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TradersCALM - Trend Following Boost © "Dedicated to trading with good feelings." All services are free. |
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This is a story of hope for trend-followers struggling to make good profits regularly. Traders who make big money trend following are celebrated and written about in books. And rightly so, because this level of achievement at trend-following is all too rare. Why rare, because trend-followers wittingly or unwittingly often use persistence (probability of continuation) of just over 50% (or lower) to help them make profits. So their unweighted edge, 2p -1, where p is persistence percentage, is quite small - not much better than betting on red at roulette! There is good news just waiting for you. Spreads (as opposed to single instruments) often have persistence of about 60%. To put this in perspective, a persistence of 53% gives a 6% unweighted edge, a persistence of 60% gives an unweighted edge of 20%, or over a three-fold improvement before expenses, and probably a four-fold improvement allowing for expenses With such improved odds goes better feelings, and fewer mistakes, boosting net profits further. So what are you waiting for - investigate spreads of highly correlated markets and make your profits something worth writing home about. |
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