The Momentum and Fundamental Trading (MAFT) strategy is a proprietary trading framework developed by Arbidyne to identify high probability trades with minimal downside risks, using a systematic framework which combines technical analysis, fundamental analysis and risk management, the Program Manager manages a long/short portfolio which actively trades Australian and international equities, global index, fixed income and commodity futures; currencies and CFDs over equities, fixed income, commodities and Indices (Portfolio).
Therefore, the MAFT strategy can be viewed as master framework which governs a multitude of systematic processes to analyse, trade and manage risk.
Broadly speaking, the MAFT strategy can be broken down into three stages:
Step 1: Conduct top-down analysis of markets
• Identify current technical trends across global benchmarks
• Find possible reversal points
• High level analysis of global macroeconomic data, global industry shifts, major monetary policies and geopolitical factors
Step 2: Analyse market specific trends
• Identification of technical trends in industry benchmarks, country specific benchmarks, currencies, commodities and demographics
• Identification of turning points in the above
• Analysis of industry specific drivers behind the trends that are identified e.g. commodity supply and demand
Step 3: Plan the trade and continually monitor its development
• Upon identifying an industry trend, products are placed on a watchlist which meet the proprietary technical criteria.
• Fundamental analysis is then conducted to validate the existence of a plausible shift in “value”.
• Finally, event risks are monitored for the specific products chosen.
Yet these basic steps include a number of inputs that are constantly analysed to improve market selection, timing and risk management.