Quality Money Management : Process Engineering and Best Practices for Systematic Trading and Investment

254 CHAPTER ◆ 2 8 Perform SPC Analysis and inputs have changed. Therefore, you must investigate the root cause to determine the ...

255 The tool that has been developed over the last 80 years for the above facts is called SPC. The goal of this tool is not to p ...

256 CHAPTER ◆ 2 8 Perform SPC Analysis In this example, both X bar and R are observations of a random variable. Given the sample ...

257 These values can be used as known values of  and  , and the control charts can be con- structed. For the X bar chart, the ...

258 CHAPTER◆ 2 8 Perform SPC Analysis A common complaint about SPC is that it reacts too slowly. The real question is the follow ...

259 Let us assume that a trading system performed 100 trades, of which 47 were profitable, 33 were unprofitable, and 20 were scr ...

260 CHAPTER ◆ 2 8 Perform SPC Analysis Over time, other process-monitoring tools have been developed for different underlying pr ...

261 A process with a low C pk should be thought of as a process that will require constant monitoring. 28.4. LOOP 1: Perform SPC ...

262 CHAPTER ◆ 2 8 Perform SPC Analysis higher reward to risk ratios similar to continuous improvements for better quality cars, ...

Determine Causes of Variation Determining causes of special variation, or nonconformance, in a trading/investment system require ...

● Identify root causes. ● Test and confirm using simulations of the effect of the root cause. ● Develop recommendations for fixe ...

265 Ishikawa identifies five steps to making a fishbone diagram: ● Decide the quality characteristic, for example, dispersion of ...

266 CHAPTER ◆ 2 9 Determine Causes of Variation A secondary result of using Pareto analysis is that the largest sources of varia ...

267 29.6. Analysis of Variance ANOVA is a collection of statistical models where observed variation is partitioned into componen ...

268 CHAPTER ◆ 2 9 Determine Causes of Variation ● Political changes. ● Index composition changes. ● New, tradable contracts are ...

269 Just as in manufacturing the only way to find these anomalies is to apply SPC theory to results of the process. Once the pro ...

270 CHAPTER ◆ 2 9 Determine Causes of Variation 29.11. Summary A firm ’ s goal should be to continuously improve their profit-to ...

271 Kaizen: Continuous Improvement In Japanese, kaizen means continuous improvement. As a business strategy, kaizen aims to elim ...

272 CHAPTER ◆ 3 0 Kaizen: Continuous Improvement methodologies exist for continuous improvement. The most widely known is the fo ...

● The organization must document preventive action to define requirements for: Determining potential nonconformities and their ...