Customer

TLW Capital Management (TLW) is a hedge fund that specializes in trading currencies and commodities. The firm's founder and Chief Investment Officer Troy Wilson has spent over a decade developing a systematic method of trading that leverages advanced Forex strategies to increase profits and reduce risks.

TLW has used off-the-shelf technology platforms like TradingViewand QuantConnectto help chart, model, and backtest various strategies. Many aspects of its systematic trading method, however, have remained manual or have required manually inputting extensive code to run. The firm ultimately desires to have a fully autonomous trading system

Challenges

TLW faced several significant challenges related to implementing their advanced Forex strategies. The most urgent of these pain points involve improving the speed of their decision-making which has a direct and substantial impact on revenue.

"Price action is constantly moving. Every second you spend making a decision . . . it could be moving against you. So the time savings I'm looking at there actually does equate to revenue."

—Troy Wilson, Founder & Chief Investment Officer of TLW

With the above emphasis on swift decision-making, TLW required a solution that effectively addresses four key pain points.

1. Building and testing trading algorithms manually are time-consuming and resource-intensive endeavors. These inefficiencies hinder TLW's ability to respond quickly to market changes and optimize their trading strategies.
2. The lack of state-of-the-art tools to analyze data and arrive at trading-related decisions quickly often results in missed opportunities that have a significant negative impact on top-line revenue. This especially is the case in fast-paced Forex markets.
3. Inaccurate or improperly integrated data in TLW's systems significantly degrades the reliability of their backtesting and strategy development. The lack of an efficient data management system has posed risks to the reliability and effectiveness of TLW's trading models.
4. The difficulty and cost to source and retain a stable team of developers and analysts to build and support a custom, state-of-the-art algorithmic trading system have historically been prohibitive, especially where turnover rates are exceptionally high.

Solution

After viewing demos of 4Thought's AI automation & analytics platform for financial firms, TLW partnered with 4Thought to:

1. Complete a multi-phase customization of 4Thought's platform which met many of TLW's needs out-of-the-box; and
2. License the customized platform from 4Thought to power a substantial part of their advanced Forex trading system.

In addition to addressing TLW's above four pain points, this solution offered the firm significant cost savings over engaging in-house developers to build and maintain a comparable automated Forex trading platform.

"It saves me at least a couple hours every day, minimally. And then, in addition to the savings on the developer side, to me it was just a win-win solution."

— Troy Wilson, Founder & Chief Investment Officer of TLW

Of note here were TLW's concerns related to the accuracy and efficient processing of data, which were especially important given the widely known shortfall of AI platforms to meet the rigors of institutional finance. These concerns dissipated when TLW learned that 4Thought's unique platform infrastructure restricts the AI to run in a custom environment built for finance which validates all AI output against trusted data sources.

Impact

The implementation of the 4Thought Platform is having a transformative impact on TLW's operations, mostly by improving the speed of their decision-making. By being able to enter trades just a few minutes earlier, TLW can capitalize on market opportunities that they otherwise would have missed. This ability to act quickly with confidence gives TLW a competitive edge in fast-paced Forex trading markets.

In particular, implementing the 4Thought Platform has led to the following key changes at TLW.

1. By automating the firm's manual processes, the platform significantly reduces the time that TLW's staff spends on chart analysis and coding. The firm can now reallocate this time to higher value tasks like developing new algorithms that optimize its strategies in real-time in response to market changes.
2. By providing a highly flexible and easy-to-use technology system, the 4Thought Platform enables TLW to add custom features that improve their trading methods and workflows to an extent that was not possible with their prior setup of various off-the-shelf platforms. For example, TLW has added custom data sources and internal tools that enhance their trading strategies and reduce the risk of human error. (See images of platform and custom tool.)
3. By enabling the easy automation of manifold risk management protocols, the 4Thought Platform empowers TLW to establish a growing integrated system of risk controls that adapt quickly to real-world changes. This major shift away from constant manual monitoring of markets to more systematic management of market risk leads to greater confidence in the ongoing stability of TLW's performance by the firm's constituents, including LP investors.

Conclusion

In summary, the implementation of the 4Thought Platform has provided TLW with a customized solution that is transforming their business, primarily by significantly increasing the speed of decision-making while addressing key operational challenges. The platform offers a unique combination of power, flexibility, and ease-of-use at an accessible price point, which ultimately helps TLW increase profits and reduce risk in the highly competitive Forex markets

"4Thought's ability to permute across many different parameters expedited the production curve to a degree that would not be attainable unless I hired a full time development team working 24 hours a day... The customization & time savings have been game-changers for us."

- Troy Wilson, Founder & Chief Investment Officer of TLW -