Review
After 14 days of trading, the model had performed beyond expectations returning a profit of 22% within 10 days. However based on the strong criteria to return 100% in 30 days with low risk the model began to stress and failed to produce continuous results with a loss of 20% for a number of reasons as follows;
1. Market prices appear to be extremely unfounded perhaps due to the massive printing of money in the trillions of dollars, economic uncertainty and financial chaos.
2. A system needs to be developed to compliment the hedge recommended by the model which is current done on a per trader basis to suit their own risk criteria.
However in terms of the challenge all positions were opened together and closed together, profit taking opportunities were lost and stop losses could have been better prevented while unsupervised, so automation will be required.
3. Additional tools are required to measure price distortion perhaps against other basket of assets and on a more granular level i.e. intraday as forecasts are currently predicted on a daily basis.
On this basis the challenge will end here and a more detailed analysis will be published in the near future. New tools will be developed and tested to compliment the model at such time a new challenge will be waged.
* Of course this challenge was designed to put the model through extreme stress it did well and will do better with automation.
** I am currently developing a web system that will assist traders of all abilities which will be launched latest 30th of April 2009 at
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