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eFXSyseFXSysTMTM
Solution OverviewSolution Overview
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 2
First Some DefinitionsFirst Some Definitions
Our Online Help Files contain all detailed definitions that we use, please refer
to this. In particular check out;
Modality: Different Market Characters, e.g., Trend, Range, Cyclical/Secular Bull or
Bear, etc.
Forecast Methods: Different techniques to predict prices, e.g., Technical Analysis,
Neural Network, Fundamentals, etc.
Forecast Horizons: The multi-step ahead time frame of a forecast,
Trades are Spot Transactions with three event classes (see figure next page);
“Entry Buy or Sells” are start conditions of a trade
“Exit Buy or Sells” are end conditions of a trade
“Hold” are trades in progress
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 3
Entry Buy
E2Exit Buy
Hold
Long
E3
E1
Entry Sell
E4 Exit Buy
Hold
Short
Trade Transaction Flow “Events”Trade Transaction Flow “Events”
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 4
Using eFXSysUsing eFXSysTMTM
- Part 1- Part 1
This is a simple to use system once you have mastered a few screens
The recommended strategy for trading with the system is called
“Quantum Economics”, this is a technique using;
multi-agent game theory
non-linear financial time series forecasting using neural networks
and other proprietary technology in the field of Artificial Intelligence.
The mathematics and process flow behind the system is sophisticated
and complex, but you do not need to know this to be able to use the
system.
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 5
Using eFXSysUsing eFXSysTMTM
- Part 2- Part 2
Fundamentally when you see multiple “trade recommendations” for a
particular currency pair all “voting” for a short or long position then we
have “evidence” of an imminent movement.
This evidence can be used to time your trade
The following slides will take us through the background to this strategy
and we will finish by showing some actual examples
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 6
eFXSyseFXSysTMTM
ScreenshotsScreenshots
The following pages describe the main pages common in
both Lite & PRO versions, some points to note.
These screenshots are of the PRO product, the Lite Product has reduced
functions for its lower cost, e.g;
Newswire feeds are not included
Limited number of screens available
Limited to one currency pair per subscription
Screenshots are in English you can toggle to other languages at log on
It’s good to have a screen resolution that is high density, e.g., minimum
1024x768 or higher
For further help and glossary of terms used please refer to online help system.
You can upgrade from Lite to PRO on attractive terms!
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 7
Trade InsightTrade Insight
This page shows you the summary of the simulated active trades (order
flow) currently in the system.
The Trade Insight “Meter” gives a gauge of the sell or buy “strength” of the
simulated order flow
Trade Ticker of breaking news is displayed (in eFXSysTM
PRO)
Economic Calendar Information is available for scheduled announcements
Current Price Information Table with actual prices & highs/lows are presented
Intraday Actual Graphs for the Currency Pairs are charted
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 8
TRADE INSIGHT PAGETRADE INSIGHT PAGE
Chart for Intraday Actual
Prices for Currency Pair
Trade Insight Meter (Red =
Sell, Green = Buy) based on
Order Flow Measurements
News Ticker for Breaking News and
Economic Calendar Button
Current Prices, including Last,
Previous, Change, High, Low
and Volatility
Instrument Simulated Trade /
Order Flow Insight. Shows
active Entry & Exit Position, as
well as Open Holding Positions
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 9
Alert CompositeAlert Composite
This page shows you the simulated active trades currently in the system.
Trade Agent “Status”
Short Trades are Trades in progress entered with a Sell
Long Trades are Trades in progress entered with a Buy
Hold Trades are either Long or Short trades in progress (active), waiting
for an optimum exit condition (either Buy or Sell)
“Worldviews” is a term we use to describe a single row (active trade) because
each trade has a different;
instrument, e.g., EURUSD
time horizon, e.g., 1 hr
forecast method e.g., TA
modality, e.g., Cyclical Bear
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 10
ALERT COMPOSITE PAGEALERT COMPOSITE PAGE
Note the "News Alert" for
EURUSD
Note the Active Alert for an
Entry Buy for USDJPY 1hr
SDFN Trend (Entered @
109.175, and current time
109.205). The USDJPY is an
active link that takes you to
the details of this specific
“Worldview” in Alert Panel
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 11
Trade DashboardTrade Dashboard
Clicking on the active link “Instrument” in Alert Composite takes you to
Trade Dashboard (next screenshot)
This page shows you the individual Worldviews in our “Trade
Dashboard”.
You can see following functions;
Actual Data showing current, last day price, highs and lows etc.
