What makes a good trader?
Although many skills are required to be successful in the trading business, the main ones are
- Computer Skills
- Mathematical and Statistical Skills
- Logic and Problem Solving Skills
Although it is relatively easy to create a trading system that should make money, it is very
difficult to actually implement that system consistently without discipline. Each and every trade must be placed accurately
and in a timely manner in order to realize the profit expected of the system. We have spent considerable effort automating
every aspect of our trading to ensure systems are implemented accurately and efficiently, and developing mental discipline
to ensure the discretionary part of any system is handled consistently.
Without confidence in your trading systems and process, it is impossible to continue to trade
through a losing period without modifying or abandoning your systems at the worst possible moment. We have done
extensive research and testing to ensure all our trading systems are based on a fundamental way the markets work in order
to have extreme confidence that they will continue to be profitable in the future.
For significant amounts of the time, even a good suite of trading systems can have poor or flat
performance. It is very important to be patient through these flat periods and not deviate from your trading plan, or
make trades through boredom, or the need for action.
In the highly automated and electronic markets of today it is essential to have a high level
of computer expertise in order to compete with other traders. We have extensive expertise in systems analysis and design
that we have applied to the trading business in order to automate almost all of our trading processes. The required
backup technology and procedures are also in place to ensure uninterrupted operation of all our trading systems.
Mathematical and statistical skills
An ability to use mathematics and statistics to accurately estimate the
effectiveness, tradability, and profitability of a trading system is essential to the
success of a trading business. We have developed proprietary methods to develop, test, and implement all our trading
systems with a high level of predictability using advanced mathematical and statistical techniques.
Logic and Problem Solving Skills
A trading system is really an answer to the problem of creating a strategy that overcomes trading
costs (commission, slippage, and spreads) and tilts the odds of success in your favor enough to make a predictable profit.
We have extensive experience in business analysis and problem solving that we have applied to the trading domain to create
effective solutions to the problems of trading.
Who should invest in a hedge fund?
Hedge Fund investing is not suitable for everyone. You should already have an established
financial plan, have expenses that are less than your income, have an emergency cash fund in a cash, or near-cash account,
have other long term investments such as mutual funds, stock, and bonds, and have surplus cash that needs to be allocated
to an alternative investment for diversification purposes. Regulations also require that you must have at least $1.5
million in net worth if you are a US resident. Institutional investors will have separate requirements outside
the scope of this FAQ and are encouraged to contact us directly to discuss the suitability of hedge fund investing.
Why can't I invest if I have less that $1 million net worth?
US regulations dictate that individuals wishing to invest in hedge funds must be 'qualified'.
This means they must be prepared to invest at least $750,000 or have a net worth of $1 million. These regulations are
intended to protect so-called 'unsophisticated' investors from losing money, or having investments that are unsuitable, or
that they cannot understand. The rising popularity of funds of hedge funds with much lower investment minimums and net
worth requirements are evidence that these rules are overly restrictive, and that the general public would like to have access
to these kinds of investments. If the demand for access to hedge funds for smaller investors continues to grow, these
regulations may be relaxed in the future.
How is PMKing Trading different from other financial companies?
We have specialized in creating automated proprietary trading systems based
on our experience of the fundamental ways markets work. This coupled with a disciplined approach to trading system implementation
and rigorous testing and monitoring of the whole trading system development process, allows us to be confident that our system
will produce robust results on an annual basis. The returns we generate are unique in that they are dependent only on
our skill as trading system developers and implementers and not general market conditions. Since our proprietary suite
of programs cannot be duplicated, our returns will not be correlated with any other hedge fund or investment type. We
have also striven to maximize profits within a framework of managed risk and live up to our trademark of 'Predictable Performance
Unlike some funds that specialize in markets or instruments traded, we have diversified the markets
our systems trade to include US Large Cap equities, US Financial Futures, and Foreign Exchange. This means that our
results are not dependent on the performance of any single market.
Rigid risk control is also part of our systems design, which aims to smooth the volatility of
returns rather than go for maximum return, but at the risk of very high volatility. Our systems do not use excessive
leverage often associated with hedge funds (especially in FX trading where typical leverage can be 100:1), and each trade
generally only risks a very small percentage of available capital.
Is your trading 100% mechanical, or are there any discretionary parts?
Our trading systems are mostly mechanical, although there is always human-intervention to actually
put the trade on. Trade management of a position once it is on is always 100% automated. Some parts of the system
are discretionary, mainly due to the fact that sometimes data is obviously bad, or hard to quantify mechanically. For
example, we will not put on a position ahead of a scheduled meeting that will significantly increase the volatility of an equity
(e.g. an earnings announcement). These kinds of events are not easy to classify and automate, so there is still discretion
in when to avoid taking an entry signal. We never use discretion to put on a position without a valid signal from one
of our systems.
This approach is what gives us our trading advantage and gives us the consistent implementation which
leads to predictable profits.
What are the flags in the header of this website for?
What trading books, products, courses and hardware do you recommend?