FX MANAGERS FX
for all currencies traded. Each strategy takes advantage of trends that occur in different time frames, and works totally independently of the other strategies. What is considered trend-following in one time frame is counter-trend in another timeframe. Te first strategy exploits short-term
price/time/volatility relationships. Te strategy looks for certain short- term price/volatility relationships to enter the market. Specifically, it takes advantage of low market volatility points where one can enter with a high reward potential (a tight stop with low likelihood of being stopped out due to market noise). Te second strategy looks to capture market movements that constitute a short-term trend. Te third strategy exploits counter-trend opportunities within longer-term trends. Te fourth strategy selectively captures risk premium from the
markets and is only employed during risk-seeking environments, which tend to exhibit lower or depressed volatility over extended periods.
JW: How do you think your
performance has been over time? What market conditions could have a positive or negative impact on it? MM: Since our inception, Conquest
Macro FX has delivered on its mandate to outperform in high volatility environments. Te program has proven to be a great diversifier for almost all portfolios. Short-term trends with consolidation
and continuation periods are most beneficial to our systems. We expect to particularly outperform the competition when long-term trends reverse, as our shorter-term systems are quick to enter trades against long-term trends. We will experience difficulties in
periods where a directionless market has high volatility on a daily basis.
JW: Do you use less mature
currencies? MM: We do not. Liquidity is the
first and most important criterion in selecting markets for the portfolio.
JW: Do you think some of the less
mature currency pairs are viable for individual traders, who don’t have to worry as much about huge liquidity? Would you suggest to trade them? MM: Each trading strategy is suited
to trading a different set of markets. Our strategy is much more short-term and thus demands that the instruments traded are extremely liquid. Te inability to execute a trade without significant slippage would have a material effect on our performance. If a strategy has a trade horizon of 1-2 years,
FX TRADER MAGAZINE July - September 2010 49
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