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Gandalf Sonar: An Indispensable Nautical Chart for Safe Navigation

Navigating the financial markets is a complex journey, akin to a sailor navigating the ocean. Just as a sailor relies on a detailed nautical map to avoid dangers and chart the best courses, a trader depends on quantitative analysis tools to navigate the fluctuating prices of financial instruments.

For novice systematic/quantitative traders, the recurring question is: “How do I start developing a trading strategy?” This legitimate query often drives them to a frantic search for ready-made rules or excessive optimization, risking falling into the trap of overfitting. This phenomenon can compromise the chances of making profits from the market, sometimes leading to abandonment of the profession.

Similarly, fund managers often face crucial decisions in managing positions, while analysts need to conduct comprehensive analyses, both technical and fundamental, of a specific asset. In this intricate scenario, having a clear map providing essential guidance is crucial to avoid getting lost in the plethora of information available through financial data analysis.

Driven by this need, the research and development team at Gandalf Project decided to create a report that can serve as a nautical chart for any financial professional, giving rise to the Gandalf Sonar report. As the name suggests, the service aims to scan a financial instrument to understand its quantitative characteristics, nature, and the most promising strategies. The depth of the analysis is hardly comparable to other services, allowing anyone to use the tables in line with their personal goals.

A trader will have valuable information to test an idea, with over 30 raw strategies (with only temporal exit and no risk management) to start from, without having to spend time evaluating which path to take for each financial instrument. It is important to note that, despite the quantitative nature of the information, even a discretionary operator can benefit from it. For example, a trader operating discretionarily in mean reversion can gain insights into the current and historical profitability of that approach or use bias/seasonality information to decide how to manage a position.

Below you can observe one of the numerous bias information calculated over three different time periods to evaluate continuity. Additionally, one of the 36 proposed strategies is presented, accompanied by traffic lights that graphically exemplify what is quantitatively performed. This allows us to provide a quick indication of the validity of the trading idea both in the short term (top traffic light) and in the long term (second traffic light).

An analyst can use the information extracted from the tables to drastically increase the depth and quality of an article or presentation. The detailed analyses provided by the Gandalf Sonar report offer a solid foundation for well-founded arguments and accurate insights, making the content more persuasive and informed.

This week, we just launched the Gandalf Sonar service dedicated to the Gold Future, addressing the needs of traders and investors who operate on Gold Future from a speculative perspective, as well as those who use Gold as a hedging instrument (e.g., for equity portfolios). Understanding the correlation between Gold and other assets, over multiple rolling windows, or appropriately weighting portfolio exposure based on the calculated relative strength, can enhance the understanding of ongoing dynamics and reduce expected risk.

The service (in English) is aimed at traders, analysts, financial operators, investors, students, and anyone with a need or interest in the financial world. The service caters to both the retail and institutional markets, with the possibility for the latter to request customization to meet specific needs. A launch promo product that is both a book and a goldmine of operational information.

For a more detailed description of the information in the report, please refer to the service page. To request further information or subscribe to the report, you can write to us at info@gandalfproject.com.

Michael Trequattrini
Quantitative Researcher

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