FX FX MANAGERS
spikes of that magnitude are not normal in rational, properly functioning markets.
JW Do you use Emerging Markets
currencies? And do you think individual traders should use them,
considering
have to worry so much about l iq u id it y issues?
SH C u rr e n tl y
we don’t trade EM currencies though, of course, we follow them. We think that over time they have the potential to be additive.
that
JW Do you think every
strateg y loses its accuracy sooner or later, or do you believe in long lasting market rules? Have you ever found a strategy that became profitable again after a long negative phase ?
SH Our
experience tells us
that as market and currency characteristics change the accuracy of any strategy relies on its ability
56 FX TRADER MAGAZINE April - June 2012
optimization? If so, how do you make sure it doesn’t create curve fitting and confirms robustness of the model?
SH Back testing has its uses, but
in an unregulated market such as Spot FX historical data can be misleading and will tell you very little about liquidity particularly
in fast, gapping to be adaptive. markets. As a consequence we they don’t
There will always be times when conditions
are difficult and
reducing risk in these periods is as important as running risk when the environment is favourable.
JW Do
you use any form of
have never used it, deciding instead to take the long view by building a live track record that shows how the program has evolved and reacted to changing conditions.
JW Do you favor any particular time frame in your strategies ? What is your average trade d u r a t
i o n
and trading frequency?
program
SH The Arktos is
short term in nature with i nt e nt i o n a l l y low trading frequency.
JW What should
an inexperienced trader watch
when choosing a time frame?
SH A strategy must fit the chosen time frame.
In our experience
new traders tend to opt for very short-term timeframes, which, in
most cases, lead to over
trading and potential mental and capital exhaustion. Your chosen time frame will not always offer up successful trades and one must recognise this fact
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