The MAFT strategy is a proprietary trading framework developed by Arbidyne to identify high probability trades with minimal downside risks.
Momentum And Fundamental Trading
Broadly speaking, the MAFT strategy can be broken down into three stages:
Conduct top-down analysis of markets
- Spot current technical trends across the global benchmarks.
- Find possible reversal points.
- High level analysis of global macroeconomics data, industry shifts, major monetary policies, and geopolitical factors.
Analyse market specific trends
- Identify technical trends in industry benchmarks, country specific benchmarks, demographics, and financial assets.
- Identify turning points in the above benchmarks.
Analysis of industry specific drivers e.g., commodity supply and demand.
Plan the trade and continually monitor its development
- Placed products which meet the proprietary technical criteria on watchlist.
- Conducted fundamental analysis to validate the existence of a plausible shift in “value”.
- Monitored event risks for the specific products chosen.
lmplementation: Major Macro Trends
“Our strategy implementation is a top-down process, looking for “fractal” patterns and strong signals in the global benchmarks as well as specific trends within the industry, country and asset class”
Technical analysis is used to identify trend direction, strength and potential reversals for global benchmarks.
Technical analysis is used to identify trend direction, strength and potential reversals for global benchmarks. The fund does not fight major trends, so the portfolio agrees with major trends whether they are long, short or flat.
- A ‘top-down’ process is applied to identify major macro trends.
- Patterns are tested against historical data for individual securities and in the context of their related benchmarks.
- Trades may be entered if a technical pattern has historically proven to have a good reward to risk ratio.
The fundamental analysis aims to predict whether such trends are likely to continue.
Arbidyne believe market specific factors such as retail spending, supply and demand imbalances of a commodity and demographic factors drive significant market shifts. Whilst technical analysis allows them to identify these shifts, fundamental analysis aims to predict whether such trends are likely to continue.
- Arbidyne’s deep understanding of money flow, demographic trends and macro variable bring an edge to the fund’s performance.
- Fundamental analysis is used to eliminated technical signals which defy the trend of macro data (eg. Don’t fight the fed).
- Analysis is conducted on an industry’s competitive landscape and industry specific performance to identity value and an edge.
At the security level, trades are related to the macro trends that have been have identified.
At the security level, trades are related to the macro trends that have been identified. For example, if oil prices are rising then oil-related stocks with supportive technical and fundamentals would be analysed using a ‘bottom-up’ approach. However, a sophisticated approach is required with fundamental analysis at the security level.
- Arbidyne analyse several fundamental factors for a company specific trade.
- This may include competitor analysis, relative performance, projected earnings and management credentials.
If or when required, an industry expert is hired to sharpen the knowledge of a market and help improve the plan of a potential trade.