Trading system

A trading system is a method developed by a professional trader to trade on the stock market. Such a trading system may depend on the trader's instincts, but often it is also computer-controlled. A successful trading system is often based on various techniques, such as technical analysis, fundamental analysis, various algorithms, quantitative analysis and all other conceivable methodologies that a trader uses to determine what he/she invests in.

Follower

As a follower of a trading system, you execute exactly the same transactions of the trading system on your own account. The software that Systems2ollow uses, ensures that a transaction of a trader also takes place on your own trading account. As a follower, you are the only one who manages all the affairs of your trading account.

Required capital

Each system requires money so that the exact same transactions are executed in your account as in the trader's portfolio. We call this: required capital. For each system it is stated what the minimum capital required is to follow the system 1 on 1. We call this Factor 1. If you now want to take twice the positions of the system, we call this Factor 2. You must therefore also have twice the required capital in your account.

Factor

The factor which you choose as a follower determines how many times you want to follow the transactions of the trading system. Factor 1 means that you as a follower follow all transactions of the trading system exactly once. Therefore you need the required capital. If you choose factor 2, all transactions of the trading system are executed twice through your own trading account. The follower will also need the required capital twice.

Linking to a trading system

After payment of the subscription fee, a link will be made between the trading system and the trading account of the follower. As soon as this link is active, every trade of the trading system will also be executed on the own trading account of the follower.

Exact same yield

Systems2follow always strives for exactly the same efficiency. In practice, the return differs slightly due to the difference in prices. An example: a trader you are following buys 20 shares at 280 dollars. The trader buys these shares in the range of 279.90 to 280.10 dollars. The system return will reflect the average of all purchases, but this may be different for each follower. In addition, it is possible that an order cannot be executed at all, because there are no sellers/buyers. In recent years, the differences have been small.

Investing is interesting, but involves risks

That's why Systems2follow lists a risk indicator with every investment system. We test our trading systems extensively, but stock markets worldwide are dependent on many external factors and there is always a chance that you, as an investor, will lose money.

We base our risk profile on products traded within a trading system. For example, a trading system with only shares is less risky than a future system. We have classified our risk factor between 1 and 7, as indicated on the website of the AFM. In our system, factor 1 is the least risky and factor 7 is considered very risky.

Shares

Shares are proofs of ownership of companies. Each share represents a small ownership stake in that company. These shares are traded on stock exchanges. Traders try to make a profit by buying and selling these shares.

Options

This is a leveraged product on underlying assets (such as shares). Buying options gives the right to buy the underlying asset for a certain period and a predefined price. On the other hand, option sellers (writers) have to explain the underlying asset for a set period.

Turbos

A turbo, or a speeder, gives investors the opportunity to invest with leverage in various underlying assets. These include shares, stock market indices, currencies, bonds, commodities and investment funds.

ETFs/Trackers

An ETF stands for an Exchange Traded Fund. In other words, it is a fund that can be traded quickly. Most ETFs are Trackers, they "track" an index or a specialised sub-index. There are also ETFs that are not Trackers. In these ETFs, the manager himself puts together a basket of shares he finds interesting to follow. For example, a number of shares of companies active in the hydrogen sector.

Futures

A future is a forward contract to deliver an underlying product at an agreed time in the future at an agreed price. It is a derivative that derives value from the price of an underlying product. This can be an index, a financial instrument, but also a commodity.

CFDs

A contract for difference (CFD) is a contract between two parties, usually described as the "buyer" and the "seller". The seller pays the difference between the value of an underlying asset when it is bought and when it is sold. When this difference is negative, the buyer pays the seller.

MIX

There are several traders who use multiple instruments. They are often combined to hedge risks. The best known mix is that of shares and options, whereby the options are used to hedge the risk of shares.

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