Catching Waves
An Introduction to Numeta Strategies
Trend Following in the world of trading can be likened to the art of surfing. Much like how a surfer expertly observes the ocean, waiting for the perfect wave to ride, a Trend Following trader monitors the markets, patiently awaiting a strong trend to emerge. This approach involves identifying a significant market movement, akin to a surfer spotting a forming wave, and then entering the trade at the right moment, just as a surfer catches the wave. The key is in riding this wave — or market trend — skillfully, staying with it for as long as it moves favourably, much like a surfer stays with the wave until it loses its momentum. In both surfing and Trend Following, success hinges on timing, precision, and the ability to read and respond to dynamic conditions, aiming to harness the power of the wave or market trend for an exhilarating and profitable ride.
1. Who are we?
We are two guys deeply fascinated with markets, constantly experimenting with new and innovative ways to solve the dynamic 4D puzzles they represent. We both have over 10 years (each) of experience in trading traditional derivative markets and have been focusing on crypto futures since 2019. In addition to trading markets, our combined expertise includes data science, coding, building businesses, and managing money for clients. Our formal qualifications include university degrees in engineering and accounting.
We began our collaboration in 2017, developing algorithmic trading strategies and systems. This partnership evolved over the years and culminated in the founding of Numeta Strategies LP in September 2023. This formalization of our partnership allows us to further develop and expand our trading systems into a structured business entity.
2. What are we up to?
Learning the ropes of technical trading, while wiping out some trading accounts in the process, we both quickly realised that trading is a big-numbers game of probabilities. Our only job is to ensure that our winners make more money in total than what our losers lose, by a margin large enough to be profitable, even if we have more losers than winners. This is not rocket science, but getting your head around the fact that you don’t have to have more winners than losers to be profitable doesn’t come naturally. We also learned that the most important characteristics to succeed at this numbers game are consistency, accuracy, discipline, and unwavering execution — all functions performed far better by a computer than a human (especially myself. I am more of a dreamer than a trading machine).
Realizing that machines can be much better traders than we can, we set out to develop automatic algorithmic trading systems that can execute our strategies while we focus our attention on conceptualizing and testing new features to improve the systems. In the past few years, we have realized that the opportunities in the Crypto markets outstrip those of traditional markets by such a big margin that we are currently focused exclusively on this industry.
The trading methodology we use as a basis for our algorithms is known in the trading industry as ‘Trend Following.’ We have adapted this time-tested approach to suit the unique dynamics of the crypto markets. Since our initial development phase in 2019, we’ve integrated numerous proprietary enhancements to refine and customize the methodology beyond its traditional application in commodity futures markets.
Our Crypto Centaur Long/Short Momentum strategy is a crypto futures trading strategy and will be the focus of our endeavors in the coming months. We have initiated a beta testing run of this strategy with friends and family by managing their segregated accounts through an API trade execution mechanism. The purpose of this beta test is to build out our communication and account management systems and to gain insight into investors’ experiences with the strategy.
3. Why publish results and write about our work?
We’ve launched this Medium blog as a platform to share our learnings and insights. Additionally, we’ll be publishing analyses and performance data of our strategies. Our aim is to enhance our profile and engage with our readers, hoping to attract insightful comments and questions that can further our learning.
To get a glimpse into our approach, you can explore our first blog post about our strategy by following the link below:
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Disclaimer
The views expressed in this article are the views of Numeta Strategies and are subject to change at any time based on market and other conditions. This is not financial or investment advice, nor a solicitation for investment funds and should not be construed as such. References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities.
