Investment Strategy
“Using one strategy is like equipping a mechanic with only a hammer.”
Which is why we use a wide range of strategies to construct our portfolio. Our strategies prioritise high-probability trades with a high risk-reward ratio, to allow for compounding results.
Building on 20+ years of combined proprietary trading experience, and a 285% average return over the past 5 years (31% CAGR) by our founders. We have launched our flagship fund: Praetorian Capital Fund. This is your opportunity to gain access to high performance strategies with a strong focus on risk management.
Investment Landscape
Markets offer a wide range of investment opportunities, from the steady returns of real estate and private wealth management to the high-performance strategies of leading proprietary trading firms. At Praetorian Capital, we embrace a data-driven approach to identify and capitalise on the most promising opportunities, delivering exceptional returns.
With a Founders’ average return of 285% over the past 5 years (31% CAGR), our proven methodology is built to navigate evolving market conditions and consistently generate superior performance.
Compounded return % based on historical averages
Strategy Classes
Our strategies thrive in all market conditions and timeframes. Using three distinct approaches—momentum, level, and event-driven—we dynamically adjust to capture opportunities while ensuring strong risk management and consistent performance.
Momentum Strategies
We ride strong price trends, using price action, volume, and order flow to confirm momentum. Positions are taken when a trend gains strength and exited before it reverses, ensuring we capitalise on market movement with precision.
Level Strategies
By identifying critical support and resistance levels, we anticipate high-probability price reactions. Our approach involves entering positions at key inflection points, buying near support and selling near resistance, maximising opportunities in predictable price movements.
Event-Driven Strategy
Markets react sharply to major events like earnings reports and geopolitical developments. We combine technical analysis with real-time market data to capture price swings driven by these catalysts, positioning ourselves ahead of the move.
Market Analysis
We adopt a data-driven, adaptive approach to identify the highest-probability trades. Our strategy selection evolves with markets, integrating technical analysis, sentiment indicators, and macroeconomic insights.
Algorithmic Insights
Market signals are generated with the help of algorithms, leveraging technical and quantitative indicators, ensuring efficient opportunity identification with strict risk management.
Technical and Sentiment Indicators
Monitors OBV (on-balance volume), put-call ratios, open interest, RSI, and MACD to determine trends and market strength. Depth indicators are incorporated for precise entry and exit timing.
Macroeconomic Analysis
Evaluates key factors like inflation, interest rates, and economic growth to identify sectoral opportunities aligned with broader market trends.
Exposure Management
We maintain a structured risk framework to balance flexibility, liquidity, and capital preservation.
Fund Exposure Limits: We hold 15-20% in cash reserves to hedge against volatility, with an additional 20% margin buffer for exceptional conditions.
Liquidity Management: Positions are actively monitored to ensure flexibility and efficient risk control.
Adaptive Exposure: Portfolio risk is dynamically adjusted based on market conditions and correlation to optimise diversification.
Position & Strategy Limits: Individual trades capped at 1-2% risk, while total strategy exposure is limited to 10%, preventing over-concentration.
This structured approach enables disciplined risk-taking while preserving capital in all market conditions.
Risk Management Process
24/7 Automated Monitoring
Advanced systems continuously track key portfolio metrics, including volatility, position sizes, correlations, and potential losses. Real-time monitoring ensures immediate adjustments to mitigate outsized risks.
1. Trade Signal Generation
Signals derived from sentiment analysis, market events, liquidity, and seasonality patterns.
2. Risk Assessment
Factors such as portfolio correlation, volatility expectations, and event risks are evaluated.
3. Entry & Exit Level Calculations
Guardrails are established to maintain optimal risk/reward ratios and limit unnecessary exposure.
4. Execution & Capital Allocation
Position sizes dynamically adjusted based on strategy grading and market potential.