Trade Tracker showing win rates for past 100 simulated trades per time
horizon
Forecast (shows 15 intervals of history as well as 15 predicted intervals
forward). In this frame is also statistics for the quality of the forecast
based on past 15 forecasts)
Trade Meters – giving a simple display of the buy or sell recommendation
per horizon
In PRO there is also a Newswire section this is not shown in Lite version
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 12
TRADE DASHBOARDTRADE DASHBOARD
Both the Trade Tracker and
Trade Meters indicate Trade
(Longs) are now active in 1 hr
and 2 hr "Horizons"
You can see the CDC
and MAPE (Delta)
Score here for the 2hr
forecast. This is why
the forecast is in this
case considered
"good"
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 13
Dashboard – Chart OptionsDashboard – Chart Options
In the Trade Dashboard you can see many different charts,
including;
Actuals; Intraday, Weekly, Monthly, Yearly data
Technical Analysis (refer to TA text books for detailed explanation of
use), these are selectable at different time horizons;
Bollinger Bands showing Moving Average and Upper and Lower
Bands at 2 Standard Deviations from MA.
Moving Average Convergence and Divergence, showing Signal
and MA1 and 2 averages, signal crossover zero level indicates
change in market direction.
Relative Strength Indicator showing over and under sold/bought
conditions
Stochastic Oscillator showing slow and fast signals, crossover
indicate market direction change
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 14
DASHBOARD - ACTUALSDASHBOARD - ACTUALS
Actual Tables
are recorded for
past 24 hours,
Week, Month
and Year values
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 15
DASHBOARD – BOLLINGER BANDDASHBOARD – BOLLINGER BAND
Bollinger Bands
are based on
past 1,2,4,8,16
Hour Intervals,
with upper &
lower BB based
on 2 SD from MA
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 16
DASHBOARD - MACDDASHBOARD - MACD
MACD is based
on 1,2,4,8,16 hr
intervals
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 17
DASHBOARD - RSIDASHBOARD - RSI
Relative Strength
Indicator is based
on past
4,8,16,32,64 mins
intervals
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 18
DASHBOARD - STOCHASTICDASHBOARD - STOCHASTIC
Stochastic
Oscillators are
based on
4,8,16,32,64 mins
intervals
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 19
Trade Tracker CompositeTrade Tracker Composite
This page shows you the simulated active trade results (Trade Trackers) for
the past 50, 500 and 5000 trades.
These screens help users identify “hot spots” of specific Worldview winning
history/track records, displaying;
Win% rates (the number of wins out of the past number of simulated trades that
have either a win or loss, i.e., null trades are discarded)
Avg Profit%. Gives a % of the average Profit made over the number of actual
wins made in the sample.
Avg Loss%. Gives a % of the average Loss made over the number of actual
losses made in the sample.
Note the results are the sum for all time horizons for that instrument, in PRO you
can go to the Trade Tracker sub screen for individual time horizons (not
available in Lite).
User can select which Worldview he wishes to checkout in Trade Tracker
Composite by;
instrument, e.g., EURUSD (PRO has 3 per AFD, Lite is restricted to 1)
forecast method e.g., TA
modality, e.g., Cyclical Bear
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 20
TRADE TRACKER COMPOSITETRADE TRACKER COMPOSITE
Note this screenshot of Trade Tracker Composite. This display
shows the win% and profit/loss% for the currency pairs past 50,
500 & 5000 simulated trades. User can manually “hunt” for
winning modalities and forecast methods. Clicking on the
Instrument takes you to see results within each Forecast Horizon
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 21
““Quantum Economics”Quantum Economics”
A Trading Strategy using eFXSysA Trading Strategy using eFXSysTMTM
- Part 1- Part 1
This is a simple to use technique for seeing the general
direction of a FX instrument, and is very useful in seeing
imminent large movement, for short or long opportunity.
1. Preparation: Do your fundamental and technical analysis to select an
instrument you wish to trade and the direction (short or long)
1. This is a personal judgment you should first make before using the
system, to help backup your choice and make a optimum “timing of
trade” judgment
2. Please note: In Lite version you have only 1 instrument, PRO has many
more to select from.
2. Open: Trade Insight Page to see overview of Order Flow and await a
strong sell or buy signal in your selected instrument.
3. Open: Alert Composite Page (see next screenshot) to see detailed
Worldview picture
4. Check: if majority of Worldviews are either short or long (in this case the
screenshot shows a lot of shorts for USDJPY)
5. Decide: if significant number are in same direction as your personal
judgment (mentioned in 1 above) consider trading in that direction.
