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feasibility issues, performance issues, or any other factor that could result in a less-than-
satisfactory final product. If both the product team and management make project risk
management a priority, discussion will be more fruitful. Product team members may feel
threatened by conversation that shines light on issues they might have missed or assump-
tions they should reconsider. But, teams that avoid a defensive posture learn faster, their
projects will move forward faster, and their credibility will rise in the eyes of seed capital
providers.^6
At the point of the Gate 1 meeting, the design must be ready for full-scale backtest-
ing, and a freeze is typically applied on the quantitative methods and business/trading rules,
apart from optimization routines that will be run as part of the backtesting stage. After this,
quantitative methods may be changed only through a change control process and a return to
Stage 1 for review, testing, and verification, including an evaluation of the change ’ s effect
on other parts of the trading/investment system. Management must review all design change
proposals at gate meetings to ensure that the change is required, and that the change will
likely accomplish the intended result.12.2. Inputs/ Deliverables
At the gate meeting, management can expect the following deliverables:● Full description of the trading system, including detailed discussion of the quanti-
tative methods and business logic along with a recommendation from the product
team as to how to proceed.
● Referenced research papers and documented business rules.
● Complete consolidated prototype built in Excel or other modeling software.
● Complete performance test results appropriate to the type of trading system, including
graphs, etc.
● Estimated time line and commitments for the backtesting stage.
● Estimated data and software expenses for the backtesting stage.12.3. Summary
The benefit of gate meetings is tighter planning, leading to greater speed to market, and
ultimately to a higher probability of success for the trading/investment system.^7 Both the
product team and seed capital providers (presumably top management) should come the
gate meeting prepared to discuss the relevant issues and make go/kill decisions. As we
will discuss in the chapters on Gates 2 and 3, gate meetings are also good opportunities
to reflect on the stage just completed and to review the portfolio of new and existing trad-
ing systems and reprioritize projects.12.3. SUMMARY