Prime Direction Limited

Company Description

INTRODUCTION Prime Directionis a developer of low risk, mediumto high yield trading systems designed to be applicable acrossmultiple asset classes. Based on unique strategies, PrimeDirectionsmodels deliver consistent returns throughvarying market conditions with minimal drawdown incidence.   MISSION To develop effective trading strategies for the Forex market andother key asset classes,achieving            scaled deployment into the market in collaboration with expertstrategic partners over the long term.   OBJECTIVES Prime Directionsobjective is to provide investmentmanagers with trading systems that deliver low risk, low stressperformance profiles over the long term, with the rigorousprotection of equity at the center of the companys philosophy andsystem design. Through the application of effective strategies andmodeling knowledge across a variety of financial instruments,Prime Directionseeks to combine its proprietarystrategies with market scope and liquidity in order to position asa leading provider of investment grade trading solutions.        DESIGNETHOS A significant majority of all financial instrument trades in Europeand the USA are now executed byalgorithmic trading models or Black Boxes. While some modelsattempt to react to news and events in the financial world mostmodels look at historic data to determine patterns that may beindicative of future market direction. These models make use of a suite of technical indicator formulae toexamine price momentum, trend direction and a host of otherextrapolated information with a view to placing a trade based on aset of rules. At Prime DirectionPrime Direction Limited have moved beyond the moretraditional techniques driven by the following flaws in thesewidely held views. 1. Market prices do not follow statistically normal patterns. Thisis a key error in traditional technical analysis formulae. Insteadthere is much evidence of fat tails in the distribution curves ofmarkets. This tells us that extreme moves can be expected to occurmore often than would be the case with a normal probabilitydistribution. 2. The majority of technical analysis techniques suffer fromfailures relating to the tradeoff between lagging entry signals andtoo many false entry signals. By using traditional data smoothingtechniques false entries can be reduced but this normallyintroduces a lag which means that some if not all of the tradespotential profit can go unrealized. In the extreme cases the entrycomes so late that the entered trade can be in entirely the wrongdirection. This is particularly true in range bound cyclic marketconditions. 3. Markets are dynamic ‐ the constant changing currents in thefinancial markets cannot be adequately analyzed by a set of staticrules. Performance may be on target in trending or range boundcyclic markets but then catastrophic failures may occur when marketconditions change. Prime Directionhas taken a multi‐level view toaddressing the above issues. Extreme market moves                       inrecent years have highlighted that financial trading, while havingthe potential to be very profitable, carries with it thepossibility of portfolio damaging losses even in the domain ofrelatively stable mainstream instruments. PrimeDirection,while endeavoring to produce exceptionalreturns, starts by putting in place tight controls on downsiderisk. Downside exit pointsare clearly defined atthe time of entry and overall market conditions are constantlyanalyzed in order to effectively navigate the effects of macro events.Leverage is employed within strict risk tolerance parameters.During certain market conditions and events Prime Directionssystems do not trade at all.        FX24 FOREXENGINE FX24 is Prime Directions flagshiptrading strategy, developed for global foreign exchange markets butalso adaptable across other asset classes. In addition to Prime Directionsfundamental designprinciples, the FX24system includes measures tohelp counter the non‐normal nature of price movement via theutilization of a number of dynamic rules to control trading whenprice action breaches the normal expected bounds of high or lowvolatility. To address the lag and false signal balance issue,FX24uses complex but proven mathematicaltechniques to create filters which are highly responsive whenmarkets move up or down, but only when those moves are backed bythe momentum to make the trade worthwhile. And in realizing that as market dynamics change there is areciprocal need for the algorithmic system to change;FX24is a living algorithm applying a variety ofrules on a trade by trade basis modified to take full advantage ofthe most recent price action for the instrument. Most technical algorithmic systems can be categorized as TrendFollowing or Momentum Driven. Dynamic markets move in and out ofthese phases and as such both of these trading system methodologieswill encounter difficulty over the medium to long term. For examplea system that looks at momentum using traditional indicators suchas the Relative Strength Indicator or Bollinger Bands will favorselling as overbought levels are triggered. This will be a gooddecision only if the market is cyclic. However if the market istrending this model will give out many false entry signals. In thiscase a Trending System will give better results. However the sameis true when utilizing a trending methodology in a cyclic market.As most trending systems rely on some form of moving averagebreakout for a trading trigger, by the time a signal is generatedin a cyclic market the trade will almost certainly be in jeopardy.Prime Directions FX24 strategy is tuned toidentify market dynamics as early as possible while at the sametime avoiding the issuance of trade signals when there areconflicts with the perceived underlying market state.   