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 22
““QUANTUM ECONOMICS”QUANTUM ECONOMICS”
Note the situation with many “Worldviews (i.e., modalities , forecast types and horizons) all "voting"
at the same time in the same direction (here they are calling all for a “short”).
This is indicative of a feature Sigma Delphi Ltd calls a "Quantum Economic" phenomena, similar to
what some Physicists interpret how certain kind of effects are observed in nature. The so called
"Many Worlds Hypothesis".
In this specific example no less than 12 “Worldviews” all agreed to short the USDJPY @ 09:37 am @ a
price of 109.285. Also there where no dissenting opinion from active trades, i.e., no “longs” present.
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 23
““Quantum Economics”Quantum Economics”
A Trading Strategy using eFXSysA Trading Strategy using eFXSysTMTM
- Part 2- Part 2
Before you trade you may wish to do some double
checking and validation.
This is a good practice to do beforehand, because
timing is crucial.
However boldly rushing to trade may be reckless.
It’s an issue of risk.
1. Double check: the individual Worldviews to see if the specific
simulation is giving recommendations/forecast that are credible in
your personal opinion, i.e., looking for forecast shapes you “trust”
2. Validate: the Trade Tracker Composite performance to see if
specific Worldviews are reliable in your personal opinion, i.e.,
looking for win% greater than 50%
3. Watchout: Be careful of placing your trade near Economic
Calendar Events that you have not factored, these scheduled
announcement can seriously effect your trade.
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 24
““Quantum Economics”Quantum Economics”
A Trading Strategy using eFXSysA Trading Strategy using eFXSysTMTM
- Part 3- Part 3
After placing your trade you need to start
monitoring for optimum exit condition.
Some key points;
1. Trade or hold?: Wait for Profit or Loss Risk Management to be
recommended or manually override to terminate your trade if
balance of shorts to longs move against your position.
2. Alerts: Watch breaking news that might effect your trade (PRO has
advanced features in this respect not available in Lite). This is a
crucial aspect.
HEDGE FUND BUSINESS PLAN
Confidential – Sept 2007 25
SNAPSHOT 4 HOURS LATERSNAPSHOT 4 HOURS LATER
The system recommended holding the position for a considerable time. By this timeframe (some 4 hrs
later than previous screenshot) profit is now 43 pips – a significant trade call.

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eFXSys Solution Overview

  • 2. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 2 First Some DefinitionsFirst Some Definitions Our Online Help Files contain all detailed definitions that we use, please refer to this. In particular check out; Modality: Different Market Characters, e.g., Trend, Range, Cyclical/Secular Bull or Bear, etc. Forecast Methods: Different techniques to predict prices, e.g., Technical Analysis, Neural Network, Fundamentals, etc. Forecast Horizons: The multi-step ahead time frame of a forecast, Trades are Spot Transactions with three event classes (see figure next page); “Entry Buy or Sells” are start conditions of a trade “Exit Buy or Sells” are end conditions of a trade “Hold” are trades in progress
  • 3. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 3 Entry Buy E2Exit Buy Hold Long E3 E1 Entry Sell E4 Exit Buy Hold Short Trade Transaction Flow “Events”Trade Transaction Flow “Events”
  • 4. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 4 Using eFXSysUsing eFXSysTMTM - Part 1- Part 1 This is a simple to use system once you have mastered a few screens The recommended strategy for trading with the system is called “Quantum Economics”, this is a technique using; multi-agent game theory non-linear financial time series forecasting using neural networks and other proprietary technology in the field of Artificial Intelligence. The mathematics and process flow behind the system is sophisticated and complex, but you do not need to know this to be able to use the system.
  • 5. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 5 Using eFXSysUsing eFXSysTMTM - Part 2- Part 2 Fundamentally when you see multiple “trade recommendations” for a particular currency pair all “voting” for a short or long position then we have “evidence” of an imminent movement. This evidence can be used to time your trade The following slides will take us through the background to this strategy and we will finish by showing some actual examples
  • 6. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 6 eFXSyseFXSysTMTM ScreenshotsScreenshots The following pages describe the main pages common in both Lite & PRO versions, some points to note. These screenshots are of the PRO product, the Lite Product has reduced functions for its lower cost, e.g; Newswire feeds are not included Limited number of screens available Limited to one currency pair per subscription Screenshots are in English you can toggle to other languages at log on It’s good to have a screen resolution that is high density, e.g., minimum 1024x768 or higher For further help and glossary of terms used please refer to online help system. You can upgrade from Lite to PRO on attractive terms!
