Risk Control

Risk control is conducted internally by the Robots/Strategies themselves after extensive testing by the system designers and analysis by Galleon's management team.

The internal placement of stop-loss orders

A stop-loss order is the best way to stop the loss of equity in a bad trade. It is used to limit any trade's loss to a predetermined price. It can be set "at" any amount, and can be either part of the equity or the profits, if any. It can also be used as a point to enter the market, or to lock in profits as they move in your favor by continually moving the stop.

All our automated order execution strategies use stop-loss orders on every trade to limit the downside risk. The stop-loss is initially set wide enough to give the strategy a chance to make a profit. But it is not usually the stop that gets hit when the market turns against the Strategy. Internal stops, which are adaptive and follow the market closely, are always watching the open position, protecting it from too much of a draw down. Also, trailing stops follow the market closely and protect the profit made if the market gives it back or turns around on a good trade.

Money Management

Our system analysis team selects the individual Strategies which have performed the best in real-time trading, one of the criteria for which is that the strategy's real time history reflects a 65% or greater accuracy, if both the win to loss size are equal or 1:1, and/or a win to loss size ratio of 1:5 or better if the accuracy is 50% or less.

We then combine the best of these Strategies into a system that reflects a 10:1 win/loss size ratio over a period of 4 months or more. To illustrate, we consider a system good if it had 5-20 robust strategies that, when combined together, produced a $50,000 USD net return over the past 12 months with less than 5% draw down. Ideally, we would like to have 5-20 strategies working in tandem, each performing historically very well on their own, but in combination maximizing the return on the account while maintaining a minimum draw down. Please note that past performance is no guarantee of future performance.