# I Know First Hedge Fund Simulation: 39.5% Return in 7 Months

The I Know First trading simulator uses the signal data in order to generate daily trades according to a simple set of rules. In this portfolio 3 different packages are used: stocks, currencies and interest rates.

• I Know First hedge fund simulation -> 39.42%
• I Know First stock simulation -> 47.54%
• I Know First interest rates simulation -> 32.27%
• I Know First G10 currencies simulation -> 11.00%

In order to prevent unnecessary volatility and high spread costs the currency universe is minimized to G10 currencies only. Also, while we trade four assets a day in each class, if not enough trades are available they are replaced with a “blank” asset, which simply means the funds were not allocated. The fund’s equity is divided 60% in stocks, 30% in interest rates, and 10% in currencies. Then the funds are sub-allocated into four assets within the class using a 50% signal allocation, which means 50% of the sub-allocated funds are allocated equally among the four assets, 50% are allocated according to the signal strength of these four assets on a daily basis (this is explained in the day trading analysis and table 2 below). Furthermore, while here the chart is conservative, one could leverage the currencies class by an at least 10-1 ratio (brings currency return to 280% and IKF total fund return to 55%).

Below is the chart showing the fund’s equity growth over the time period. Notice that the returns from stocks, currencies, and interest rates could have been made with the 1 package subscription.

Starting with an equity of \$10,000 on July 1st 2014 the simulation trades until February 1st 2015 when equity hits \$13,942 for a staggering 39.42% return in just 7 months.

Below is an example of using 50% signal allocation. As can be seen, in each class the absolute value of the four signal’s sum is taken. Each signal is then divided by the sum to generate the signal allocation. The even allocation is 25% to each asset. The 50% allocation takes 50% of the weight from the signal and even allocation.

Below is the change in equity for every asset class on a daily basis.