  • 7. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 7 Trade InsightTrade Insight This page shows you the summary of the simulated active trades (order flow) currently in the system. The Trade Insight “Meter” gives a gauge of the sell or buy “strength” of the simulated order flow Trade Ticker of breaking news is displayed (in eFXSysTM PRO) Economic Calendar Information is available for scheduled announcements Current Price Information Table with actual prices & highs/lows are presented Intraday Actual Graphs for the Currency Pairs are charted
  • 8. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 8 TRADE INSIGHT PAGETRADE INSIGHT PAGE Chart for Intraday Actual Prices for Currency Pair Trade Insight Meter (Red = Sell, Green = Buy) based on Order Flow Measurements News Ticker for Breaking News and Economic Calendar Button Current Prices, including Last, Previous, Change, High, Low and Volatility Instrument Simulated Trade / Order Flow Insight. Shows active Entry & Exit Position, as well as Open Holding Positions
  • 9. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 9 Alert CompositeAlert Composite This page shows you the simulated active trades currently in the system. Trade Agent “Status” Short Trades are Trades in progress entered with a Sell Long Trades are Trades in progress entered with a Buy Hold Trades are either Long or Short trades in progress (active), waiting for an optimum exit condition (either Buy or Sell) “Worldviews” is a term we use to describe a single row (active trade) because each trade has a different; instrument, e.g., EURUSD time horizon, e.g., 1 hr forecast method e.g., TA modality, e.g., Cyclical Bear
  • 10. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 10 ALERT COMPOSITE PAGEALERT COMPOSITE PAGE Note the "News Alert" for EURUSD Note the Active Alert for an Entry Buy for USDJPY 1hr SDFN Trend (Entered @ 109.175, and current time 109.205). The USDJPY is an active link that takes you to the details of this specific “Worldview” in Alert Panel
  • 11. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 11 Trade DashboardTrade Dashboard Clicking on the active link “Instrument” in Alert Composite takes you to Trade Dashboard (next screenshot) This page shows you the individual Worldviews in our “Trade Dashboard”. You can see following functions; Actual Data showing current, last day price, highs and lows etc. Trade Tracker showing win rates for past 100 simulated trades per time horizon Forecast (shows 15 intervals of history as well as 15 predicted intervals forward). In this frame is also statistics for the quality of the forecast based on past 15 forecasts) Trade Meters – giving a simple display of the buy or sell recommendation per horizon In PRO there is also a Newswire section this is not shown in Lite version
  • 12. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 12 TRADE DASHBOARDTRADE DASHBOARD Both the Trade Tracker and Trade Meters indicate Trade (Longs) are now active in 1 hr and 2 hr "Horizons" You can see the CDC and MAPE (Delta) Score here for the 2hr forecast. This is why the forecast is in this case considered "good"
  • 13. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 13 Dashboard – Chart OptionsDashboard – Chart Options In the Trade Dashboard you can see many different charts, including; Actuals; Intraday, Weekly, Monthly, Yearly data Technical Analysis (refer to TA text books for detailed explanation of use), these are selectable at different time horizons; Bollinger Bands showing Moving Average and Upper and Lower Bands at 2 Standard Deviations from MA. Moving Average Convergence and Divergence, showing Signal and MA1 and 2 averages, signal crossover zero level indicates change in market direction. Relative Strength Indicator showing over and under sold/bought conditions Stochastic Oscillator showing slow and fast signals, crossover indicate market direction change
  • 14. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 14 DASHBOARD - ACTUALSDASHBOARD - ACTUALS Actual Tables are recorded for past 24 hours, Week, Month and Year values
  • 15. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 15 DASHBOARD – BOLLINGER BANDDASHBOARD – BOLLINGER BAND Bollinger Bands are based on past 1,2,4,8,16 Hour Intervals, with upper & lower BB based on 2 SD from MA
  • 16. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 16 DASHBOARD - MACDDASHBOARD - MACD MACD is based on 1,2,4,8,16 hr intervals
  • 17. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 17 DASHBOARD - RSIDASHBOARD - RSI Relative Strength Indicator is based on past 4,8,16,32,64 mins intervals
  • 18. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 18 DASHBOARD - STOCHASTICDASHBOARD - STOCHASTIC Stochastic Oscillators are based on 4,8,16,32,64 mins intervals
