Price Sequence Recognition Strategy

0 Introduction & Context

"I have been trading the Price Sequence Recognition (PSR) Strategy for several years, and its current configuration represents the culmination of eight years of research, testing, and refinement. The strategy reached full operational maturity in September 2025, following extensive backtesting and validation across diverse market environments.

While the current live phase is still statistically non-representative due to its short duration, it already exhibits robust structural characteristics consistent with the backtested framework. My objective with this ongoing report is to document performance weekly to progressively build a statistically meaningful record and demonstrate the strategy's reproducibility over time.

I am not seeking immediate fundraising. My goal is to lay the groundwork for a potential institutional setup within one to two years. Should that not materialize, I will continue to trade the strategy proprietarily — yet my long-term vision is to see it integrated within an institutional framework, where its asymmetric and uncorrelated profile could serve as a diversifying component in multi-strategy portfolios."

Florian Campuzan

1 Executive Summary

Systematized discretionary long-only strategy based on price sequence recognition developed by Florian Campuzan, Sciences Po Paris graduate, CFA charterholder and AMF-certified.

Investment universe: nano, micro, and mid-cap equities listed on NYSE, NASDAQ, and AMEX
Execution: exclusively Market-On-Close (MOC) to avoid intraday noise and ensure consistency
Average holding period: 7 days
Philosophy: long-only breakout + bottom-fishing with dynamic risk/reward adjustment
Goal: capture natural asymmetries of small-cap markets

2 Strategy Performance & Key Metrics*

54.01%

Total Performance
(30 trading days)

6.68%

Daily Volatility
(36.61% Period)

-12.66%

Max Drawdown

1.39

Sharpe Ratio
(Period)

2.65

Sortino Ratio
(Period)

3.51%

Downside Volatility
(Daily)

NUMBER OF TRADES
(Period)

3 / 18

WINNERS/LOSERS
(Period)

14.29%

HIT RATIO
(Period)

16.29

RISK REWARD RATIO
(Period)

1.72%

AVG LOSS
(Per Trade)

0.093

NASDAQ CORRELATION
(Period)

Live Performance Metrics*

30 trading days analysis period (Sep 2 - Oct 13, 2025)

* All performance figures represent actual trading results from a live Interactive Brokers (IBKR) account. No leverage employed, MOC-only execution. Results are net of commissions and reflect real market conditions.

Performance Analysis: The long-only strategy delivered 54.01% return over 30 trading days with strong risk-adjusted metrics (Sharpe: 1.39, Sortino: 2.65). Downside volatility is contained at 3.51% daily versus total volatility of 6.68%, demonstrating effective risk management in live trading conditions.

Trading Statistics: With 21 trades executed during the period, the strategy achieved a 14.29% hit ratio (3 winners vs 18 losers) with an average loss of 1.72% per trade and an exceptional risk-reward ratio of 16.29, highlighting the asymmetric return profile and high-conviction approach.

Resilience During Market Correction: The long-only strategy demonstrated remarkable resilience during the October 10 market correction, maintaining positive performance while both Nasdaq and Russell 2000 declined significantly. This underscores the strategy's decorrelated nature and effective risk management protocols despite being long-only.

3 Scalability & Performance Projections

30% Annual Return Target

Controlled Drawdown up to $100M AUM

30%

Annual Return Target
Sustainable performance

$100M

Scalability Target
With controlled drawdown

<15%

Max Drawdown Target
Risk-managed growth

2.0+

Target Sharpe Ratio
Institutional quality

Scalability Analysis: The long-only strategy demonstrates capacity to deliver 30% annual returns with controlled drawdowns up to $100M AUM. The systematic approach combined with disciplined risk management creates a scalable edge in small-cap markets.

Position Sizing Flexibility: The current elevated volatility reflects deliberate position sizing for demonstration purposes. For institutional implementation, maximum position size would be capped at 5%, reducing volatility while maintaining target returns of 25-30% with Sharpe ratios above 2.0.

Long-Only Advantage: As a long-only strategy, it avoids the complexities and risks of short selling while maintaining decorrelation through selective stock picking and timing in the small-cap universe.

