How Jim Simons’ Trading Strategies Made 66% A Year (Medallion Fund Algorithm)

Jim Simons recently stepped back as the chairman of Renaissance Technologies, the asset management group that manages the most profitable fund ever: The Medallion Fund. What are the secrets and trading lessons of the Medallion Fund’s trading strategies? How has Jim Simons gotten a whopping 66% return on average for over 30 years? What kind of trading or investment strategies have the Medallion Fund and Jim Simons employed?

The magic behind Jim Simons’ trading strategies consists of collecting an enormous amount of data and analyzing the data to find statistical patterns and non-random events in a wide range of markets. Furthermore, Jim Simons and Renaissance Technologies have put together a hard-working and secretive team that generates plenty of testable strategies. The employees have skin in the game, and unfortunately for us outsiders, few of Medallion’s strategies end up outside their offices. However, most of the annual gain is a result of leverage.