  • 19. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 19 Trade Tracker CompositeTrade Tracker Composite This page shows you the simulated active trade results (Trade Trackers) for the past 50, 500 and 5000 trades. These screens help users identify “hot spots” of specific Worldview winning history/track records, displaying; Win% rates (the number of wins out of the past number of simulated trades that have either a win or loss, i.e., null trades are discarded) Avg Profit%. Gives a % of the average Profit made over the number of actual wins made in the sample. Avg Loss%. Gives a % of the average Loss made over the number of actual losses made in the sample. Note the results are the sum for all time horizons for that instrument, in PRO you can go to the Trade Tracker sub screen for individual time horizons (not available in Lite). User can select which Worldview he wishes to checkout in Trade Tracker Composite by; instrument, e.g., EURUSD (PRO has 3 per AFD, Lite is restricted to 1) forecast method e.g., TA modality, e.g., Cyclical Bear
  • 20. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 20 TRADE TRACKER COMPOSITETRADE TRACKER COMPOSITE Note this screenshot of Trade Tracker Composite. This display shows the win% and profit/loss% for the currency pairs past 50, 500 & 5000 simulated trades. User can manually “hunt” for winning modalities and forecast methods. Clicking on the Instrument takes you to see results within each Forecast Horizon
  • 21. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 21 ““Quantum Economics”Quantum Economics” A Trading Strategy using eFXSysA Trading Strategy using eFXSysTMTM - Part 1- Part 1 This is a simple to use technique for seeing the general direction of a FX instrument, and is very useful in seeing imminent large movement, for short or long opportunity. 1. Preparation: Do your fundamental and technical analysis to select an instrument you wish to trade and the direction (short or long) 1. This is a personal judgment you should first make before using the system, to help backup your choice and make a optimum “timing of trade” judgment 2. Please note: In Lite version you have only 1 instrument, PRO has many more to select from. 2. Open: Trade Insight Page to see overview of Order Flow and await a strong sell or buy signal in your selected instrument. 3. Open: Alert Composite Page (see next screenshot) to see detailed Worldview picture 4. Check: if majority of Worldviews are either short or long (in this case the screenshot shows a lot of shorts for USDJPY) 5. Decide: if significant number are in same direction as your personal judgment (mentioned in 1 above) consider trading in that direction.
  • 22. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 22 ““QUANTUM ECONOMICS”QUANTUM ECONOMICS” Note the situation with many “Worldviews (i.e., modalities , forecast types and horizons) all "voting" at the same time in the same direction (here they are calling all for a “short”). This is indicative of a feature Sigma Delphi Ltd calls a "Quantum Economic" phenomena, similar to what some Physicists interpret how certain kind of effects are observed in nature. The so called "Many Worlds Hypothesis". In this specific example no less than 12 “Worldviews” all agreed to short the USDJPY @ 09:37 am @ a price of 109.285. Also there where no dissenting opinion from active trades, i.e., no “longs” present.
  • 23. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 23 ““Quantum Economics”Quantum Economics” A Trading Strategy using eFXSysA Trading Strategy using eFXSysTMTM - Part 2- Part 2 Before you trade you may wish to do some double checking and validation. This is a good practice to do beforehand, because timing is crucial. However boldly rushing to trade may be reckless. It’s an issue of risk. 1. Double check: the individual Worldviews to see if the specific simulation is giving recommendations/forecast that are credible in your personal opinion, i.e., looking for forecast shapes you “trust” 2. Validate: the Trade Tracker Composite performance to see if specific Worldviews are reliable in your personal opinion, i.e., looking for win% greater than 50% 3. Watchout: Be careful of placing your trade near Economic Calendar Events that you have not factored, these scheduled announcement can seriously effect your trade.
  • 24. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 24 ““Quantum Economics”Quantum Economics” A Trading Strategy using eFXSysA Trading Strategy using eFXSysTMTM - Part 3- Part 3 After placing your trade you need to start monitoring for optimum exit condition. Some key points; 1. Trade or hold?: Wait for Profit or Loss Risk Management to be recommended or manually override to terminate your trade if balance of shorts to longs move against your position. 2. Alerts: Watch breaking news that might effect your trade (PRO has advanced features in this respect not available in Lite). This is a crucial aspect.
  • 25. HEDGE FUND BUSINESS PLAN Confidential – Sept 2007 25 SNAPSHOT 4 HOURS LATERSNAPSHOT 4 HOURS LATER The system recommended holding the position for a considerable time. By this timeframe (some 4 hrs later than previous screenshot) profit is now 43 pips – a significant trade call.