Applied Portfolio Management Case Study Example | Topics and Well Written Essays - 1250 words

Applied Portfolio Management - Case Study Example It is very significant that no mistake is being made or else it can lead to important losses. Trading systems have several advantages and disadvantages. â€Å"The advantages of trading systems can be hidden when they become associated with trading platforms involving trade order submission and processing.   A clarification of their roles can help explain the benefits of using a trading system.   This can be done without identifying a particular platform or system. Once the platform infrastructure is isolated, a brief look can be taken at why a trader can benefit from a trading system† (Types of Trading System Resources, 2004, para. 4). A good trading system describes when trading must not be attempted, thus preventing forced trading under inconvenient circumstances. It should identify how to independently create a strong watch list of candidate trades to remove the need to chase after the newest hot tip from an advisor. For clear causes, trading systems have easy to use, t ake little of a trader’s time, completely objective and create consistent incomes. It also avoids big draw downs and provides clear trading marks. Once a trading system is reliable in use, extraordinary chances for setting and meeting realistic income goals become obtainable by using a model of accurate money management. A trading method is best learned from a master trader who remains actively busy in teaching. The master can teach the student tailor, the methods to his financial means, personality, skill level and risk tolerance. Another method is to merely read what has been written and adopt it to one’s personal circumstances. The benefit of rule based trading systems lies in its consistency and objectivity. When followed regularly, emotional trading and its connected mistakes are removed from the equation. As a saving, trading systems more than just paying for themselves, not only increases income but also the quantity of capital preserved. 1. Define the trading p lan and system, and must include the following: Trading plan and system can involve any stage of threat and achieve many different savings objectives. A Good trading plan will also give direction on stopping the losses. a. Setup Identification: Setup Identification is very important method of the trading system. There are a lot of actions that we cannot use to any "trading" amount as against "gambling" extent. In other words, if we put on the trade for the reason that you observe the setup, you are trading and if you just go for the action without seeing a setup, you are gambling. b. Trade Execution (entry and exit parameters, trade management). The execution of a command occurs when it is totally filled and not when it is located by the shareholder. When the shareholder places the trade, it goes to an agent who then decides the best method for it to be executed. Trade execution gives marketing and trading staff with tools to powerfully capture and verify financial and physical trad es for energy commodities. c. Position Sizing (money management and asset allocation). Position sizing is the very significant aspect of a trading system. A position sizing model simply tells how much or how big of a position is to be taken. It can be the key factor in deciding whether or not to stay in the game or whether the gains are huge or minimal. Position sizing is the significant method of Money management. Asset allocation is the most significant

Siebel Forced-Ranking System Essay Example | Topics and Well Written Essays - 1000 words

Siebel Forced-Ranking System - Essay Example In a sense, force ranking is a more truthful way of implementing performance management. Managers are forced to differentiate talent and the process of forced ranking also forces managers to spot and champion talent. Since the forced-ranking system requires that criteria for ranking need to be set first and foremost, the system also provides information that conventional performance appraisal systems cannot. The deliberations among managers in determining criteria help them define and understand what are important for success of the organization. Subsequently, knowing the criteria that managers use to appraise performance increases the probability that employees will adjust their behavior in order to succeed. A forced-ranking system can also provide an independent verification of performance appraisal data. Significant variations in the talent data provided by the performance appraisal system and the data provided by the forced ranking process should be worth delving into. Better performing employees may be motivated by a forced-ranking system because they feel appreciated and not treated in the same way as underperformers. In terms of teamwork and collaboration, forced-ranking may also have a positive effect, because those who do not want to cooperate with the team or in a collaborative effort are eliminated. Organiz Organizations implementing forced-ranking may be attractive to high-quality job applicants who would see such a system as one where their contributions would be recognized and rewarded and would therefore be eager to work for the organization, thereby improving the overall quality of the applicant pool. Company investors may view a forced ranking system as management's commitment to accountability and to operations efficiency. Cons May be unfair to people performing at an acceptable level, with attendant legal repercussions in terms of human rights. May create an unhealthy star-cult culture. It may not possible to continually improve the overall potential of a workforce by removing the bottom dwellers and replacing them with better employees. As standards are raised, it would be more difficult to find applicants to replace those that have been removed. A job applicant who is aware that an employer uses a forced ranking system may feel that such a culture would be stressful or risky, and not consider the organization, causing the loss of high-potential applicants. Shareholders might not agree with a forced ranking system because of potential lawsuits or other negative consequences. Some companies using forced ranking have become embroiled in discrimination lawsuits brought by employees upset over dismissal or lower pay (Levinson, 2003). The system may create a dysfunctional, hypercompetitive work environment where employees refused to collaborate with one another, such as hoarding knowledge or hoarding customers,