Quantum FX1 Executive Summary
Objective:
The goal of our strategy is to achieve consistent and stable capital appreciation, independent of a market’s direction. The Quantum FX1 system is designed to generate positive returns in any type of market, whether it is moving up, down, or sideways. This system makes it possible for thoughtful investors to employ techniques previously available only to institutional investors and hedge funds.
The Market:
The Quantum FX1 system utilizes the largest and most liquid financial market in the world, the Foreign Currency Exchange. Over $2 trillion dollars are traded each day in foreign currencies. These markets trade 24 hours a day, 6 days a week, presenting investment opportunities around the clock. The continuous nature of these markets has led to the evolution of computer-assisted investment strategies, used exclusively by institutions like banks and hedge funds.
The Foundation:
The vast majority of investment techniques attempt to predict the overall direction of the market. A few succeed, most do not. Therein is the fundamental difference with Quantum FX1. Our system leverages real fluctuations within the marketplace, without trying to guess which direction the market is headed. The foundation of Quantum FX1 is that it combines the intuition of a trader, with the systematic discipline of mathematics and technology, creating synergies of logic and experience.
Risk Management:
One of the most important aspects of Quantum FX1 is its ability to manage risk. More specifically, by diversifying the portfolio across several currency pairs while remaining market neutral, the system reduces the potential impact of any single position. This type of broad allocation is fundamental to the long term stability and performance of the portfolio, and is exactly why hedge funds use these techniques almost exclusively.
The risk management techniques used by most portfolio managers are based on their own judgments and intuition. Unfortunately, it is the inherent subjectivity of these risk management methods which create the uncertainty and inconsistent returns experienced by many investors. Quantum FX-1 is designed to use a superior process, a technique that until just recently was only available to institutional investors and hedge funds.
The Tactics:
Quantum FX1 uses advanced statistical techniques to identify stable, long-term relationships between certain foreign currencies. The system is market neutral, so its ability to generate returns is not dependent on market direction. More specifically, the system identifies imbalances in the long term relationships and opens two separate positions, one long and one short. Both sides of the position remain open until either, the prices revert back to specific levels, or risk management exits the trade. Under no circumstance is one side of the trade exited before the other, positions are opened and closed simultaneously to maintain a hedge against the underlying direction.
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