Jim Simons is the most prosperous hedge fund executive on the planet. He founded the investment company Renaissance Technologies (RenTech), whose flagship fund, Medallion, is the most profitable in history. Simons has no financial education. He is a mathematician. Billions of dollars annually are brought to him and his clients by formulas and algorithms that predict the movement of the market.

Simons Trading Strategies

It is not easy to get advice from the mathematician- his algorithms are a trade secret. With fans, James is also laconic. On the other hand, a few recommendations from the Simons did reach the investment community.

1. Learn from the mistakes of others

Before implementing any strategy, read the results of investors who have already used it. This will protect you from 90% of market failures.

2. Analyze all possible data

As a mathematician, Simons always relies on the high-quality processing of large amounts of information. He is sure that the more data an investor analyzes, the higher his chance to discover patterns in the dynamics of prices in the market and make the right decision.

3. Don’t trust financiers who try to sell you their advice.

Simons argues that quantitative analysis is enough for success on the stock exchange, so there is no point in paying for the advice of financial experts.

4. Don’t give in to public sentiment Early in his financial career, Simons knew little about investing and got rid of the asset when he saw a long line of people wanting to sell gold. Later, the investor recognized this decision as a mistake, even though the deal turned out to be profitable. Simons later argued that he was just lucky and should never rely on public sentiment, trends, and forecasts of third parties.

5. Don’t knock on a closed door

If you can’t master any strategy or a specific financial instrument for a long time, don’t waste your precious time. Perhaps this is a signal that you should look for more convenient investment methods.

6. Automate processes

Simons never tried to learn how to predict the market – he only wanted to find a system that could do it.

7. Don’t be afraid to try something new

James Simons is inherent in the method of trial and error. He was disappointed several times in his activities but still continued to go towards the goal, as he understood that, at least in theory, it could be achieved.

8. Surround yourself with passionate and smart people

The investor appreciates not only the professionalism of his employees and colleagues but also their love for science – James rightly believes that only a person who is passionate about his chosen work can achieve heights.

9. Use your abilities for the benefit of your capital

Simons is sure that almost any character traits and skills can lead an investor to wealth if he knows how to direct them to increase his capital.

10. Choose assets yourself

Simons has developed his own rapid asset valuation scheme, but the algorithm always has the final say. The investor does not recommend his followers to use generally accepted criteria – in his opinion, the key to efficiency is precisely the selection of their own strategies.

The last conclusion that can be drawn from the Jim Simons trading strategy is that money is not always and not for everyone a motivating factor. It may seem unusual, but the Simons team, despite the wealth that it has received from the financial success of the company, is not particularly interested in profits and trading per se.

These professional mathematicians are much more interested in solving the most difficult problems, which are illustrated, among other things, by the behavior of the markets. And this, at least, inspires respect.

By Manali