As you are probably aware, I aim for 100% returns each year, and this year has been no exception. At the time of writing this post, The Winning Trader System is up over 120% for the year to date.
To put returns of over 100% per year into perspective, due to the power of compounding, if you start with £10,000 and grow it at 100% per year you end up with £1 million in less than 7 years. The actual figure at the end of year 7 is £1,280,000.00.
If you compound your original starting capital of £10,000 at 165.8% you end up with £1,684,540.00 at the end of year 7.
As you can see, the power of compounding at these rates of return produces astounding results. The 165.8% shows the average annual return of the system when run back over 25 years of market data.
The power of compounding is witnessed in many places and is the reason for house price growth over time. Depending on which source you get your information from, UK house prices have grown at 11.4% on average each year for since 1954. We are all aware of how house prices seemingly shoot up over the years.
Imagine what would happen to house prices if they grew at even faster rates? Better returns are available to people who trade in the correct way, and as the example above shows, one can quickly build up a small fortune.
As the future will not be exactly the same as the past, I have reduced our expectations to just 100% per year. It is of course very possible that the next few years will in fact be better than the past.
The last few years of trading this system has shown that in excess of 100% per year returns is a very reasonable expectation. We will of course aim for even better returns over the years to come.
