Menu Homepage: An overview of Prudent Trading Systems and our area of expertice.

Development Cycle: An outline of the cycle used in designing, testing, and optimizing trading systems.

Methodology: Company principles, analytic techniques and trading strategies used.

Sample System: A detailed example of a basic trading system.

Services: An outline of services provided by Prudent Trading Systems.

Trading Systems Development Methodology

In our approach to design and development of trading systems we consider money management at least as important as trading rules and when we could not find any commercially available computer program offering an integrated and well designed processing of market and money management rules we decided to make a significant commitment of time and resources to build our own testing and analyzing trading system computer software. As the result of this effort we created a software package which offers flexibility, integration and in depth analysis of trading systems (stocks, futures and options) that cannot be matched by any commercially available software.


Main Features of the Program:
Rapid and well organized development/testing cycle of trading systems
Fully integrated analysis of market rules and money management rules
Instantaneous access to macro and micro view of the particulars of any tested/developed trading system - at any time information on overall performance of the trading system is available as well all details of each simulated transactions.
Portfolio processing of mixed instruments (stocks, futures, options)
 
Rich set of market rules.  Setup, Entry/Exit Rules build with any combination of following:

Classical pattern analysis (All Western patterns and all Japanese Candles sticks patterns)
Trend line analysis including speed/resistance lines and Gann Fan lines
Standard and custom built indicators with divergence analysis
 
Rich set of money management rules including following:
Capital Preservation Rules - variety of trailing stops, measured move, rule of seven, annualized return, etc.
Capital Allocation Rules - equal allocation, index allocation, volatility allocation, "equal risk allocation" - proprietary rules assigning capital to each stock/commodity according to its initial risk, any arbitrary allocation of capital, etc
Capital Redistribution Rules - cash obtained from closing open positions can be reallocated back into still active stocks/commodities according to predefined rules (equal, equal risk, arbitrary etc.)
 
Ability to test historical performance of any stock selection system build with any of above rules from all North American Stock exchanges (about 25,000 stocks)
Option analysis includes following models: Black & Scholes, Cox, Ross & Rubinstein, Garman & Kohlhagen -European call/put on forex


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