Please login to use video chat.Login
Author: AliCatCapital , Last Modified, 2020-10-31 04:30:40 Category: finance Keywords: MEASURING-ALPHA-a-Hedge-Fund-Model-Oscillators
363 views 45
How to measure Alpha when allocating capital to a basket of stocks in a position based trading portfolio.
The use of market oscillation is an effective way to time entering and exiting your positions.The chart above helps us to measure the position of our portfolio relative to the broader market.
In my trading I use this only as a guide, but on an individual stock level, I used the relative position to make trade execution decisions.
This is an incredibly effective way to be disciplined. It is a rule based approach that cannot be overridden by human judgement. The use of these oscillators is therefore a signalling mechanism. Signals in the hedge fund managers models can be based on charts or underlying math built into a Boolean string function, Essentially the market at any point in time can literally be read in English, pre programmed based on the numbers, the chart simply acts a a useful data visualisation of the math.
Of course to rely on the chart and not have an understanding of the intrinsic math is dangerous. The hedge fund managers experience and overall appreciation of the Macro Economic environment is as important as the short term market signal.
This is not about reading charts to understand the market. This is about constructing charts to visualise your mathThis approach presupposes that the hedge fund manager has analysed the numbers and determined the rule he or she believes is driving the share price movement, then building a model with charts to better visualise the math.
It is quantitative modelling as apposed to Chartism or Technical Analysis. But there are merits and risks in both of course, but it worth mentioning the distinction.AliCatCapital
Keywords:MEASURING-ALPHA-a-Hedge-Fund-Model-OscillatorsBlog title: MEASURING ALPHA a Hedge Fund Model Oscillators
Article By AliCatCapital:2018-10-27 »
Article By AliCatCapital:2017-05-08 »
Article By AliCatCapital:2017-10-23 »
If you have enjoyed reading this article, and wish to support the writer you can make a payment from as little as £1. All contributions welcome.View Product
Epic 64-Player Multiplayer Battles - Squad up with your friends and join in the most epic multiplayer battles in FPS history with up to 64 players. Fight as infantry, lead horse charges or take control of amazing vehicles on land, air and sea, from tanks and biplanes to the gigantic Behemoths.Read more »