DIVING DEEPER INTO THE DIFFERENCE:
Years before the founding partners met, our research into how other quantitative & systematic strategies failed routinely pointed to single underlying source that caused systemic & systematic failure. The why and how various models or concepts failed was due to outcome being highly dependent or correlated to a perspective/aspect of singularity. Meaning results was heavily correlated to a single market condition, strategic concept, individual source of alpha, or single variation of value exploited. In essence, per strategy + per asset outcome was not diversified, which inherently increases the risks randomness or the asset's characteristic/behavior changes will negatively and significantly impact outcome. This shined a bright light on the appropriate path to discover creative and simple solutions to mitigate many of these risk perspectives. A path that seeks to magnify the benefits of diversification, however not in the traditional sense of rudimentary allocation schemes. The proprietary structures implemented seek to both individually & collectively work to increase the per position probability of positive outcome, while reducing outcome's correlation to any single factor. This begins with the understanding that "value", in all its forms, is extremely subjective, thus can be exploited in many ways within a single strategic structure. This is why every model Equity Sciences will develop will allow multiple entries per position. While multiple entries is a common practice for some institutions, its mainly due to allocation size. However Equity Sciences specifically allows for multiple entries, so that we can dynamically exploit multiple market environments & sub structures within a single strategy & intra-position. While we always aim for the initial entry to be the most efficient, its not always going to be accurate or correct, due to the somewhat stochastic nature of randomness and the ever increasing market volatility. Allowing multiple entries, creates the framework to exploit multiple variations of value, and to apply adaptive multi-factorial value allocation models, which dynamically adjust the # of entries per position, % Allocated per entry, & % allocated per position. Combining multiple entries that all seek some variation of random, reverting, or cyclical value, an intelligent allocation model, with Market Classification we now have the ability to base every decision off of some form of justification. We feel allocation management is a critical piece of a complete product, that can help reduce risks, improve positional probabilities, and ultimately extract more strategic efficiency. An aspect/structure not pursued as heavily by other researchers. While we always aim for the initial entry to be accurate, should it not be for various reasons, multiple entries & an adaptive allocation model is added to act like a safety net. We want the justification for positive outcome to be the robustness of the initial entry, and all other structures added are there to mitigate its risk of falling out of favor with price behavior. The main structures deployed within our complete products are:
1. Market Classification - breaking market behaviors down into 64 repetitive classifications/conditions.
2. Initial Entry model per classification
3. Additional Entry model per classification
4. Allocation control module overlay, which combines market classification & proprietary multi-factorial value analytics.
5. Dynamic Exit logic - each classification deploys its own set of exit models, that encompass logic to both protect returns or maximize them, depending on the condition, models executed, & position location.
While this may seem overly complex, we seek to follow the works of John Conway on rules & complexities, by maintaining creatively simple strategic concepts. However we seek to exploit the benefits of specificity without increasing the risks of over fitting, the complex structures implemented actually work towards reducing risk, not increasing them. Our strategic concepts seek to align with the fundamental, behavioral, technical, & linear biases of the assets we pursue. Which is why we focus on Sector + Index ETF's, and Large Cap Stocks. All concepts seek to exploit value in its many forms, and to tune every model to each asset's characteristics. While the individual product's may seem complex for many, we make the application and usage extremely simple for our clients. The ability to leverage our years of dedicated research to deploy in a quick and simple manner, following careful review and analysis. We have worked tirelessly to design concepts which venture beyond buy&hold, with the goal our clients will both learn from the philosophies deployed and benefit from products that seek to offer more consistency and growth potential compared to traditional rebalancing schemes. While we have put extensive efforts into all aspects of design, to mitigate as many risk factors as possible, nothing is perfect or infallible. Every product will produce draw downs and losing positions, as no level of detail can completely remove all risk. For clients who deploy our purchased products or signal services, we remain in a constant state of improvement, thus as new conditions, data sets, or concepts emerge we will always seek to update and improve where/when possible. We work towards providing a level of customer service equal to the level of effort we placed into product development. So we hope to have the opportunity to serve you well for many years to come.
