My Philosophy and My Advantages

My Philosophy
Financial markets are inefficient and not random, thus they can be exploited using a long-term, systematic approach for profit. The Theory of Reflexivity holds true, that market prices do not accurately reflect fundamentals but rather people’s perceptions of the fundamentals; furthermore, market prices can in turn affect the very fundamentals they supposedly represent. Price movements and trends observable in charts are a visual manifestation of human psychology and emotions such as fear and greed. Technical analysis is a tool which exploits these movements (generating profits from speculative emotions and more importantly from big hedgers) and trend following is the most efficient and consistently profitable means to do so.

My Advantages
It is very difficult to separate luck from skill when it comes to judging investment performance and it requires decades and decades of data to become statistically significant. However, it takes risk to reap rewards and I believe I have a number of distinct advantages which will lead to my trading success:

– Futures offer exposure to all major asset classes, meaning investment decisions can be optimized for any market condition. While a global, all-encompassing futures strategy is an attractive “one-stop-shop” for an entire portfolio, its uncorrelated returns to equity and bond markets makes it an attractive and essential piece for any portfolio.

– Trend following is a proven system which has existed for decades. The inherent nature of human behavior reflected in the markets means that “herd-like” behavior and trends will always exist. Whereas fad strategies and investments will come and go (LBO, global macro, activist, MBS, high-frequency, venture capital), trend following will work in any global/market/regulatory condition.

– A blended mechanical/discretionary strategy removes as much human interference as necessary while allowing interjection in extreme, generational market conditions.

– As market volatility and noise increases, a longer-term view (daily, weekly, monthly charts vs. intraday) will remain impervious to these market conditions.

– As a smaller fund, I’m able to take advantage of smaller, yet still liquid markets which $500m+ funds are unable to profitably trade. I’m also able to move in and out of positions much faster and efficiently.

– As a Wall Street outsider, my views, perspectives, and ideas are unique. However, this doesn’t mean that I’m uneducated or uninformed, as I’ve dedicated myself to intensively study and practice the craft of trading and hone my strategies. As a young trader, I’m hungry and driven to succeed.