 Stocks (60%) Interest R. (30%) Currency (10%) I Know First 7/1/2014 10000 10000 10000 10000 7/2/2014 9971 9861 10003 9941 7/3/2014 9977 9881 10004 9951 7/4/2014 9988 9959 10010 9981 7/7/2014 9988 9959 9995 9980 7/8/2014 10017 9959 10001 9998 7/11/2014 10077 10202 9961 10103 7/14/2014 10044 10134 9985 10066 7/16/2014 9979 10159 9984 10034 7/17/2014 9951 10351 9978 10073 7/18/2014 9996 10280 9971 10079 7/21/2014 10014 10284 9958 10090 7/22/2014 9975 10315 9956 10075 7/23/2014 9951 10346 9948 10069 7/24/2014 10174 10201 9950 10162 7/25/2014 10089 10094 9954 10080 7/28/2014 9834 10108 9957 9931 7/29/2014 9717 10109 9958 9861 7/30/2014 9813 10110 9959 9920 8/1/2014 9774 9960 9951 9851 8/4/2014 9765 9950 9984 9846 8/5/2014 9647 9934 9995 9771 8/6/2014 9722 9926 9994 9814 8/7/2014 9712 9936 9992 9811 8/8/2014 9927 10088 9977 9985 8/11/2014 10058 10078 9974 10060 8/12/2014 10176 10088 9980 10135 8/13/2014 10075 10009 9984 10051 8/14/2014 10123 9999 9974 10076 8/15/2014 10013 10093 9974 10039 8/18/2014 10035 10227 9972 10092 8/19/2014 9944 10097 9978 9999 8/20/2014 10058 10065 9977 10058 8/21/2014 10122 10069 9962 10096 8/22/2014 10085 10049 9975 10069 8/25/2014 10079 10143 9989 10095 8/26/2014 10159 10188 9993 10157 8/27/2014 10210 10142 10000 10175 8/28/2014 10292 10182 10005 10236 8/29/2014 10329 10248 10007 10278 9/1/2014 10253 10253 10002 10234 9/2/2014 10253 10253 10008 10235 9/3/2014 10130 10054 10012 10102 9/4/2014 10170 10050 10001 10124 9/5/2014 10150 10115 9999 10131 9/8/2014 10237 10060 10016 10168 9/9/2014 10167 10109 10066 10147 9/10/2014 10241 10213 10097 10225 9/11/2014 10220 10279 10122 10235 9/12/2014 10185 10284 10124 10216 9/15/2014 10243 10419 10136 10292 9/16/2014 10361 10324 10151 10337 9/17/2014 10295 10262 10155 10278 9/18/2014 10382 10274 10143 10333 9/19/2014 10420 10387 10147 10391 9/22/2014 10445 10320 10181 10389 9/23/2014 10471 10288 10205 10397 9/24/2014 10525 10334 10209 10444 9/25/2014 10433 10322 10204 10384 9/29/2014 10497 10347 10219 10432 9/30/2014 10539 10345 10227 10457 10/1/2014 10477 10317 10294 10419 10/2/2014 10573 10294 10331 10473 10/3/2014 10615 10593 10348 10591 10/6/2014 10551 10518 10366 10532 10/8/2014 10764 10824 10459 10761 10/9/2014 10783 10985 10433 10818 10/10/2014 10812 10929 10423 10818 10/12/2014 10634 10947 10440 10718 10/17/2014 10666 11010 10408 10753 10/20/2014 10566 11037 10407 10700 10/21/2014 10573 11048 10411 10707 10/22/2014 10999 11024 10412 10960 10/23/2014 10864 10959 10449 10863 10/24/2014 11148 10944 10439 11028 10/27/2014 11131 11095 10408 11060 10/28/2014 10941 11207 10435 10984 10/29/2014 10999 11428 10430 11083 10/30/2014 10861 11468 10385 11007 10/31/2014 11212 11417 10370 11203 11/3/2014 11360 11529 10377 11326 11/4/2014 11471 11834 10385 11483 11/5/2014 11534 11808 10346 11509 11/6/2014 11519 11736 10320 11476 11/7/2014 11593 11706 10318 11511 11/10/2014 11598 11604 10325 11485 11/11/2014 11348 11689 10336 11363 11/12/2014 11326 11448 10344 11280 11/13/2014 11321 11474 10347 11286 11/14/2014 11424 11486 10331 11349 11/17/2014 11426 11465 10349 11345 11/18/2014 11470 11509 10372 11387 11/19/2014 11536 11414 10409 11402 11/20/2014 11699 11463 10428 11516 11/21/2014 11760 11325 10425 11510 11/24/2014 12178 11248 10392 11729 11/25/2014 11962 11353 10408 11638 11/26/2014 12024 11407 10366 11686 11/27/2014 11978 11530 10351 11696 11/28/2014 11978 11589 10356 11714 12/1/2014 11961 11589 10354 11704 12/2/2014 12045 11613 10349 11760 12/3/2014 12024 11557 10354 11731 12/4/2014 11911 11511 10369 11653 12/5/2014 12081 11503 10375 11751 12/8/2014 12097 11483 10404 11757 12/9/2014 12114 11466 10436 11766 12/10/2014 11965 11508 10519 11701 12/11/2014 12110 11509 10548 11790 12/12/2014 12032 11722 10513 11806 12/15/2014 12179 11614 10472 11855 12/16/2014 12221 11697 10489 11907 12/17/2014 12503 11591 10517 12043 12/18/2014 12566 11745 10527 12128 12/19/2014 12997 11603 10538 12335 12/22/2014 13233 11656 10551 12488 12/23/2014 13336 11694 10511 12554 12/24/2014 13391 11728 10556 12601 12/26/2014 13396 11872 10579 12653 12/29/2014 13524 11939 10622 12753 12/30/2014 13437 11837 10618 12670 12/31/2014 13475 11728 10630 12658 1/1/2015 13615 11729 10641 12738 1/5/2015 13593 11863 10698 12776 1/6/2015 14065 11825 10650 13024 1/7/2015 14389 11983 10689 13262 1/8/2015 14511 12020 10721 13345 1/9/2015 14521 11892 10739 13311 1/12/2015 14597 11867 10762 13347 1/13/2015 14628 12126 10781 13453 1/14/2015 14481 12274 10779 13421 1/15/2015 14268 12586 10747 13401 1/16/2015 14473 13069 10762 13673 1/19/2015 14712 12665 10755 13680 1/20/2015 14712 12665 10821 13689 1/21/2015 14729 12558 10833 13665 1/22/2015 14663 12491 10795 13602 1/23/2015 14726 12691 10861 13711 1/26/2015 14909 12311 10922 13697 1/27/2015 15220 12276 11012 13868 1/28/2015 15072 12300 11109 13808 1/29/2015 14883 12867 11100 13894 1/30/2015 14690 12666 11078 13718 2/1/2015 14754 13227 11130 13942