Seneca Invest AG : Procyon Galaxy Trading (P)

Summary

Our Trading Strategy combines sophisticated risk management models, with a high probability market patterns recognition technique. The trader has developed a functionally centralized web-based platform, represents an application for our "two-boss" matrix management organization structure; which represents a solution for team-based discipline trading. We trade the world's most liquid currencies, such as the euro, the Japanese yen, the Swiss franc, the British pound, the Canadian dollar, the Australian, the New Zealand dollar in the over-the-counter market, in addition to the Crude Oil and Gold in the NYMEX market. The system provides us between 3 to maximum 8 tradable signals in a Month. Target 80 trades per year. The trade life span has an average of 72 hours. Target 55% winning percentage (Winning 48 trades from the 80 trades). Target of 1.7% profit per trade, while risking 1% (Reward/Risk = 1.7). Risk 30% of the previous trade profit.

Investment Strategy

Our Trading System represents 40% of our Trading Strategy. The system is Mechanical with the same pattern setup executed repeatedly; it has 3 components: 1- Technical Pattern 2- Behavior Pattern 3- Technical Filter a. Technical Pattern Technical Pattern represents 25% of our Trading Strategy We trade only one simple pattern, this pattern has been developed by our Team, and been traded since 2006. It is a combination of 2 classical patterns; Micro pattern inside a Macro pattern. This pattern is drawn on Daily and 4 hours charts. b. Behavior Pattern Behavior Pattern represents 10% of our Trading Strategy Shake Out, and Proactive; these are the 2 behavior patterns which we have developed, and they serve as a trigger, for our Technical pattern. c. Technical Filter Technical Filter represents 5% of our trading Strategy It is a simple pattern; combines Market Angle, ATR and Fibonacci extensions, serve as a signal filtration.

Risk Management

Risk Management represents 60% of our Trading Strategy We manage two types of risk: Market and Operational Risk. We have developed a Market Risk Management Model, and an Operational Risk Model. We have also built two platforms with sophisticated tools providing real-time risk identifying, assessing, mitigating, controlling, monitoring, and reporting. a. Market Risk Management Model: Our Operational Risk Management Model adopts a Down-Top approach. Risk Management components: Downside Limit, Reward/Risk, Sensitivity Analysis, Scenario Analysis, Correlation Analysis, Monitoring Positions, Leverage Risk, Volatility Risk, Event Risk, Peak to Trough Draw Down Analysis, Stress Testing, and contingency plans. Our Risk Management Model adopts an anti-martingale approach, in managing the pre-trade and intra-trade risk. It is scaling out in the falling markets and averaging up in the rising market. We compound the profit by implementing a developed formula representing a combination between “Compound and Flat ratio”; serving in optimizing the profit and minimizing the risk. ICA has developed Risk Management Platform software, which contains sophisticated tools and calculators serve in determining the optimal risk allocation per trade, optimal leverage, optimal scale out or average up formula, serving in optimizing the Reward/Risk asymmetry. b. Operational Risk Management Model: Our Operational Risk Management Model adopts a Top-Down approach. Risk Management components: Data management, Execution error, employee errors, system error, process tracking, behavior monitoring, performance monitoring, unauthorized activities, business interruption, Key man, Rogue Trader, Infrastructure risk, stress testing, contingency plans. We believe that the operational risk can match or even exceed the market risk. Aside to our in-house Risk Officers, we have strategic “independent risk managers” who serve as a second level of protection, helping in identifying, assessing, mitigating, controlling, and monitoring the risk.