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          >>VIDEO!<< The Precision Trading System, user guide showing how to set it up

 

 

  

Trend following....

The Precision Trading System, see what is system is doing today? 

 

  • Allows huge potential gains that are missed when profit taking at "target levels"

  • Improves risk reward ratios

  • Cuts out the hard work

  • Rarely misses the large moves

  • Keeps losing trades small

  • Relaxed stress free trading

  • Makes superior gains compared to other systems

  • Read more about the system

 

 

Risk v reward

The Precision Trading system Risk v Reward ratio tested over 17 years

 

The ratios matter...

 

The chart on the right shows the risk reward ratio tested on the entire FT-SE250 constituents simultaneously.

 

Achieving a high risk reward ratio is a vital part to any trading system, the chart on the right demonstrates the robustness of the system, over 17 years of historical testing it maintained a risk reward ratio always greater than 1.7:1 and overall it averaged a very healthy (black line) 2.26:1 over this period.

Operating at 1.7 RR, a system is profitable with any  win /lose ratio that exceeds 36.5%.

As the odds of winning on any trade come out at around 47-49.7% one can see easily that the maths work nicely.

 

Win Lose ratio

17 years worth of testing shows robustness

The ratios matter...

 

System win to loss ratio is another important factor to consider when testing.

If one of the two ratios is poor, the other must be higher to compensate this.

If you remove commissions and market spreads from the equations, you arrive at a 50-50 chance of winning on any trade.

When we allow for costs, this is reduced slightly as the chart on the right illustrates. 

As winning trades are left to grow, and losers are cut fast, the combined effect of these 2 ratios is PROFIT

 

How much risk?

The system sweet spot is between 15-20% of Equity risked  Download more info

Equity % risked

 

Knowing how much risk to stop losses on your portfolio is a frequently overlooked topic.

But this factor alone makes a STAGGERING difference to overall profits, draw downs and also the most important of the over looked subjects, HUMAN EMOTION.

 

If one builds a system with huge profits but has potential for huge 50% draw downs in equity, one would have a heart attack on most bad days!

The chart on the right shows the average draw downs of the precision system produced by varying overall risk to stops.

 

More about how much to risk

 

Longevity

Trend down or trend up? Its irrelevant!

Patience is the key

 

Having faith in your system counts, or you will be unable to stick to it. The chart shows 2 small losing trades (page centre) which lasted 1 and 2 months each, Sticking with the system paid off in multiples on the 2 later trades. The dead dull markets of 1995, didn't make much for trend following systems.  Sooner of later the market always makes its mind up where it wants to go..... The Russian crisis of 1998 and the Tech boom and bust of 1999,2000 paid out huge gains for trend followers.

 

Read more about the system

 

 

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