Stocks

Three Reasons Cycle 9’ers Succeed

By Adam O'Dell  |  August 8, 2018

I recently wrote about the 428% “windfall” profit my Cycle 9 Alert readers just captured.

In short, the grocery distributor I recommended to them in late May got the buyout offer we were positioning for. SuperValu’s shares shot up 67% overnight… and our stock options began selling for more than five times what we paid for them!

Last week, I shared with you how my strategy is specifically designed to put the asymmetry of risk and return in our favor, allowing us to position for huge and completely unlimited profits – of 200%, 300%, and even 428%, like we took on our SuperValu trade.

Meanwhile, our risk is completely limited.

Imagine being able to risk no more than $265 on a “five-bagger” trade, like this one.

And being able to walk away with $1,405 just two months later – your original $265 and $1,140 in pure profits!

That’s exactly what my Cycle 9’ers had the opportunity to do on this one.

And it’s exactly what we’ve aimed to do on each and every one of the trades I’ve recommended since launching my Cycle 9 Alert service in late 2012.

You see, while our SuperValu trade was a great one my Cycle 9 system doesn’t rely on one or two “huge” winners.

Sure, the fact that we can’t lose more than X, but can gain 2X, 3X, 4X or more… that’s one reason we’ve been so successful success over the past five years.

But there are two additional reasons you should know about…

The second reason is: we win more often than we lose.

That is to say, our “win rate” is greater than 50%.

Realize, with all their uncertainty and moving parts, predicting anything in the financial markets – with results better than a coin toss – is extremely challenging.

Harry’s favorite economist, Lacy Hunt, Ph.D., once joked that the Fed could immediately improve its forecasting ability, if they’d only – get this – start flipping a coin!

It sounds preposterous. But a lot of investors (and maybe even the Fed) would be thrilled to be “right” even 50% of the time.

Now, as a practical matter, it is possible to make money over time, even if you win fewer than 50% of your trades. But, psychologically speaking, I’ve learned most investors prefer sticking to a strategy that wins at least half the time.

That’s why I’ve always favored investment methodologies with win rates better than 50%.

And why I’m proud to say that Cycle 9 Alert has accomplished a win rate of 73% since our late 2012 inception!

That means that for every 10 trades we make, we win about seven of them and lose about three. Last year, we did even better, making profits on 86% of our trades!

These are very favorable win rates. And it’s not just a fluke. We’ve earned this track record after making around 145 trades in more than five years.

All told, our high win rate is one reason why we don’t have to rely on just one or two “huge” winners to make our bottom line each year.

When you win seven out of every 10 of your trades, as we have, you don’t need each one to be “huge.”

That said…

Our Winners Are Bigger Than Our Losers

The third reason for our success is the size of our wins relative to the size of our losses.

I mentioned before that it’s possible to make money over time, even if you win fewer than 50% of your trades. That’s true, but only if your strategy is always capturing “huge” winners, relative to the size of your losers.

For example, if you run a strategy that only wins 33% of the time, your winning trades must be TWICE as large as your losing trades, just to break even. Otherwise, the math just doesn’t work out for you.

Now, Cycle 9 Alert is NOT that type of low win-rate strategy. Since our win rate is wellabove 50% (it’s 73%, in fact), we could, in theory, take “small” winners and somewhat “larger” losses.

But here, again, my system is designed to do better than that.

Over the past five-plus years, our average winner has resulted in a 92% profit, while our average loser has amounted to a 67% loss.

This means we could consistently make money, even if our win rate was less than 50%.

And since our win rate is actually much better – at 73% – we do quite well!

All told, my Cycle 9 Alert subscribers have enjoyed consistent, lasting success ever since 2012.

Much of their success can be explained by the design of my systematic Cycle 9 strategy, and its three defining features:

  1. We win more often than we lose,
  2. Our winning trades are, on average, bigger than our losing trades, and
  3. Our risk is fully limited to “X,” but our profits are unlimited – and often deliver to us gains of “2X,” “3X,” “4X” and more!

This has been our “recipe” for success over the past five years… and it’s why I’m confident we’ll have great successes for the next five years, too!

Adam O'Dell

As Chief Investment Strategist for Dent Research, Adam O’Dell has one purpose in mind: to find and bring to subscribers investment opportunities that return the maximum profit with minimum risk. He achieves this with his perfect blend of technical and fundamental analysis.MORE FROM AUTHOR