- Jun 13, 2025
- Strategy
In financial markets, regardless of bull or bear market cycles or market volatility, there is always a strategy that can identify stable profit opportunities through a unique logic — the Neutral Strategy (NS) on the HSAM platform is precisely such a strategy. Its core principle is rooted in the fundamental laws governing market operations: when the overall market environment and core factors remain unchanged, the price movements of individual products typically follow their original trajectories, exhibiting identifiable range-bound fluctuations and value reversion characteristics. The NS strategy captures these high-frequency,fluctuations to establish a stable profit logic across various market conditions.
Strategy Core: From Market Essentials to Opportunity Capture
The underlying logic of the NS strategy is based on a deep understanding of market “inertia.” Taking stocks as an example, when the fundamentals, industry position, and macroeconomic drivers of a particular stock have not undergone significant changes, its price may fluctuate repeatedly within a relatively narrow range. This fluctuation is not random movement, but rather a regular fluctuation around intrinsic value — when prices temporarily surge above the value center, they retreat due to selling pressure; when prices fall excessively, they rebound due to buying support. The NS strategy uses technical analysis tools to precisely identify support and resistance levels within such price ranges, reducing holdings when prices reach resistance levels and increasing holdings when prices fall back to support levels, accumulating returns through high-frequency two-way trading.
In the commodity futures market, this pattern is even more pronounced. For example, during stable supply-demand phases, oil prices often experience minor fluctuations due to short-term capital speculation or geopolitical events, but they remain constrained by fundamentals in the long term. The NS strategy uses indicators such as trading volume, open interest, and price patterns to determine the boundaries of fluctuations, executing low-buy, high-sell operations within the range. Even if the volatility range is limited, as long as the pattern occurs frequently, the strategy can achieve profits through the accumulation of trading volume.
Market Adaptability: Profit Resilience Across Bull and Bear Markets
The unique advantage of the NS strategy lies in its strong adaptability to market conditions. Traditional trend strategies rely on one-sided market trends, while the NS strategy performs exceptionally well in volatile markets. When the market is stuck in a range-bound consolidation phase with no clear upward or downward trend, most strategies struggle to generate profits. However, the NS strategy can continue to generate profits by capturing volatility patterns. During a period of global stock market volatility in a certain quarter of 2024, the S&P 500 Index fluctuated within a narrow range. HSAM's NS strategy achieved stable profit accumulation through range trading of its component stocks, validating the strategy's effectiveness in environments without clear trends.
In bear markets, the NS strategy also demonstrates its effectiveness. When the overall market is declining but individual products exhibit range-bound volatility due to their resistance to declines or short-term positive factors, the strategy can construct a neutral portfolio by selecting specific targets to identify local volatility opportunities in a declining market. For example, during a broad market decline, a leading stock in the healthcare sector formed an independent volatility range due to stable performance, and the NS strategy achieved counter-trend returns through high-frequency trading.
Risk Control: Steady Performance Under Volatility Patterns
The NS strategy's risk control system is deeply integrated with its profit logic. Since the strategy focuses on capturing regular volatility patterns, stop-loss levels for each trade can be precisely set at the boundaries of volatility ranges. When prices break through pre-set resistance or support levels, it is deemed that the volatility pattern has failed, triggering the strategy's automatic stop-loss mechanism to limit losses to a finite range. Additionally, the strategy diversifies across multiple eligible assets to mitigate the impact of abnormal volatility in a single product on the overall portfolio. For example, in the foreign exchange market, the NS strategy can simultaneously track the volatility ranges of multiple currency pairs such as EUR/USD and GBP/USD, using multi-asset rotation trading to smooth the return curve.
HSAM's Neutral Strategy NS acts as a “volatility hunter” in the market, relying not on one-sided trends but on precise understanding of price patterns and high-frequency trading logic to build a stable profit model across various market conditions. For investors seeking low volatility and steady returns, the NS strategy offers a reliable option to navigate market cycles.