Anyone who has been trading or investing for a while can testify just how hard it can be to find the right system or strategy to utilise in their trading ventures.
Most successful traders had to go through several trading systems to come up with the right one to suit their trading goals.
Collective2 is a trading platform that makes it easy to identify the right automated trading system to meet your needs. You can choose any system to execute trades automatically in your trading account with any of their affiliated automated trading brokers.
In trading, there’s usually no easy way to compare systems to see which one is better-performing than the other, but Collective2 has found a way to address this issue by letting you track the performance of over 18,000 trading systems on their platform!
What exactly is Collective2?
Collective2 is a social trading and investing site where you can automatically copy other traders or investors with your own account either by trading or ‘copy trading‘. The company, which was founded in 2012 by Matthew Klein, is headquartered in New York.
Collective2 is fully regulated by the Commodity Futures Trading Commission (CFTC) and is a member of National Futures Association (NFA). Collective2 currently has an impressive 93,000 registered users.
In this review of the infamous broker, we’ll break down all the features, pros and cons of being a member of this social trading platform.
How does Collective2 work?
Collective2 works in the following way:
- Identify the best trading system for you
- Assess the trading system
- Subscribe to that trading system
- Turn on ‘Auto-trade’ so the system can start trading for you
- Collect profits
Identify the best trading system for you
The simple interface on the Collective2 platform, allows you filter through trading systems based on different criteria. You can filter by trade instruments (forex, futures, stocks or options), trade frequency (the systems vary from long term to short term and also offer the ever popular swing trading), and even the fee for the trading strategy.
To help you find your best options from the thousands of available systems in a matter of minutes, Collective2 provides you with ‘The Grid’. It has an intuitive user interface that can help you narrow down your options by setting parameters like the number of trades the system has taken, or how old it is, or even the average duration of the trades and their profit factor.
Assess your chosen trading system
Now that you’ve decided which trading strategy to employ, it’s time to examine it in detail. You can either do this by zooming into the charts for a detailed view, or by checking the trading system’s monthly performance from the day it became active. You can also read other subscribers’ reviews of your chosen system.
After doing your homework, you should have a pretty good idea of how the system is likely to perform. This is great because most of the strategy information pages contain performance records of real money accounts that the strategy developer is trading on.
Subscribe to the trading system
After finding your ideal system, you can then subscribe to it. This is a simple process that only takes a minute to complete. Upon subscribing to the system, you will be charged a small monthly fee, then you can set your account to trade according to the system you have chosen.
It’s a super easy process that doesn’t require any technical knowledge. Some systems offer a one-week free trial before subscribing, but that is decided by the system developer. They also decide the price to charge each person who subscribes to their signals.
Turn on auto-trade
Now comes the fun part! There are lots of automated Forex brokers that are compatible with Collective2. After subscribing to a system, all you have to do is turn on the Auto-trading function in your account and set the trade limits to figures that are in line with your risk management plan and overall trading goals.
We suggest that you start with small trades. As you get to understand the nature of auto-trading, you can start increasing your trade size. You will be able to see new trades being placed automatically in your account after you’ve finished customizing your settings.
No, wait! We were wrong
This is the fun part! After everything is set up, and automatic trading has begun in your account, you can either sit back and watch the trades, or you can actively begin to manage your trades.
If you feel the need to intervene for whatever reason, you can do so at any given moment right from the user interface.
Even while auto-trading, you still have access to all the functions and you can stop a trade if you wish. You also have access to your account’s real-time profit and loss reports and the status of all your trades.
Collective2 Main Features
You can create a free account and become either a Trade Leader (producer of trading systems), a follower (subscriber to trade systems), or both.
Signing up is easy and can be done either by email or through Facebook, Google+, or Linkedin. The broker you choose will determine your account currency.
System producers must pay a bi-annual fee of $120, with an extra charge of $105 for adding an extra system within one month. Developers get a discount for developing and listing more than 10 strategies.
All subscriptions to any of the listed strategies attract a 30% fee (including credit card costs). The prices for subscribers vary from developer to developer. Most developers offer a free 7-day trial before you commit.
While Collective2 is compatible with a lot of brokers, it still isn’t compatible with all of them. This means that if you don’t hold a trading account with one of the compatible brokers, you might have to open a new one.
