124 CHAPTER ◆ 1 2 Gate 1
should be able to make a well-informed decision as to whether the concept, the well-
defined trading/investment strategy, is worth investing in. The Research and Document
Calculations stage, K|V Stage 1, outputs must:● Meet the design and development input requirements of the backtest stage.
● Provide information needed for purchasing data, including cost estimates, and back-
testing the system.
● Either contain or make reference to trading/investment system acceptance criteria.
● Specify trading system characteristics necessary for proper implementation.
● Be in a form that allows verification against the inputs of the Money Document.
The information is typically in the form of specifications, drawings, instructions,
verification and test methodology, and acceptance criteria.The product team should arrive at the gate meeting with its deliverables and a rec-
ommendation supported by data. A recommendation to proceed to the backtesting stage
must of course be accompanied by a request for additional resources. At the meeting,
management will review the recommendation and decide what course to take.^3 In order to
pass through Gate 1, several questions must be answered.● Is the trading/investment system well defined (i.e., has it been fully prototyped)?
● Has the product team delivered the required documents?
● Is the product on time and on budget?
● Does the trading/investment system have a competitive advantage?
● Does the project show a good probability of successful implementation?
● Is the project technically feasible? What are the software quality attributes?
● Are the resources requested for continued development acceptable?
● Is there a plan for moving ahead through the backtest stage?
● Is the team functioning as a team or does top management need to reform it?This gate will prevent development of the trading/investment system from moving to the
backtesting stage until the required activities and deliverables have been completed in a
quality manner. Furthermore, this gate will chart the path ahead by ensuring that plans
and budgets have been made for the next stage.
Gate meetings also provide an opportunity to reexamine project forecasts and modify
them and those of others where appropriate. Although some information needed for plan-
ning may at this point in time be difficult to forecast, overall uncertainties are reduced by
learning from experience and reassessing processes that move projects from development
to launch.12.1. Running a Successful Gate Meeting
Gate meetings are critical in any industry where time-to-market is key to success.
Anything that unnecessarily delays a trading/investment system ’ s time-to-market may
hurt its profitability and therefore the profitability of the firm. If management meets and
agrees that a new trading/investment system should be funded and development restarted