Discovery
AB Process is a rules-driven, trend-following investment approach that uses momentum confirmation and disciplined trade construction. It interprets market regimes through an opponent-process framework with an initiating A phase and a concluding B phase. Momentum and continuation risk are managed with statistical control charts that surface bull and bear traps inside the prevailing trend; these traps often trigger forced liquidations—short covering in uptrends and long liquidation in downtrends—that reinforce and sustain existing momentum. The strategy executes only when the prospective risk to reward is compelling, targeting at least one unit of risk for three units of potential return (1:3)—put simply, for every dollar put at risk, the expected gain must be three dollars.
Trend
Opponent Process
B Process
The B-process acts as the internal “opponent” or counter-mechanism that aims to bring the body back to a neutral state of equilibrium. Unlike the primary reaction, the B-process is slow to start, rises gradually in strength, and lingers for a significant period after the stimulus has been removed.