PHILOSOPHY

Our view of the market

The market is a dynamic entity that is subjected, and continually adapts, to various stimuli. At times, global macro policy changes or other such events can cause market expectations to shift dramatically thus creating a chasm between where the prices are and where they should be. When this occurs, the market attempts to regain a state of equilibrium by moving in a unidirectional manner that is defined as a trend.

Our program is based on the premise that people’s expectations adjust slowly and manifest themselves in long-term price trends. We believe that participating in such price movements will generate alpha. We do not predict trends but do try to take advantage of such an occurrence once we have confirmation of its existence.

Markets can experience fluctuations in price which may or may not signal fundamental shifts in direction, thus our focus on the strict adherence to prudent risk management techniques.

METHODOLOGY

Our approach

The methodology is wholly based on our belief that prices eventually reflect all relevant information. That is, anything that could possibly affect the market price of a financial instrument including fundamental, geo-political, technical or psychological factors, will be reflected in the price over time. Price signals can be noisy and may have to be filtered to discover the underlying true information. Nevertheless, a study of market price is the foundation for our analysis.

The approach is ‘systematic’ in that models which generate trade recommendations are utilized to initiate positions at specific, predetermined price points. All positions are directional in nature. In the vast majority of circumstances, we will follow the specific signals generated by the models. However, there may be times when certain exogenous events, such as global crises causing market and price volatility, may require us to adopt a more discretionary approach towards the investment process. As a result we may make adjustments to the size of positions or the timing of trades in an effort to control risk or to take advantage of potential profit opportunities.

We employ absolute return strategies that are not correlated with major indices or asset classes. Our goal is to achieve consistent capital appreciation over a long-term investment horizon. Risk management is of the utmost importance and as such, predetermined stop loss* levels are set for each position at its inception. In addition, we utilize a proprietary quantitative methodology to determine the size of each position with a view toward mitigating the risk per trade.

* Stop Loss orders are not guaranteed and, at times, extreme market conditions may result in “slippage” where the FX counterparty executes the order at the best available rate.

TRADER

Akhilesh S. Ganti

[B.S (Biochemistry), M.B.A (Finance)]

Mr. Ganti, who is registered as an ‘associated person’ (AP) and listed as a ‘principal’ of Arctos FX LLC, has traded the financial markets for over 20 years. He has experienced both sides of the “market maker/ price taker” dynamic that defines a market. As Senior Risk Manager at FX Solutions LLC, he effectively deployed strategies to mitigate “market maker” risk. Conversely, as Senior Trader for Forex Funds, LLC, his role was that of a “price taker” engaged in proprietary trading for a commodity fund. He is directly responsible for all trading, risk and money management decisions made at Arctos FX LLC.

His trading philosophy, the crux of the program(s), has evolved through years of extensive research of the markets. Though initial forays were mainly discretionary in nature, the vagaries of the market led him to focus his efforts towards creating a more efficient method of generating alpha. FX_TRVf is the culmination of this process. Please see the ‘methodology’ section for more information about the program.