Collective2 supports more than 10 brokers but they don’t offer an integrated broker solution. All partnership brokers charge various commissions and spreads depending on what instrument you’re trading.
Cost of trading
It costs $99 per month to use Collective2’s auto-trading platform. This gives you access to unlimited strategies that you can follow. You can place any size trade, on any instrument, as often as you please – all at no extra charge.
Auto-trading is the cornerstone of copy trading at Collective2, and its benefits are vast. In addition to the savings in fees and the other advantages mentioned above, you can trade multiple systems at one time. You’re also able to monitor all your trades in real-time.
If you wish, you can close a position before it hits the stop loss or the take profit mark. You can even increase or decrease the size of your trade at any time. As an added advantage, all your data is saved at Collective2 via auto-sync.
Collective2 shows all the information about the developers on their profiles. This makes it easy for you to pick the leading strategies. The information shown includes starting capital, instruments, win ratio, maximum draw-down and so on.
There is also a very handy index on the profile page that measures the likelihood of a substantial draw-down after considering all the risk factors of a particular strategy.
Risk and money management
The risk management feature on Collective2 is disappointing, to say the least. Considering how far they’ve come with every other feature on their platform, one would expect more in this area. The only parameters you have to set when copying a trade are the ‘trade scaling percentage’ and the ‘stop loss parameter‘.
Trade scaling is a measure of how big you want your trade to be in comparison to the trade that you’re copying. If it’s set to 100%, then it means that you want the same trade size as the one you’re copying.
Becoming a leader
Collective2 is a great place for all successful traders to share their skill and knowledge by creating trading systems and selling signals to subscribers. After creating and listing your system, everything else is automatic. You just need to enter your ‘buy’ and ‘sell’ signals, and Collective2 does the rest to make the strategy auto-tradeable at all their supported brokers.
As a subscriber to any of the strategies available on Collective2, you have different options as to how you receive your signals to trade. You can either sign up for auto-trading, or you can get your signals via email, phone, or instant messenger.
There are also some management tools to help developers manage their subscribers easily. including a private forum for subscribers, private email broadcasts, and tools for pricing and even distributing special coupons for your subscribers.
As a social trading platform, Collective2 offers its community various tools for communicating and interacting with each other, like forums, integrating with Facebook and Twitter.
Followers can also write reviews on the trading systems, ensuring full transparency of feedback on all their strategies.
Collective2 has a very helpful customer service team, but their response time of up to 48 hours could use some improvement! For queries or complaints, customers can contact them either by phone or email.
On the plus side, they have a host of very useful video guides on their platform which provide a lot of the answers to the most frequently asked questions.
To pay listing or subscription fees, you can use any of the supported payment options at Collective2: Visa, Master Card, Discover and American Express.
Payments for system developers, on the other hand, are done through Paypal. Alternatively, for those without a Paypal account (or if it doesn’t operate in their country) cheques will be mailed to them at the cost of $10 per cheque.
Collective2 pros and cons
- Great for traders who know what to look for in a system.
- Research tools to assess trading strategies.
- Transparent trading, you can check the history of trades for any system.
- Simple to set up a multi-broker auto-trade system.
- Interact with any trading system’s past subscribers to check their experience with any system.
- Easy to subscribe and unsubscribe to all systems
- Systems available for multiple instruments including stocks, futures, options and of course, Forex.
- Some users feel platform looks out for system developers more than it does the subscribers
- No real demo account
- Complex system of commissions
- Poor risk or money management features
- No solution for own broker
- Not compatible with all brokers
- Limited stock trading for traders outside America
Although Collective2 has suffered a lot of criticism in the past, many of the negative reviews that still linger online are no longer valid, especially when you look at what the platform has become today.
Over the years the company has consistently improved on every aspect of their platform. Unlike a lot of other social investment sites that have popped up only to quickly disappear like a thief in the night, Collective2 has proven to be a scam-free network, and it recently celebrated its 16th anniversary.
Whether you are a new or experienced trader, Collective2 offers all traders and investors a wealth of trading opportunities through their revolutionary auto-trade technology.
We’ve outlined the benefits and the drawbacks in this Collective2 review. Now it’s up to you to decide if auto-trading could be just the tool you need to help you achieve your trading goals.