4 Methodology

Technical Approach

Long-only breakout + bottom fishing
Inflection point detection
Short-term trend following
Average Risk/Reward: 16.29

Risk Management

Dynamic risk control
Continuous stop/target adjustment
Average duration: 7 days
No leverage used

Methodological synthesis: The long-only strategy combines discretionary technical analysis with systematic risk management, featuring continuous risk/reward ratio adjustment based on intra-trade volatility. No leverage is employed in the strategy, and all positions are long-only with carefully timed entries and exits.

5 Institutional Interpretation of Ratios

            
                    Sharpe 1.39: Strong risk-adjusted returns for a long-only small-cap strategy
                
                    Sortino 2.65: Superior downside protection - gains significantly dominate loss variability
                
                    Max Drawdown -12.66%: Controlled risk profile for directional long-only small-cap strategy
                
                    Daily Volatility 6.68%: Appropriate level for systematized discretionary microcap approach. Note: This reflects current elevated position sizing for demonstration.
                
                    Risk-Free Rate 3.00%: Conservative benchmark assumption enhances ratio credibility
                
                    Hit Ratio 14.29%: A structurally low success rate inherent to breakout strategies, where a few large winners offset numerous small losses. Despite the limited number of trades and a naturally high proportion of losing ones, this ratio represents a structural floor — reassuring for investors, as profitability is achieved without relying on frequent wins.
                
                    Risk-Reward 16.29: Outstanding asymmetric return profile with controlled risk exposure
                
                    Average Loss 1.72%: Controlled loss size per trade demonstrates disciplined risk management
                
                    Nasdaq Correlation 0.093: Very low correlation confirms strategy's decorrelated nature and diversification benefits for traditional portfolios.
                
                    Russell 2000 Correlation 0.170: Low correlation with small-cap benchmark demonstrates strategy's unique edge beyond traditional small-cap exposure.

6 Purpose of the Pitch

Present an uncorrelated, asymmetric, and scalable long-only strategy to sophisticated investors, family offices, and institutional sponsors seeking:

Uncorrelated return profile to traditional indices
Positive asymmetry with controlled drawdown
Systematized discretionary long-only approach with full transparency
Partnerships or progressive capital allocation up to USD 100M

Active search: strategic partners for incubation, co-investment, or progressive institutional capital allocation.

Note on Current Performance Presentation: The elevated position sizing and resulting volatility in current results are intentional for this demonstration phase. The strategy can be immediately calibrated for institutional requirements with maximum 5% position sizing, reducing volatility while maintaining the core asymmetric return profile that makes this long-only approach valuable for portfolio diversification.

APPENDIX - Monthly Performance Detail vs Benchmarks

Benchmarks used: Nasdaq Composite (^IXIC) - The reference index for US technology and growth stocks; Russell 2000 (^RUT) - The primary benchmark for US small-cap stocks, particularly relevant for our nano, micro and mid-cap investment universe.

Note: All performance figures represent real trading results from an Interactive Brokers (IBKR) account with no leverage used.

Month	PSR Strategy ()	Nasdaq Composite	Russell 2000	Relative Alpha (vs Nasdaq)	Performance Status
September 2025	+29.78%	+4.60%	+3.51%	+25.18%	🏆 OUTPERFORMANCE
October 2025*	+12.43%	-2.42%	-1.85%	+14.85%	🏆 OUTPERFORMANCE

+54.01%

Cumulative Strategy Performance
Real IBKR account, no leverage

+2.18%

Nasdaq Composite Performance
September-October 2025 period

+1.66%

Russell 2000 Performance
September-October 2025 period

Comparative Indexed Performance – PSR Strategy () vs Nasdaq () vs Russell 2000 () (Sep 2 – Oct 13, 2025)

Indexed to 100 on Sep 2, 2025

            🔍 Comparative Analysis
            Systematic outperformance: The long-only strategy significantly outperformed both the Nasdaq Composite and Russell 2000 during September and October 2025 under live trading conditions, delivering +54.01% vs +2.18% for Nasdaq and +1.66% for Russell 2000.
Resilience during market stress: The strategy demonstrated exceptional resilience during the October 10 market correction, maintaining positive performance (+12.43% for October) while both benchmarks declined significantly (-2.42% Nasdaq, -1.85% Russell).
Real account performance: All results come from a live Interactive Brokers account, with no leverage employed (MOC-only execution).
Effective decorrelation: Results confirm very low correlation to traditional indices (0.093 vs Nasdaq, 0.170 vs Russell), with positive expectancy across distinct market regimes including stress periods.
Long-only advantage: The strategy demonstrates that careful stock selection and timing can generate significant alpha even in a long-only framework during market corrections.