Fundamental to trade management are FX24slearningabilities that enable fast identification of changes in marketconditions on both winning and losing trades, causing exitinstructions to tighten, in this way mitigating equity erosion onbad trades and locking in profits on the upside. Markets are changing a few years ago the FX market, the biggestfinancial marketplace, traded on average about 2 Trillion USD perday now with the advent of High Frequency Trading algorithms andthe greater adoption of the FX market by private and commercialinvestors alike over 5 Trillion USD is traded daily. Thisphenomenon highlights a very important aspect of marketdynamics. To cope with this, it is essential to approach the market with analgorithmic engine that can produce results now but also beresponsive and adaptive to market changes over time. This all needsto be wrapped in the tight management of downside risk to safeguardprofits and minimize portfolio devaluation. At PrimeDirectionwe believe our FX24engine meetsand exceeds these demands, establishing a new benchmark in thisexciting field.    FX24 SYSTEMRESILIENCEThe logic employed in the design of Prime Directions FX24 seriesensures that the system behaves consistently day to day and iscertain to be resilient over the long term. Unlike the majority ofalgorithmic models FX24 is not a strategy that can break down overtime. This break down in system fidelity usually occurs due toexcessive back testing and the resultant curve fitting that is theproduct of too much historic analysis and tweaking.FX24 on the other hand is based entirely on real time marketconditions combined with applied AI capabilities that allow for theconstant updating of signal strength and duration, and therecommended actions that result from this intelligence. FX24operates on the basis that all future data is unknown and focuseson what is happening in the market at the present time when issuingtrade instructions. Instead of the usual back test approach,testing throughout the development process was carried out in realtime, live market conditions. In this way FX24 has developed theability to make useful predictions of upcoming price action and isable to recommend a winning ratio of profitable trades. As withmany automated systems FX24 is more effective in trending marketsthan in cyclic (range bound) conditions but nevertheless it can anddoes achieve positive absolute returns in both circumstances.   FURTHERSTRATEGIES Prime Directionoperates an active developmentprogram engaged in the production of market beating strategiesacross a wide range of instruments. This program ensures regularadditions to Prime Directions portfolio of trading systems,enabling an increase in opportunities for institutions andinvestors via a diversified stable of top performingstrategies. In addition to FOREX, Prime Directionis currentlydeveloping strategies for use within trading engines operatingacross a variety of further asset classes including equities,indices, metals and energy. The company is also developing a strategy for the pensions market,CERTA, which has demonstrated market beatingperformance over the period 2003‐2016. Average return for thisperiod is in excess of 10% per annum after fees with only onelosing year (2008, where performance was significantly better thannearest competitors). CERTA trades only high volume, low riskinstruments.        HIGHLIGHTSPRIMARY TRADING STRATEGYDEVELOPED FOR THE WORLDS LARGEST MARKETMEDIUM TO HIGH YIELD, LOWRISK, SCALABLE STRATEGIESSPECIALIZED IN GLOBAL FOREIGNEXCHANGE MARKETSFIRST DEPLOYMENTS OFFX24 SERIES WITH INITIAL CLIENTSUNDERWAYINITIAL CLIENTS TOGETHERCONTROL IN EXCESS OF $4 BILLION AUMPENSIONS SECTOR STRATEGYCERTA SHOWING MARKET LEADING RETURNS IN EXCESS OF10% P.A.BOARD LEVEL DISCUSSIONS WITHLEADING PENSION FUND MANAGER WITH $90 BILLION AUMEARLY EQUITY INTEREST FROMLARGE NYC BASED INVESTMENT GROUPPROJECTED GROWTH TO $100M+VALUATION BY END 2020   ENTIRE PROJECT PERSONALLYFUNDED BY FOUNDERS TO DATECHALLENGING HIGH RISK, HIGHCOST INITIAL DEVELOPMENT STAGE COMPLETECOMPANY IS UNENCUMBERED ANDDEBT FREEPRIMARY STRATEGY IS RECESSIONPROOF, UNCORRELATED TO OVERALL ECONOMY                STRATEGICADVANTAGES Above all Prime Directionoperates a culture ofrisk mitigation at all levels of the design, infrastructure andtrading implementation processes. This goes beyond the usualmeasures generally employed in existing algorithms, permeating thecore design architecture and continuing through to advanced trademanagement mechanisms and catastrophic market event safeguards. Theability to combine the stringent control