Diversified Systematic Trend Following Workflow Process
Wake Up….It’s your shift again!!!!!!!
In our ATS Members Forum we are currently stepping through a detailed workflow process designed to empower our members to develop their own Diversified Systematic Trend Following Portfolios. We have been very busy over the last few months dotting the i’s and crossing the t’s and are quite proud of this achievement.
Our process embeds the principles of divergence and positive skew into all our solutions with a design first process, that then provides variation around our core design principles which respond to the dynamic and adaptive nature of trending markets over time. The process is specifically configured for the retail trader who seeks to emulate the professionals in the game but lacks sufficient capital to achieve the degree of diversification that might otherwise be achieved across asset classes….but we provide a number of workarounds that specifically address this issue in our process.
We provide a detailed overview of the major assumptions and processes that we use in our current workflow from which we then compile robust portfolios using Forex and Contracts for Difference (CFDs) products made available to the retail trader by a large number of industry brokers.
We believe that the workflow process itself is far more valuable than the outputs it generates. Having an understanding on how to apply this process makes you a far more formidable trader than simply a trader who uses 3rd party algorithms.
Out intent at ATS is not to supply trading algorithms to our members but rather to provide instruction to our members on how to develop their own systematic portfolios…so we do use algorithms but these algorithms are used for the processes themselves. The member then as an end product can create their own diversified suites of trading algorithms that they can compile into powerful portfolios using our preferred technique. We feel that it is far more important to provide A PROCESS to our members which can be used as a method to continuously improve a portfolio as opposed to simply providing a STATIC PORTFOLIO SOLUTION with a finite shelf-life.
Having a method of system development and portfolio creation at your disposal allows you to construct robust and adaptive trend following algorithms using your own brokers data and available universe. We put the power of portfolio compilation into your hands.
While we are strong advocates of trading divergence and consequently embed the core principles of trend following and momentum into each return stream generated by the process, we empower members to test and craft their own portfolio solutions around this core principle. In this manner, we ensure that a degree of ‘ownership’ of the member is embedded into the process. Given the psychological challenges faced with ‘trend following’ it is imperative that confidence in the process is built into the mindset of our members to ensure that the system rules are not overridden when times are tough.
As this workflow process is a comprehensive method, there is a lot to absorb within this content. We recommend that our members take it slowly and surely and step through the content in a procedural manner.
The workflow has been specifically designed to systemise many of the processes that are typically left as discretionary decision-making points. We firmly believe that a systematic decision-making process is a preferred basis to evaluate the rigour of quantitative testing methods….so where we can systemise our processes….we do so.
This workflow process specifically responds to Diversified Systematic Trend/Momentum methods. This trading style has enjoyed a long-term track record in the Funds Management industry in delivering absolute returns to investors through capitalising on the principle that, over the Law of Large numbers, trending price movements within liquid markets tend to persist.
Due to the need for extensive diversification, this method has in the past been reserved for the Fund Managers who possess significant AUM at their disposal, but thanks to new tradeable products and microlot offerings being made available by Retail Brokers, it is now possible with a far smaller capital base for the Retail Trader to emulate professionals in deploying similar diversified systematic trend following methods,
There are several specific challenges that this workflow seeks to address, namely:
- To provide a method which responds to the adaptive nature of trending markets; and
- To provide a method that works within the capabilities of typical retail trader limitations of broker access and capital limitations.
This workflow process provides a method that addresses these challenges.
So if you are interested in following along with us as we describe the processing tasks and want to take these workflow algorithms for a road-test yourselves, then sign up and jump onboard.
Trade well and prosper
The ATS mob