Process
Methodology
The investment process is constructed around a system of risk control & money management - of tolerating linear losses in the quest for exponential profits. The investment strategies employed are technical rather than fundamental in nature i.e. they are developed from the analysis ofprice behaviour and are not based on an analysis of fundamental factors. The trading models are designed to detect & exploit medium- to long-term trends, while simultaneously applying risk management techniques in order to preserve capital during trendless periods or during trend reversals. Investment activity therefore reflects the trading models' assessment of the market rather than an emotive response to recent events or data.
Risk management
Portfolios are managed to accommodate longer-term risk & volatility tolerances. Given the noisy nature of price data, not all market signals will lead to profitable trades. Significant emphasis is therefore placed on risk management techniques to minimise the effect of loss from any particular trade on the portfolio as a whole. Stop-losses are used & managed in a proprietary manner to balance the potential loss in any trade versus the opportunity for maximum profit. This risk may be managed through variable position size or risk levels for any market. Additionally, a proprietary portfolio construction methodology is used to construct the overall portfolio. This will account for the volatility & correlation of markets, as well as behaviour during specific market extremes.
Discipline
An investment strategy can only be as successful as the discipline of the investment manager to adhere to its requirements in the face of market adversity. By specifying the circumstances under which key investment decisions are made, this methodology offers investors a consistent approach to markets, unswayed by judgmental bias.
The investment process is constructed around a system of risk control & money management - of tolerating linear losses in the quest for exponential profits. The investment strategies employed are technical rather than fundamental in nature i.e. they are developed from the analysis ofprice behaviour and are not based on an analysis of fundamental factors. The trading models are designed to detect & exploit medium- to long-term trends, while simultaneously applying risk management techniques in order to preserve capital during trendless periods or during trend reversals. Investment activity therefore reflects the trading models' assessment of the market rather than an emotive response to recent events or data.
Risk management
Portfolios are managed to accommodate longer-term risk & volatility tolerances. Given the noisy nature of price data, not all market signals will lead to profitable trades. Significant emphasis is therefore placed on risk management techniques to minimise the effect of loss from any particular trade on the portfolio as a whole. Stop-losses are used & managed in a proprietary manner to balance the potential loss in any trade versus the opportunity for maximum profit. This risk may be managed through variable position size or risk levels for any market. Additionally, a proprietary portfolio construction methodology is used to construct the overall portfolio. This will account for the volatility & correlation of markets, as well as behaviour during specific market extremes.
Discipline
An investment strategy can only be as successful as the discipline of the investment manager to adhere to its requirements in the face of market adversity. By specifying the circumstances under which key investment decisions are made, this methodology offers investors a consistent approach to markets, unswayed by judgmental bias.