of risk with consistentreturns is the cornerstone of PrimeDirectionsstrategic advantage in the sector. Prime Directionsfocused and specialized teamdesign only custom built solutions. In doing so, the team exercisestotal control over the architecture and behavior of its strategiesand the way in which successful models integrate into the technicalinfrastructure. Prime Directionsuse of bespoke modeling techniquesallows for complex trading strategies to be created, tested andimplemented rapidly and efficiently. This combined with a compactand close knit team allows for an agility of approach that enablesvery efficient development of bespoke solutions for itsclients. Prime Directionscustomization of tradingstrategies is not static; strategies are continuously andsystematically evolved in order to instill ever greater learningcapabilities, enabling the ongoing requirement of controlling riskwhile seeking return optimization. Prime Directionstrading engines constantly learnand update, remaining current in the agile identification ofdiffering market conditions, thus delivering consistent tradingsignal hit rates. This ability to consistently utilize input datain order to successfully evolve and perform through varying marketconditions is a key differentiator. Prime Directionsstrategies employ logic that canbe applied to a variety of asset classes and markets. Thisrepresents a key advantage over systems that are too heavily basedon a specific instruments historic data.    MARKETAPPLICATIONS Prime Directionsstrategies are applicable to avariety of investment environments including Hedge Funds, Fund ofFunds, Banks, Institutions, Pension Funds, Sovereign Funds, HNWIsand Family Offices. The company is considering a variety ofdeployment methods for its strategies contingent upon regulatoryenvironment and appropriate commercial arrangements.    TEAMPrime Direction currentlyconsists of the two founders, David Curd (CEO) and David Over(CMO)The founders benefit from abroad based background in the Media, Marketing, Commodities, Energyand Financial Markets.They have been engaged withinthe financial trading sector for the last 10 years and specificallywith the research and development of the companys currentstrategies over the past 3 years. This, along with the subsequentengagement with asset managers that bringing to market the companysstrategies has entailed, has provided a deep understanding of theconceptual, design, infrastructure, administration and commercialaspects of the sector.David Curd is the drivingforce behind strategy design and development, establishing atrusted team of algorithmic modeling and programming specialistsduring the initial development phase. The key members of this teamwill be further engaged by the company to assist in the ongoingdevelopment and implementation of the companys strategies. David isalso responsible for system infrastructure, risk management andredundancy provisions. He is a highly driven perfectionist andexpert administrator.David Over is responsible forall aspects of marketing the companys strategies to the investmentand asset management communities. He has to date been key inrecruiting the companys initial clients and is working with a widenetwork of further potential partners to add to the companys rostermoving forward. David also handles the interface with brokerageservice providers and ensuring regulatory environment requirementsand back office functions are correctly configured. He is peoplefocused, a talented networker and critical relationshipmanager.Although the team requiredfor this type of business is not particularly large the company hasa wealth of proven talent available to it in order to ensure thefulfilment of its business objectives moving forward.             SUMMARY Effective algorithmic trading systems represent a significantopportunity for market participants to gain advantage over theircompetitors. Truly robust systems are, however, few and far betweenand are often unavailable to many parts of the financial andinvesting community. Best of class systems can become buried withinthe larger framework of their creators operations with accessrestricted to just a few insider interests. PrimeDirectionis unusual in providing direct access forInvestment Managers to strategies that combine a genuine andrealistic potential for market beating returns with low downsiderisk. Prime Directionsre‐evaluation of the algorithmiclandscape has resulted in the creation of custom strategies thatutilize entirely new methodology, creating the potential to overdeliver on key performance metrics. Our focused, specialized teamhave proven that designing robust, risk averse algorithmic tradingsystems that are capable of significantly out‐performing themarket, is possible and can be achieved. Prime Directionis entering the sector with tradingengines that possess true learning capabilities and incorporate theability to evolve and identify changing market conditions swiftlyand with a high degree of accuracy. This results in strategies thatare managed efficiently and profitably and that, most importantly,protect investor equity throughout the process. Contact David Over CMO for more details +44 7951 [email protected]