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Collective2 Review – A Social Trading Platform For Traders

By Dave

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Collective2 Review

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Collective2 Review

  • Commissions and Fees
  • Trustworthiness
  • Value
  • Customer Service
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Summary

Collective2 is a unique social trading platform. Collective2 offers to its users a way to match up traders and followers as well as many other interesting tools. Read our in-depth review to learn all about Collective2 and decide if they are right for you.

About Collective2

Collective2 is a social trading platform that matches up traders (Strategy Manager) and followers (Investors) with tracking and auto-trading services through a subscription service model. The platform enables investors to monitor and subscribe to independent trading strategies as well as auto-trade (copy trade) them for a monthly fee. Traders operate their own strategies and collect monthly payouts based on their active subscribers. Collective2 seeks to discover the best trading talent and make their trades accessible to willing investors and subscribers. While the site states “Start a hedge fund without starting a hedge fund.”, I find that’s a bit of a stretch. There is no resemblance to the hedge fund model, as there are no direct (accredited) investors, performance fees, regulatory filings, or compliance. However, traders can arguably develop a verifiable track record through the Collective2 platform.

Collective2 Pricing Options

Collective2 (C2) has various fee plans depending on whether you sign up as a Strategy Manager/Trade Leader or Investor or both. Trade leaders have a 14-day free trial, and Investors can create a free account to explore strategies.

Strategy Managers, also referred to as Trade Leaders, pay a $19 to $39 monthly fee to list a single strategy or $99 to list up to 3 strategies. There is an additional $105 fee for each additional strategy added within a month. There are bulk volume discounts available for traders who list 10 or more strategies. C2 also takes 50% of subscription fees it collects on behalf of the trader. Supported trading platforms include C2 Web Trader, Interactive Brokers, Tradovate, Neotic, Tradestation, Ninjatrader, and Metatrader.

Investors (investors or subscribers) pay subscription fees to the strategies they sign up for. Many strategies offer seven-day free trials. Investors don’t have platform requirements for strategies but can sign up with Preferred Brokers to receive discounts on auto-trade fees. Monthly strategy subscriptions range from $20 to $200. Prepaid annual discounts are also available.

Auto-trading requires plan membership with various fees depending on brokers and type of financial instrument (stocks, options, FX, or futures). It’s important to make sure your brokerage account is compatible. C2 accommodates taxable U.S. trading accounts for stocks and options and IRA retirement accounts (but no short-selling or naked options strategies). Auto-trading plans range from the Solo $49- month plan that auto-trades a single trade strategy to $299 Portfolio Plus monthly plan for unlimited strategies and scaling up to 10X. Keep in mind strategy subscriptions are independent of auto-trade subscriptions.

Collective2 Features Breakdown

C2 serves traders who can collect subscription fees for trading their strategy and investors who follow and copy the trades manually or via auto-trade (similar to eToro’s copy trading). Different features apply to traders and investors.

Strategy Leaderboard

C2 continuously updates the strategy leaderboard, indicating the top-performing Trade Leaders. This is the epicenter of the action as top-performing traders get the best exposure with investors looking for profits. Users can sort the list by many categories and variables to determine which traders to follow. Users can also add strategies to watch lists just by clicking the Add to Watchlist tab. This is similar to the social components of eToro, Kinfo, and Nvstr, but the rankings are based more on strategies vs. individual investors.

Collective2 Leaderboard Watch List

BrokerTransmit

The easiest way for Trade Leaders to transmit trade signals is through the BrokerTransmit feature. This requires setting up the trading account at a compatible brokerage. Once configured, then trades entered in your trader brokerage account are automatically transmitted to subscribers and posted onto C2. Subscribers who have signed up for auto-trading with compatible brokers will also have the trades executed in their accounts to mimic the Trade Leader trading activity.Β 

Collective2 BrokerTransmit

Caveat for Trade Leaders

While there are no registration or licensing requirements for U.S. Trade Leaders, the most important restriction is to never provide personal, individualized financial advice. Non-personal comments published to subscribers like “Buying SPY on a breakout through $296” are fine. However, e-mailing an individual “Bob, you should buy the SPY at $296.02 for your IRA account as we discussed earlier, because I think it’s undervalued at that price level.” is a violation.

Strategies

The strategies are the main products on C2. Investors can scroll through and select the strategies they find compelling. They can add select strategies to watch lists and auto-trade in simulated or real accounts. Every strategy provides detailed performance data including annual returns, number of trades, max drawdowns, and percentage of winning trades and months. Strategy description and a cumulative history of every trade made since inception are also provided. Users can opt to simulate the strategy, which will add it to the trade simulator or opt to subscribe to get full-access and auto-trading options.

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Collective2 Strategy Stat Add

Auto-Trade Settings

Investors who opt for auto-trading with their compatible broker have the flexibility to configure parameter per strategy. Users can select the type of financial instruments to trade (Stocks, Futures, Forex, or Options) and Max Trade Size. Stop-Loss parameters can be configured as well as enabling for Short Options positions, which can be extremely risky. Shorting options, aka naked options positions, require level 3 options permissions for most brokers and are susceptible to margin calls and automatic forced liquidations. Always check with a broker and make sure you have enough funds in the account to meet margin requirements.

