Leverage

Ceri Shepherd

12/5/2021 1 min read

Not much to say here, always used leverage, our system was designed with leverage in mind, and was optimised for a certain amount of leverage.


I feel that our system has always been good enough, and with the development of the three phases provides enough protection to be able to use leverage.


Leverage is always a double edged sword. Fabulous on the way up, and not very pleasant on the way down. The key is to use an acceptable leverage. For us that is 3 to 1. So with a £100,000 we will take a £300,000 position, all of our published results are based upon 3 to 1 leverage, this works well and provides an acceptable risk to reward ratio.


Our system is completely flexible, we can use whatever leverage you would like from no leverage up to 4 to 1. 


However we will not manage money using more than 4 to 1 leverage, the account becomes too volatile, and it is then an unacceptable risk to reward ratio, outliers using large leverage are terminal.



Leverage is just a tool you borrow an amount of money at X percentage to make back a far larger amount than this X percentage. If you are right on the market, it just means that you are more right, and also vice versa.


If your system is good, backtested and proven over many years and many different bull and bear markets limited leverage is a very important tool.


Our results over the last 26 years are simply based upon two factors, being right with the primary trends and using limited and consistent leverage.

ceri@trendinvestor.co.uk
01329 738 738