Quantitative Forex Trading

Probability.
Quantts trades the currency markets based on proprietary quantitative models, which means we are able to apply a level of probability to certain market moves. We are not trying to capture every market move. The aims of models are simply to improve the odds and provide a system for filtering out the majority of false signals that are received. Of course, we still encounter losing trades, but we fully expect a market beating positive return over the course of a year.  

We have a database stretching back many years, with detailed exchange rate movements of the major currency pairs after a certain technical indicator gave a signal. To know if these signals work you will have to go back in time to see what the result would have been had you dealt on those signals.
And thats what we did. 
After many months of testing, fine tuning and demo dealing, we finally developed a robust working system. 

Stop loss. 
A model may give a reliable signal in 90% of the cases, but if the trader loses too much in the other 10 %, then it's all for nothing. It's most important to secure all open positions with a stop loss. This means that the position will be closed when the loss reaches a certain limit. 
Quantts works with stops. Automatically installed stops. Our stops are the result of vigorous testing and are strategically placed relative to our potential profit. 

Position sizing. 
We know where we enter a position, and we know where we exit. We expect that the results of hundreds of trades that we have seen in the past will repeat themselves in the time to come. In such a long period there are times when the model is performing good, and times when it is losing money. On the long run we expect similar results over a long streak of deals, but the order of appearance will be different. And there is always the risk that a poor period starts today. So we have to keep our powder dry in order to benefit from when our models perform most strongly. We always have to be able to take the next trade again.

Our database stretches back many years. Like we said, the number of signals and variables is unlimited, and it is impossible to keep records of all of them. Therefore, we focused on a few variables that we feel comfortable with. This gives us enough confidence to trade Spot Fx on both our clients' and our own accounts. 

Risk and Return.  
Thanks to our detailed statistical analysis of historic market data, our winners yielded us about twice as much as money lost on the loss making deals. This type of approach to trading, of cutting losses and letting profits run, is a definite recipe for long-term success, something which is evident from our gross 60,2 return in 2010. (gross 60 percent, minus performance fee of 30%, and after applying the "high water mark" rule means a 38,4 percent return for our customers)

Our level of certainty is 3 standard deviations (99,8 %) for our maximum loss in one month that we set at 15 % of our initial equity. That may seem like a lot (and yes, it is) but it should be remembered that stock indices may suffer similar losses without having the potential upside that we offer. 

Should you wish to know more about what we do, please feel free to contact us.