Years before the founding partners met, our research into how other quantitative & systematic strategies failed routinely pointed to single underlying source that caused systemic & systematic failure. The why and how various models or concepts failed was due to outcome being highly dependent or correlated to a perspective/aspect of singularity. Meaning results was heavily correlated to a single market condition, strategic concept, individual source of alpha, or single variation of value exploited. In essence, per strategy + per asset outcome was not diversified, which inherently increases the risks randomness or the asset's characteristic/behavior changes will negatively and significantly impact outcome. This shined a bright light on the appropriate path to discover creative and simple solutions to mitigate many of these risk perspectives. A path that seeks to magnify the benefits of diversification, however not in the traditional sense of rudimentary allocation schemes. The proprietary structures implemented seek to both individually & collectively work to increase the per position probability of positive outcome, while reducing outcome's correlation to any single factor. This begins with the understanding that "value", in all its forms, is extremely subjective, thus can be exploited in many ways within a single strategic structure. This is why every model Equity Sciences will develop will allow multiple entries per position. While multiple entries is a common practice for some institutions, its mainly due to allocation size. However Equity Sciences specifically allows for multiple entries, so that we can dynamically exploit multiple market environments & sub structures within a single strategy & intra-position. While we always aim for the initial entry to be the most efficient, its not always going to be accurate or correct, due to the somewhat stochastic nature of randomness and the ever increasing market volatility. Allowing multiple entries, creates the framework to exploit multiple variations of value, and to apply adaptive multi-factorial value allocation models, which dynamically adjust the # of entries per position, % Allocated per entry, & % allocated per position. Combining multiple entries that all seek some variation of random, reverting, or cyclical value, an intelligent allocation model, with Market Classification we now have the ability to base every decision off of some form of justification. We feel allocation management is a critical piece of a complete product, that can help reduce risks, improve positional probabilities, and ultimately extract more strategic efficiency. An aspect/structure not pursued as heavily by other researchers. While we always aim for the initial entry to be accurate, should it not be for various reasons, multiple entries & an adaptive allocation model is added to act like a safety net. We want the justification for positive outcome to be the robustness of the initial entry, and all other structures added are there to mitigate its risk of falling out of favor with price behavior. The main structures deployed within our complete products are:
1. Market Classification - breaking market behaviors down into 64 repetitive classifications/conditions.
2. Initial Entry model per classification
3. Additional Entry model per classification
4. Allocation control module overlay, which combines market classification & proprietary multi-factorial value analytics.
5. Dynamic Exit logic - each classification deploys its own set of exit models, that encompass logic to both protect returns or maximize them, depending on the condition, models executed, & position location.
While this may seem overly complex, we seek to follow the works of John Conway on rules & complexities, by maintaining creatively simple strategic concepts. However we seek to exploit the benefits of specificity without increasing the risks of over fitting, the complex structures implemented actually work towards reducing risk, not increasing them. Our strategic concepts seek to align with the fundamental, behavioral, technical, & linear biases of the assets we pursue. Which is why we focus on Sector + Index ETF's, and Large Cap Stocks. All concepts seek to exploit value in its many forms, and to tune every model to each asset's characteristics. While the individual product's may seem complex for many, we make the application and usage extremely simple for our clients. The ability to leverage our years of dedicated research to deploy in a quick and simple manner, following careful review and analysis. We have worked tirelessly to design concepts which venture beyond buy&hold, with the goal our clients will both learn from the philosophies deployed and benefit from products that seek to offer more consistency and growth potential compared to traditional rebalancing schemes. While we have put extensive efforts into all aspects of design, to mitigate as many risk factors as possible, nothing is perfect or infallible. Every product will produce draw downs and losing positions, as no level of detail can completely remove all risk. For clients who deploy our purchased products or signal services, we remain in a constant state of improvement, thus as new conditions, data sets, or concepts emerge we will always seek to update and improve where/when possible. We work towards providing a level of customer service equal to the level of effort we placed into product development. So we hope to have the opportunity to serve you well for many years to come.
Do not miss our Fall Promotion. Receive a 15% discount on all software packages from
September 16th until November 15th. Take your trading BEYOND Buy and Hold.
Use the discount code Beyond15 at checkout.
September 16th until November 15th. Take your trading BEYOND Buy and Hold.
Use the discount code Beyond15 at checkout.
Disclaimer: Equitysciences.com offers tools and services for investors and traders to assist in their individual trading decisions. These are not offered as guarantees of future performance. No representation is being made these products will generate profits. Each subscriber is responsible for their own gains or losses when utilizing these services. Equitysciences.com is not an investment advisor or commodity trading adviser and these products are available for the subscriber to implement using their own discretion.
Hypothetical Performance Disclosure:
Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.
Hypothetical Performance Disclosure:
Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.