Investment Philosophy

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First Lenox International incorporates two mathematically derived trading systems that views price behavior from separate perspectives. The first system (spreadsheet) is a market profile system using a Bell Theorem over a weekly and daily timeframe. A Bell curve is established by volume at specific price points and trading activity. The essence of the program is to define at what price points/barriers did the most trading take place. Smart money is also the largest money in the markets and therefore by knowing where smart money is taking action we can alien ourselves with that place. Smart money is also the largest money in the markets and therefore by knowing where smart money is taking action we can alien ourselves with that value. The system gives us one key level each week that will “attract” price action. Each day we are given a “shorter term” (daily) key level for price activity. The system also grades the value of these points relative to the market with a rating of l-18, one being the weaker and eighteen the strongest. We also derived our specific risk levels and profit objectives based on weight moving average of price over specific time periods.

This takes all ambiguity of emotional discretionary trading out of the markets and allows us act/react professionally to price activity.

The second system is also a math based system. This system is founded on moving linear regression theory along with the mathematics of directional index components. By reviewing data points in a linear model we arrive at one of three possibilities (buy, sell, or neutral) over 4 timeframes which allows us a broad view of market behavior. When we achieve a confluence of like signals across the timeframe landscape we have the strongest signals and act accordingly. Risk is variable in this system as it becomes a function of hourly price activity and range. When trades develop positively over time then we adjust risk to higher timeframes. Reward is similarly determined. First Lenox International also uses a software system that updates daily “floor trader numbers which is a simple formula that plots 5 key levels daily. Floor traders have used these numbers for decades and they still serve as key points to monitor. We us these to help us value risk and reward on shorter term trades.

A component of risk management is our trading system. Both mathematically based systems that were developed by our Director of Trading have absolute levels of risk tolerance. Clients should be aware that drawdowns can occur and could also be greater in bad market conditions or possibly in a case of unexpected catastrophic events. Both systems were developed after 30 years of discretionary trading. After researching market psychology and working with the best trading advisers in the industry we believe that in order to achieve consistent results one must remove emotions out of trading. Be relying on mathematics to guide trade activity we truly believe to have an advantage over our competition.