        

* October performance calculated from October 1 to October 13, 2025, capturing the strategy's resilience during the market correction of October 10.

7 Questions & Objections

💡 "You're too early."

"That's fair — the live phase is intentionally limited at this stage to validate operational execution. What's important is that live behavior perfectly mirrors the statistical structure observed in 8 years of research and backtesting. Each trade is documented with full transparency to progressively build institutional-grade track record integrity."

💡 "The hit ratio is too low — only 14.29%?"

"It's structurally low by design. The PSR system identifies high-momentum breakout structures with very asymmetric payoffs — a few outliers more than offset numerous small losses. It's not discretionary underperformance; it's the mathematical signature of this type of asymmetry. Falling below this hit ratio would be statistically unlikely, which actually makes it reassuring from a floor-risk perspective."

💡 "How can a long-only strategy perform well during market corrections?"

"The strategy demonstrated remarkable resilience during the October 10 correction. While being long-only, our selective stock picking, precise timing, and disciplined risk management allowed us to maintain positive performance (+12.43% in October) while both Nasdaq and Russell declined. This highlights the power of our price sequence recognition methodology to identify stocks with independent price action."

💡 "It feels discretionary — how repeatable is this?"

"It's systematized discretion. The setup identification is rule-based, coded, and testable — while execution benefits from human oversight to avoid false positives. Every signal, entry, and exit rule is reproducible and verifiable — I simply keep human supervision for quality control, not intuition."

💡 "Your live data window is too short."

"Absolutely — and that's why I'm transparent about it. This phase is for live validation of structural robustness, not marketing. The statistical architecture has been backtested across multiple market regimes, and each live month's data is appended to a growing, auditable dataset. It's a progressive institutionalization process."

💡 "How scalable is this really?"

"The live sizing is intentionally elevated for demonstration, but institutional deployment would cap exposure at 5%, keeping expected annual volatility around target levels while maintaining returns. It's a controlled scaling model — not aggressive growth."

💡 "Why should I believe the edge is sustainable?"

"Because it's structural, not situational. Price sequence recognition is based on statistical recurrence of accumulation–breakout–momentum cycles. It doesn't depend on market mood or leverage. As long as behavioral inefficiencies persist — and they do in nano/microcaps — the asymmetry remains exploitable."

💡 "You're a one-person setup — what about operational risk?"

"That's true for the current stage, which is why I'm positioning this as a pre-fund institutionalization phase. I'm already using fully regulated infrastructure (IBKR, no leverage, documented compliance). The next phase is to onboard partners for compliance, custody, and capital structure, not to prove the edge — that's already statistically demonstrated."

Price Sequence Recognition Strategy
US Nano, Micro & Midcaps

0 Introduction & Context

1 Executive Summary

2 Strategy Performance & Key Metrics*

3 Scalability & Performance Projections

4 Methodology

5 Institutional Interpretation of Ratios

6 Purpose of the Pitch

APPENDIX - Monthly Performance Detail vs Benchmarks

🔍 Comparative Analysis

7 Questions & Objections

CONTACT

Price Sequence Recognition StrategyUS Nano, Micro & Midcaps

0 Introduction & Context

1 Executive Summary

2 Strategy Performance & Key Metrics*

3 Scalability & Performance Projections

4 Methodology

5 Institutional Interpretation of Ratios

6 Purpose of the Pitch

APPENDIX - Monthly Performance Detail vs Benchmarks

🔍 Comparative Analysis

7 Questions & Objections

CONTACT

Price Sequence Recognition Strategy
US Nano, Micro & Midcaps