Underpinning Beach Horizon’s investment philosophy is the concept that financial markets do not appear to be efficient and experience persistence of behavior in the form of price trends. This can be somewhat explained by influences of crowd behavior, information absorption delays, changing fundamental drivers and the macro economic evolution of global economies.
Price trends are not smooth and market movement is not evenly distributed through time and is in itself quite complex. One key differentiator for Beach Horizon in this space is that Beach Horizon’s research recognises this and models complex price behaviour with a highly unique blend of proprietary linear and non-linear strategies. These strategies of this type can be fully automated and Beach Horizon believes are better able to deal with price behaviour such as abrupt price reversals and variable range conditions.
The advantage of automated trading systems is that they deliver a consistent, disciplined trading approach that not only enhances risk control but opens up a wealth of historical data for analysis and research. The certainty of action that is delivered from automated trading systems means that one can be certain about their trading actions on past data. A researcher can then instigate experimental investigation that leads to the discovery of potentially persistent phenomena in markets.