Collective2 Review

 

Collective2 serves as an innovative trading platform, allowing users to link their brokerage accounts and select various trading strategies to replicate in their own accounts. This automated trading service consistently assesses and ranks new strategies, making it an appealing option for traders. Positioned as an “anti-hedge fund,” Collective2 stands out by requiring a lower initial investment, charging flat monthly fees, and ensuring that your funds remain in your own account rather than being transferred to a hedge fund manager.

The founder of Collective2 even claims that hedge funds took money from his father, which inspired the creation of this platform. Their goal is to overhaul the hedge-fund industry with their software solution. Let’s delve into how this platform functions.

How Collective2 OperatesThe concept behind Collective2 is straightforward. You select the trading strategies you’d like to emulate, and they sync with your brokerage account. Here’s how it works:

1. Pick a strategy on Collective2.
2. Link your brokerage account.
3. Monitor trades as they occur.

Unique Features of Collective2If you’re keen on investing in hedge funds but prefer not to freeze substantial amounts of capital or navigate the complex politics often associated with these funds, the Collective2 platform allows you to trade hedge-fund strategies directly from your brokerage account, tailored to your investment comfort levels, with your money safely remaining in your account.

Available StrategiesCollective2 provides a variety of trading strategies. They continuously review and incorporate new strategies that meet specific criteria. As of now, they have evaluated over 51,000 investing strategies, with more than $50 million invested in their platform, boasting over 100,000 registered users at the time of this review.

Diverse Strategy OptionsStrategies on Collective2 cater to different trading preferences, encompassing various risk levels, trading styles, and instruments. You can filter and select strategies based on the statistics that are most relevant to you. There’s no cap on the number of strategies you can copy. Each strategy showcases its performance over its operational period, but it’s crucial to remember that past performance does not guarantee future results. Trading inherently involves risk, and losses are possible. While many strategies on Collective2 have performed well, there are also numerous that have not succeeded.

Managing Strategies on Collective2The platform facilitates asset management through a standard brokerage account or your preferred trading software. If you have a strategy you wish to share and manage, you can propose it to Collective2, and you can be operational in mere minutes, not months. Your customers manage their trades in self-directed brokerage accounts, pay flat fees, and retain control over their funds, minimizing regulatory hurdles for you to get started.

As a strategy manager, you receive a flat fee for each subscriber who replicates your trades, without performance fees or complex structures. You can set your subscription prices, typically between $49 and $199 monthly, and most strategies offer free trial periods.

Details for Strategy ManagersOnce you start acquiring subscribers, Collective2 handles all transaction processing. They compensate Trade Leaders (strategy managers) with 50% of the subscription fees collected. Benefits for strategy managers include:

• Auto trading for subscribers
• Signal broadcasting via email, Instant Messenger, or mobile
• A private forum for subscribers

When launching a strategy on Collective2, you must choose a starting “Model Account” size, factoring in margin needs, position sizing, and potential drawdown. Strategies requiring over $50,000 may attract less interest compared to those manageable with smaller capital.

Opportunities for New ManagersCollective2 offers a pathway into asset management for individuals who might not otherwise have the opportunity. Breaking into this industry has always been tough, but aspiring managers can establish a verifiable track record through the Collective2 platform and earn income in the process. This track record can later serve as a powerful tool to attract potential investors.

To manage assets on Collective2, you create a Model Account that your investors will follow. You can manage this account in various ways:

• Execute buy and sell trades using the WebTrader, just like any broker.
• Connect your preferred trading platform (like MetaTrader or TradeStation) via the Collective2 Transmit technology.
• Utilize the RESTful API for custom coding.
• Manage your Model Account through email.

You can also link your brokerage account using BrokerTransmit technology, ensuring that all trades in your brokerage account are mirrored in your Collective2 Model Account, which bolsters confidence in potential subscribers by showing that you have real money at stake.

Protecting Strategy Developers’ IPYour intellectual property regarding trading strategies is safeguarded on Collective2, as it remains with you and is not disclosed. You simply execute trades while they share the outcomes.

Collective2 Pricing StructureAnyone can explore being a Strategy Manager on Collective2 with a 14-day free trial that doesn’t require credit card information. You can cancel, upgrade, or modify your plan anytime. Their offerings cater to various levels of Trade Leaders and Investors, with plans priced as follows:

• Starter Plan: $19/month – Includes a published strategy, auto trading, subscriber management tools, and the ability to manage one strategy.
• Basic Plan: $39/month or $390/year (15% savings) – Offers additional tools and the ability to manage one strategy with a higher starting portfolio size.
• Premium Plan: $99/month or $990/year (15% savings) – Includes all features of the Basic Plan and allows management of three strategies.

Supported Brokers and PlatformsCollective2 technology is compatible with various brokerage firms. Remember, the choice of broker may depend on the type of strategy you wish to pursue. For instance, forex strategies require brokers that permit forex trading. Some of the available brokers include Interactive Brokers, Gain Capital, Tradovate, and Oanda.

The Distinction Between Collective2 and Hedge FundsCollective2 positions itself as the opposite of traditional hedge funds. You can manage your own account with traders implementing their strategies. The minimum investment for Collective2 can be as low as $5,000 for small strategies, generally ranging from $20,000 to $100,000, whereas hedge funds often demand millions.

Moreover, Collective2 charges a flat monthly fee, while hedge funds typically take a percentage of profits. Importantly, with Collective2, your funds remain in your account, unlike hedge funds where you entrust your money to a manager.

Final Thoughts on Collective2Having been established in 2001 and based in the U.S., Collective2 is registered with the CFTC and a member of the NFA. They acknowledge that outcomes can be highly variable, with the risk of loss being real, but also the potential for significant gains, as is the case with any automated trading system.

Collective2 boasts a user-friendly interface and an assortment of strategies to choose from. They also welcome new strategies from individuals seeking a platform to share their ideas with a larger audience.

I believe there are many skilled traders who remain under the radar, possibly due to introversion or operating from less prominent locations. These traders may have dedicated countless hours refining their strategies based on meticulous market analysis. Platforms like Collective2 provide them a venue to showcase their unique strategies compared to hedge fund managers who may simply follow conventional methods.

In conclusion, several strategies on Collective2 merit closer examination, especially for those who lack the time or expertise to develop their trading strategies. However, concerns about the effectiveness of scalping strategies on Collective2 due to potential price discrepancies should not be overlooked.

You don’t need a live brokerage account to manage a strategy on Collective2, but having one can enhance credibility. Using BrokerTransmit technology allows you to execute your strategy seamlessly by trading in your brokerage account as usual.

I hope this review of Collective2 has equipped you with the necessary insights to determine whether you want to explore it as an investor or strategy manager. You can find additional information through their blog, podcast, and tutorial videos.

Just remember to keep an eye out for the quirky dancing robot on the Collective2 website!

All results are hypothetical. Trading entails risks, and losses are possible. Collective2 might not suit everyone. If you cannot afford to lose money, it may not be the right fit for you. Please refer to the important warnings and disclosures on the Collective2 website.

From $19 Features: 7.7 Usability: 8.0/10 Results: 7.0/10

Pros:

• Autotrading strategies
• Strategy managers
• Multiple trading platforms
• Various trading instruments
• Any broker
• Subscriber management tools
• Easy to use
• Free trial

Cons:

• No guarantee of results
• Requires user input
• Quite complex to set up
• Overwhelming choices

As a self-proclaimed forex geek, I spend my days researching and testing everything related to forex. With years of experience in the forex industry, having assessed thousands of forex robots, brokers, strategies, and courses, I share my insights to help you navigate the exciting world of forex trading!