Methodology of "Steady Trading" is based on the concept of a speculative portfolio. The program employs methods of technical analysis and a risk management system to determine the best time and price to open new and close current positions. This does not mean we disregard fundamental analysis as it is. Fundamental analysis systems have been in existence for a long time and their effectiveness has been proved. We are speaking about the field of application of this or that method of analysis. Each method has its advantages and disadvantages.
If your fund or company is managing capital of more than USD 100,000,000 with investment terms of 5-7 years, it is more advisable to use fundamental analysis to determine the most attractive investment instruments. Fundamental analysis implies forecasting growth of this or that industry or an individual company. Costs involved with fundamental analysis (analysts and accountants' reports by industries or individual companies, services of highly qualified specialists etc.) are fairly high but acceptable with regard to such capital.
Technical analysis is more appropriate for managing capital of up to USD 50,000,000 with investment terms from 6 months to 3 years. Trading strategies developed on the basis of technical analysis differ in that they are more flexible and less costly. Methods of technical analysis are based on studying how market behaved in the past. That is why they require more thorough risk management and ability to make investment decisions fast.
The method of portfolio management employed in "Steady Trading" makes use of momentum of the market and capital diversification combined with active trading. Application of such model of capital management considerably reduces risks and portfolio volatility.
To achieve such result we use:
- both long and short positions
- unique parameters of technical analysis for each financial instrument
- optimal number of securities in the portfolio specially selected for the specified capital and investment conditions (market situation, cost of transactions, acceptable risk)
- control over performance of the selected trading plan
- no forecasts but monitoring current market trends
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