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What is meant by
"Validated Hypotheticals"?
For a completed
discussion of the scientific methods used to
validate Meridian's hypothetical results please
download
"Validity of Meridian's Hypothetical Results".
For a more simple
understanding of the validity of Meridian's
hypothetical results please realize:
-
The Meridian
product-certification method requires
successful real-time forward testing prior
to a product being offered. The Meridian
Global Diversified Fund currently has one
full year of real-time forward testing.
-
Meridian
averages 43 trades per year; less than 2
trades per year per market. It is a simple
process to review historical market data to
validate entries, exits and subsequent
profits.
-
Meridian's
hypotheticals assume worst-case scenarios
and use overly pessimistic figures for
slippage and commissions (including
commissions for contract expiation rolls).
-
Meridian's average trade-length is 161 days.
Even days of slippage would account for only
a small percentage of the trade's overall
value.
-
Meridian's trade-selection methodology uses
only one trade-decisive variable.
Consequently, curve-fitting to historical
market-data is impossible.
CFTC
HYPOTHETICAL PERFORMANCE DISCLOSURE:
HYPOTHETICAL
PERFORMANCE RESULTS HAVE MANY INHERENT
LIMITATIONS, SOME OF WHICH ARE DESCRIBED
BELOW. NO REPRESENTATION IS BEING MADE THAT
ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE
PROFITS OR LOSSES SIMILAR TO THOSE SHOWN
HEREIN. IN FACT, THERE ARE FREQUENTLY SHARP
DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE
RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY
ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.
ONE OF THE
LIMITATIONS OF HYPOTHETICAL PERFORMANCE
RESULTS IS THAT THEY ARE GENERALLY PREPARED
WITH THE BENEFIT OF HINDSIGHT. IN ADDITION,
HYPOTHETICAL TRADING DOES NOT INVOLVE
FINANCIAL RISK, AND NO HYPOTHETICAL TRADING
RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT
OF FINANCIAL RISK IN ACTUAL TRADING. FOR
EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR
TO ADHERE TO A PARTICULAR TRADING PROGRAM IN
SPITE OF TRADING LOSSES ARE MATERIAL POINTS
WHICH CAN ALSO ADVERSELY AFFECT ACTUAL
TRADING RESULTS. THERE ARE NUMEROUS OTHER
FACTORS RELATED TO THE MARKETS IN GENERAL OR
TO THE IMPLEMENTATION OF ANY SPECIFIC
TRADING PROGRAM WHICH CANNOT BE FULLY
ACCOUNTED FOR IN THE PREPARATION OF
HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF
WHICH CAN ADVERSELY AFFECT ACTUAL TRADING
RESULTS.
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