LFG takes the view that the world’s largest commodity, currency, interest rate, and stock markets are the subjects of a 24 hour a day, 5 day a week auction. It is an auction process in which all participants have access to all applicable economic market data relevant in establishing a price for the underlying market. We, therefore, believe that the current market price reflects the sum total effect of economic fundamentals relevant for that particular market for that particular moment in time.
Our objective then, is to design quantitative rule based models to capture returns from the various markets that we trade by researching past and current price behavior. These trading models, or strategies, allow us to remove emotion, fear, and greed from our investment process. The models also allow us to be consistent and efficient in our response to changing market conditions.
The process to create a trading model begins with an observation from one of our team members. The observation is discussed and debated internally to form an idea. The idea is constructed and supported by “rules” related to trade selection criteria, position sizing, and risk management. Only then is the idea introduced to an applicable database. An intense effort is made to avoid “fitting” the idea to the data it faces. If an idea survives this process, shows a low correlation to our existing strategies, and exhibits the ability to stand alone as a trading strategy then it will be added to our portfolio as a trading model.
Colleyville, Texas
1117 Glade Road, Suite 120
Colleyville, TX 76034
(O) 214.369.0500
(F) 214.580.1536
Chicago, Illinois
53 W Jackson, #835
Chicago, IL, 60604
(O) 312.212.1735
(F) 312.212.1718
