Our Interpretation

Our Interpretation

At Finesse, we know that successfully investing in today’s market based on fundamental analysis can take years to make money. We believe that making money within a specific time-frame is very important. We also understand that money can be made if one is able to identify the movement of the market. However, one can only be accurate to an extent. A person cannot be 100% sure of where the market is headed even for the next few seconds. But we all have studied probability and we all understand that probability of getting a head when a coin is tossed is ½. So when we toss the coin and get head – can we say that the probability of getting head is 100%. We all know the answer is no but the result says 100% yes. The catch is that the sample size is not good enough. If we would probably toss a fair coin in a fair manner for more number of times say 100 times or 200 times we may get close to 50:50. (This number of times can be tested by doing various tests). This is what needs to be understood. We as algorithm traders don’t believe all our trades will be right but what we understand is that when we apply the correct logic it will be able to identify the market movement correctly when we do sufficient amount of trades in the market or when we trade for sufficient amount of time in the market.

 

While doing all this it is very important to note that :

 

MARKET S CAN BE IRRATIONAL MORE THAN ONE CAN BE SOLVENT.

 

This is a golden commandment for us. This tells us that risk needs to be managed really well. We thereby make sure that the leverage we take on the client’s portfolio is limited.

 

the contract has a prefixed date of expiry. One need to understand that in derivatives one person s loss is another person s gain and vice versa. So if the entire world said that they lost money in 2008 crisis then it is not possible. There may be 5% or may be higher or lesser than that who would have made money. This  teaches us one important thing –

 

MONEY CAN BE MADE IN ANY MARKET CONDITION .

 

Provided one is doing the right thing. Now for doing the right thing one needs to work like a robot and more often than not a man displays his speculation tendencies and ends up making losses. One needs to be extremely committed and principled in order to make returns in market. Also one who enjoys trading in the markets seldom makes returns. We believe everything is right if the balance sheet is green and everything is wrong if the balance sheet is red. One might have a great logic but might make mistake in managing risk or vice versa. It is well said that – 99% of the people may have the right strategy but they run out of money. Only 1% make money because they manage their risk well.


We at Finesse run a lot of algorithms and our strength lies in managing the risk well. We know that a logic might not work in certain market conditions and also that a particular market condition doesn’t stand for a long time. So we make sure that we keep enough liquidity in the clients portfolio that we are able to meet the losses smoothly. Our success lies in making returns in a defined time frame that is usually 18 to 24 months.

 

Email-id : info@finesseadvisory.in

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