hard in the beginning. I had my first paying
subscriber after three month. But the earliest subscribers came and went,
fluctuating in the one, two, or three range.
Things started to take off in late 2010. Today we fluctuate around 90 subscribers, depending on market conditions and
recent profits. So, yes, I am quite happy with the subscriber success during
the last few months, especially if you take into account that the strategy
is unchanged since 2006. My colleague and I spend about 20 minutes every day
to make sure that our machinery (our fully automated order generation
machine) works ok, and that's about it. So today Collective2 is a nice income for a
small amount of daily work.
Of course we work on new systems, but this is a different story...
Topaz has good subscriber numbers, but still has room to grow. The best systems on C2 can have over 300 simultaneous subscribers. Last year, the highest grossing system developer on C2 generated over $425,000 dollars of subscription revenue in one year.
DS: What advice would you give to a system developer who is new to C2?
Dr. Koch: First: Make sure that your system really works! Do many meaningful
backtests, with good amounts of In-Sample and Out-Of-Sample data. (If these
words don't mean something to you, you're probably not ready to make a commercial trading system.) Of course, this advice excludes "discretionary" traders, where backtesting is less meaningful.
Second: See if you can automate your daily routine as much as possible. Try
to arrive at a point where you don't even think about a set of orders. Just
send them to C2.
Third: Patience, Persistence
Fourth: Be nice to all customers. Answer all questions. Answer the stupid
questions also. Answer even the stupid questions you have answered dozens of
times before and which are verbosely explained in your system description,
your web site, your FAQ. Just answer them. It will take you about an hour
Fifth: Patience, Persistence.
DS: Any other thoughts that you want to share about mechanical trading systems?
Dr. Koch: A lot of traders emphasize "Discipline". I am not very disciplined in
general. I get especially nervous when financial news and market crashes scare me. That is
why a fully automated, systematic trading system is important.
I let the computer be the disciplined one. That allows me to have fun in
my own life.
These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.
In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program, which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.