• Basic strategy is to buy and sell stocks based on market & sector level movements

 

• Typically results in short-term holding periods. 

• Risk is reduced by attempting to be out of the market as a downturn begins.

• At the start of the subsequent recovery, new positions are taken in the strongest sectors

 

• No attempts are made at prediction, all decisions are reactions to existing market conditions.

 

• Trades based on a shortlist of 180 stocks only, no other stocks allowed.  These are divided into 5 sectors (Tech, Financial, Healthcare, Energy and Materials).  Stocks are further sub-divided into their constituent industries.

 

• Each algorithm allows a maximum number of positions, 6 in the case of Algorithms A & B.  Cash is almost-equally divided among these positions.

 

• It is expected that there will be approximately 160-180 trades over a full year, dependant on market conditions.  Duty cycle is less then 50%.

 

• During market downturns, usually no positions are filled (100% cash).  Positions will be re-filled once the trading algorithm identifies an upturn in one or more sectors. 

 

• Buy signals often occur simultaneously across different sectors resulting in natural diversification.  Any concentration in one sector will be short lived due to the short-term nature of each trade.

 

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