Social Features

As a social trading platform, there are many ways to interact with the community. The Reviews tab shows star-based ratings as well as comments by date so investors can gauge the top-rated strategies to consider following. To write a review for a strategy, investors but have subscribed to the strategy service for at least 30-days. The Forums are message boards where members can post comments for various trading topics. Users can also Message trade leaders directly with questions or comments. Again, Trade Leaders are prohibited from giving individualized investment advice.

Collective2 Strategy Reviews

Simulator

All investor accounts come with a free simulator to test out a strategy or combination of strategies before subscribing. This enables investors to be financial alchemists experimenting with strategy combinations to help diversify risk or compound performance. Users can swap out different strategies, asset classes, or allocation mixes to create the most optimal portfolio.

Customer ServiceΒ 

Depending on the type of membership plan, customer support service is available via e-mail, chat, or phone service.

Collective2 Platform Differentiators

C2 is unique as a “copy-trade” platform as it caters to stocks and options as well as futures and forex. Most competitors focus on just futures and forex. C2 is arguably the largest social trading platform with auto-trade capabilities. The simulator accounts are a good way to kick the tires. The biggest differentiator is the membership plan based auto-trading instead of a per-trade fee structure. This separates C2 very clearly as a membership network rather than a broker-dealer and keeps SEC scrutiny away.Β 

Is C2 a Good Value?

For traders, C2 is a good value IF you have solid performance and have the capacity to cover the costs. As the competition grows stiffer with more Trade Leaders, it becomes tougher to gain a following, unless performance is excellent.Β  For investors, C2 is a good value for the subscriptions and simulator account. If considering auto-trading, it’s prudent to be familiar with underlying strategies and continue to keep an eye on the activity. Larger accounts should consider multiple strategy portfolios to stay diversified, especially for market downturns.Β 

What Type of Trader Is Collective2 Best For?

Trade Leaders should be seasoned traders and strategists with a track record of successful performance and solid risk management. Investors should be familiar with the asset classes, investment vehicles, and able to follow the trades are best suited. While auto-trading seems passive, it’s imperative that investors continue to monitor their accounts and adjust risk settings as needed. C2 is for experienced traders and investors; newbies are best left to start off with robo-advisors first before expanding into new strategies.

Pros

  • Caters to experienced traders and investors
  • Strategy performance transparency with complete stats and itemization of trades
  • No SEC filings or complicated paperwork filings
  • Free trial periods and simulator to kick the tires
  • Monthly auto-trading membership fees instead of per-trade fees
  • Social trading features like star-ratings and reviews by customer-only ensure accountability and credibility
  • Multiple trading instruments including stocks, options, futures, and forex

Cons

  • Results are hypothetical
  • Auto-trading not currently available for larger online brokers like Ameritrade, Schwab, and Etrade
Day Trade Review

Dave

Dave has been a part-time day trader and swing trader since 2011 when he first became obsessed with the markets. He focuses primarily on technical setups and will hold positions anywhere from a few minutes to a few days. Over his trading career, Dave has tried numerous day trading products, brokers, services, and courses. He continues to test and review new day trading services to this day.

2 thoughts on “Collective2 Review – A Social Trading Platform For Traders”

  1. Horrible Childlike Scam with Fake Results
    This is a horrible, unethical, rude scam of a company. They advertise yearly gains that are not calculated correctly on purpose. As I am a professional trader, I spent months calculating results for each major strategy on the site. Extremely few were profitable. Of those that were profitable in the SIM account, I turned onto my live account. However, this is where we ran into real issues. Every time I subscribed the strategy, the “Trade Leader” posted that “a one time error” occurred. They would find different phrases for this, for example, the next time it was a “black swan event.” Collective2 DESTROYED my account faster than any other form of trading, including Forex, automated strategies, hedge fund, stocks, even Robinhood. The Trader Leaders are unhelpful, and never offer refunds. One admitted to me that his strategy “only works in demo accounts.” It called for such a high level of margin, that one could not have the high minimum account balance advertised (about $50,000-80,000). Instead, you needed about a half a million for any of the trades to work, as almost hit margin calls. Their programmed “Stop Loss” feature also does not work half the time, leading to maximum losses and zero gains. C2’s rude customer service admitted to this fault as well. On top of that, they issued a new commercial featuring a woman who looks just like me as an “idiot trader,” similar to a dog trading. I am an employed professional trader working for an international firm and this company is the childlike one with no risk management.

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  2. I started to use Collective2 about 14 months ago. The yearly gains are based on starting equity minus the current equity, then divide the profit or loss by starting equity. The result is compounded gain or loss same as any index, such as S&P 500. One can move the courser over the performance graph and see the starting equity and the current equity. On Collective2 there are a lot of people who try to be Trade Leaders by averaging down on losing trades or increasing the number of contracts or shares after a losing trade. Eventually they encounter a market that keeps going down and the result is 90% or greater equity drawdown. The way to choose Trade Leaders is to look at their past trades. If they average down or increase the number of contracts after losses, avoid them. There are a few good traders that use proper money management and have good trading systems, but to find them you have to look at the past trades. See if the number of contracts traded is consistent. Profits and losses should be consistent, and the track record should not be based on a few enormous wins.

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