Vladan Babovic, PhD
Partner
Tectrasys AG, Inc.

Dr. Babovic became a NeuroDimension customer several years ago. At that time he was a senior researcher for the Danish Hydraulic Institute (www.dhi.dk). He used our NeuroSolutions software to solve very interesting and challenging problems related to hydrodynamics. For example, he and his staff developed a real-time forecasting system to predict the speed and direction of currents along a section of the Copenhagen harbor. This system was developed to determine the best times to tow very large sections of the Øresund tunnel (a 16 km tunnel that was being built to link Sweden to Denmark - www.oeresundsbron.com). This system allowed them to reduce the risk of the tugs losing control of the very expensive cargo.

Dr. Babovic has had a strong interest in financial modeling over the years, completed a business degree in Switzerland and developed successful models to forecast crude oil prices. While obtaining his business education he met up with three individuals from various backgrounds: a trader from a German bank, a hedge fund manager and a lawyer. The four of them decided to form their own company and hedge fund as a full-time venture. The Swiss-based company is Tectrasys. The fund is marketed by Alternative Capital Partners AG (http://www.alternativecapital.ch).

As of August 13th, 2003, the fund is off to a very impressive start, achieving a 48% return for its investors since the beginning of the year. These returns came at a relatively low risk, since the models used have a Sharpe Ratio of at least 5.5, a value at risk of only 0.25% and the capital is always leveraged by less than a factor of 2. With performance numbers like these, the company should have no problem of reaching its goal of $10,000,000 under management by the end of the year.

How were they able to achieve this initial level of success? The centerpiece of their system is TradingSolutions. Dr. Babovic developed over 60 models using TradingSolutions and about 20 models using a tool that specializes in rule-based systems. He chose TradingSolutions because of its strong neural network modeling capabilities and the ease with which he could test out new ideas to see if they work.

A unique part of the methodology is the adaptive voting system that he developed. This system takes the signals from all 80 models and combines them into a set of signals that they use to trade the following futures contracts on an end-of-day basis:

1. DAX
2. EuroStock
3. SMI
4. NASDAQ
5. S&P
6. 30-year T-Bonds
7. German Bonds
8. Euro vs. Dollar
9. Dollar vs. Yen

Testimonials disclosure: Unique experiences and past performances do not guarantee future results! Testimonials herein are unsolicited and are non-representative of all clients; certain accounts may have worse performance than that indicated. Trading spot currencies involves substantial risk and there is always the potential for loss. Your trading results may vary. Because the risk factor is high in the foreign exchange market trading, only genuine "risk" funds should be used in such trading. If you do not have the extra capital that you can afford to lose, you should not trade in the foreign exchange market. No "safe" trading system has ever been devised, and no one can guarantee profits or freedom from loss.