We have identified the following risk factors and have extensively worked to reduce the risk associated with them:
- Market Hours
- After Market
- Stock Selection
- Trade opportunity
- Decision Time
- Entry Multiplication
- Popular Indicators
The regular portfolio risk factor is 7.5 times NAFA’s risk factor (assuming our average trade is extended to one hour).
We do not trade or hold any position after the market closes on Friday.
A regular portfolio’s risk is 105 times that of NAFA’s risk factor.
To summarize our risk reduction effort, we will illustrate a comparison between a regular portfolios holding for one year to that of NAFA’s risk factor when doing one trade a day held for one hour and repeated every trading day.
A regular portfolio’s risk factor is measured by holding investments value during non tradable hours, which are weekends (from 3:00 pm Friday to 8:30 am Monday), extended trading hours after the market closes (from 3:00 pm central time to 6 pm central time), and trading hours (8:30 am to 3:00 pm central time)
Weekends= 52 weeks a year x 2 days (Saturday and Sunday) x 24 Hours = 2,496 units compared to a 0 units of NAFA Risk since we do not hold any market position or trade during weekends.
Market Closed Hours = 16.5 Hours (a week) x 52 weeks x 5 days = 4,290 units compared to 0 units of NAFA Risk since we do not hold any market position or trade during market close
Trading Hours = 7.5 trading hours x 52 weeks (a year) x 5 days (a week) = 1,950 units compared to that of 1 unit of NAFA Risk since deviation is not a risk it is and opportunity see chart above and notice opportunities marked from 1 to 13.
It is also worth noticing here that not all deviations are entry or exit and one deviation may achieve profit target for the day.
NAFA has eliminated from its system the risk units found in that of a regular portfolio’s – 8,736 units (2,496 +4,290 + 1,950) NAFA’s risk factor is 1 unit compared to 8,736 units of a regular portfolios holding with any long term holding investment.
Between Bond and Hedge Fund-Fund Position
NAFA’s development objective is to match the security provided through investments in bonds, and profitability offered by investing in hedge funds. We accomplish this by reducing elements of risk and the degree of risk encountered within each of those identified elements. We increase the return on an investment through the application of our developed trading modules that have been successfully tested. In NAFA’s strategy and programming the objective is to find a profitable trade and repeat it to accomplish profit target.
We are currently developing NAFA Max Income fund. This fund will be based on longer holding periods while reducing the required investment amount. The fund is based on a new version of indicators designed for option trading. This new development has been encouraged by initial investors and NAFA’s own funds.
The fund will be open for limited investors starting from October 1, 2013.
Also, NAFA Partnership, LTD’s partners and Ace sales & Services created a new corporation to develop trading education program. The program will be offered in three stages Introductory, Basic and Advanced. The teaching and the curriculum will be provided by professionals in education and IT in addition to NAFA principals. The program is anticipated to start in the first quarter of 2014.