Cesium works around your “Trade Plan.”   A Trade Plan allows you to quickly and simply determine how the system will respond to dislocation events for your account.  There are two basic elements of a trade plan: to choose your maximum exposure (risk), and your desired target frequency (sensitivity).  Your exposure (risk) is the maximum amount that can be lost on a trade plan if the price of what is bought goes to zero and stays there.  Experiencing a maximum loss is extremely unlikely, but it is important to choose and know this figure before activating a trade plan.  Your target frequency determines how small or large of a dislocation event (depth of draw) Cesium will react to for your account.  Small events happen relatively frequently, where large events are more rare.  Cesium doesn’t know the future, but based on statistical analysis, it calculates parameters to deliver a target of a tradable event every 1 in X days.  It is up to you to specify this 1 in X day period.

Use Cesium’s interactive web tool to view past signals for Trend Following entries and exits.  Trend Following involves using an algorithm to detect a likely beginning of a new trend higher, thereby generating a buy signal.  The resulting long position is then allowed to run, until the algorithm detects a likely end and reversal of that trend – where a sell signal is then generated.   The Trend Following algorithm relies on you to select the timeframe you wish to use for signal generation.  Shorter time frame choices will experience more agility to get into and out of positions earlier, but will also tend to generate greater losses during choppy phases of the market, where price goes up and down a great deal with very little net movement over time.   Longer time frame choices will experience lower agility, waiting longer to get into and out of positions.  But Longer time frames will also experience fewer losses when markets are choppy, as there will be fewer signals applied only toward the larger trends.  Longer time frame choices will tend to ignore the short term chop in prices more than a shorter time frame choice. 

The interactive historical performance tool will show what given choices for time frames have produced in the past.  It cannot predict what choice for time frames will be best suited for future markets.  Cesium makes no recommendations and gives no advice as to how to use this deterministic algorithm, or about any future result in its use.  However, you can view the past results of this deterministic trend following algorithm using the historical performance tool, to draw your own conclusions.