We understand that our primary competitive advantage is our ability to produce strong results for our clients. We do this by staying centered and flexible in our approach, focus on facts, not opinions, and deliver strong risk-adjusted results in both bull and bear markets.
Psychological Overlay- Psychology is Constant:
Another competitive advantage we enjoy is our understanding of how markets actually work. Einstein’s theory of E=mc2 only became possible after he realized that the speed of light is constant. Similar to him, our success became possible after we realized the only constant in the markets is psychology. Markets and players change, but human nature remains a constant. Human nature has been the one constant that has occurred in every single major bubble and subsequent bust throughout recorded history. All of which created trends for people to trade profitably as price charts simply illustrate crowd psychology.
Our Investment System: D.A.M.P.
Our proprietary investment system D.A.M.P attempts to substantially eliminate all human emotion from the decision making process and focus on what matters most, market action in the weekly time frame. For our more advanced clients, we use intra week price noise to generate income rather than to change our directional thesis in regard to our core positions.
We Work When Others Sleep:
The cornerstone of our investment system is that all major trading decisions that lead to the initiation of our core positions are developed while the market is closed and written down and distributed in a clear detailed and concise fashion with annotated charts each weekend. Then, we simply follow the plan and this allows us to be prepared for a multitude of possible outcomes.
Respect Risk: Rigorous Risk Management Techniques Using Hard Stops
The first tenant of our investment system is to play defense first. Years of extensive study shows us that nearly all major failures in history (on Wall Street) stem from poor risk management. Conversely, the one common trait in all major successes are due to a strong respect for risk. This realization has led us to develop our own risk management techniques. We do not risk more than 1% of equity from entry to a predetermined fixed stop. This stop can never be moved to increase risk and must be working in the market place during market hours.
Adapt A Humble & Fact-Based Approach, No Opinions:
Ego has no place in the market. We do not care if we are “right” or “wrong” instead we focus on adapting to what is actually happening. This objective fact-based approach allows us to trade on what we see happening, not on what we think will happen.
Interpret, Do Not Predict Market Action:
In addition to all the aforementioned reasons, we have enjoyed a tremendous amount of success because we interpret and do not predict market action. We maintain objectivity and analyze market conditions as they develop in real-time rather than trying to predict the future. Doing so allows us to remain present and flexible in our approach. It also allows us to adjust our trading strategy when the unexpected arises. We do not allow our predetermined macro views to override what the price action is stating clearly in the weekly time frame.