Market Psychology


Principle 1: Markets are in a continuous cycle of greed and fear.


The element of human nature cannot be overstated. Behind every chart, ticker, or technical indicator lies a more powerful force: emotion. Markets breathe and pulse with fear, greed, anticipation, and uncertainty. This truth is what separates mechanical execution from true market understanding. A disciplined psychological framework is the architecture behind every successful strategy. The best traders observe, reflect, and act with detachment. They operate through a stoic lens, unfazed by the chaos around them. Your edge is grounded in reading charts and deploying strategies, but more importantly, in staying calm while others panic, and staying grounded while others chase.


“Be fearful when others are greedy, and greedy when others are fearful.” — Warren Buffett


Principle 2: Time and Risk are Two Sides of the Same Coin.


Markets are a function of time. Adapting a present moment awareness is crucial to being adaptable to the volatility of the markets. Letting go of ego attachment to a position allows a trader to quickly adjust strategies. This is especially true in the futures market, which is highly liquid and easily traded in real-time. Furthermore, in options trading especially, time is a weapon—and it favors those who understand its decay.  This is the logic of Theta, the silent force that rewards stillness, letting a trader collect massive premiums in the long run. Timing is a fundamental concept in growing wealth.  


Principle 3: The Product in the Derivatives Market is the Uncertainty Itself.


In the derivatives market, you accept the timeless nature of uncertainty, that is priced into all options and futures. With probability analysis and hedging, turn volatility into certainty backed by faith. The more volatile the asset, the more valuable the option. Risk is priced, and higher risk yields higher reward.



Pricing Models



Monte Carlo Strategy


At Luxsolis Investments, we integrate computational power with mathematics to simulate millions of possible outcomes of an option using the Black Scholes Model. These calculations use stochastic processes which take into account that stock prices don’t follow a fixed path but a probability-driven one. We assume Geometric Brownian motion: modeling the chaotic behavior of real prices. 

  "The Trillion Dollar Equation"                                                 

  Fibonacci Ratios                      


Luxsolis Investments uses Fibonacci ratios, to predict future prices. Fibonacci retracements are horizontal levels drawn on a chart to indicate possible support or resistance zones where price might reverse during a pullback. Fibonacci extensions are levels beyond 100% that help traders estimate where price might go after a breakout or trend continuation.


Retracements

  • 0.236 (23.6%)
  • 0.382 (38.2%)
  • 0.500 (50%)
  • 0.618 (61.8%) ← the “Golden Ratio”
  • 0.786 (78.6%)


Extensions

  • 1.272 (127.2%)
  • 1.618 (161.8%)
  • 2.000 (200%)
  • 2.618 (261.8%)


Fibonacci ratios are useful for setting up entry and exit points. By using these levels, quant trading is simple, allowing a trader to lock in profits by sticking to a numerical framework that removes the element of fear and greed from the equation.

Quantitative Algorithms


Jim Simons, the famous mathematician and hedge fund investor, integrated machine learning into Renaissance Technologies in the 80's, revolutionizing the market. Inspired by Simon's genius, we use quantitative algorithms that automatically buy shares at undervalued prices through Python.


Luxsolis Investments uses the scientific method to develop investment thesis: we observe a pattern, create a hypothesis and run experiments. Once analysis is complete, we deploy capital, and let our quantitative algorithm to do the heavy lifting and mechanics. Pattern recognition is our philosophy and we are currently running our "Circling the Sun" Algorithm.  Without fail, the earth will circle the sun every year, turning on its axis four times, to create the seasons. Observing this naturally occurring cycle, we created an investment fund that captures demand for products that are seasonally consumed. Once these equities are entered into a Python program,  we allow for the beauty of time and space to watch profits multiply.


 "Circling the Sun" Fund Current Holdings


Fiscal Quarter 3: July - Sept 2025, targets companies with increased cashflow in summer and "back to school" shopping months.


EPC (Edgewell Personal Care) - Banana Boat and Hawaiian Tropic Sunscreen 


MMM (3M) - Scotch Tape, Post-it notes


TXN (Texas Instruments) - Graphing Calculators 


NWL (Newell Brands) - Elmer's glue, Sharpie, Paper Mate, Expo


WMT (Walmart) - General back to school products 


TGT (Target) - General back to school products


AMZN (Amazon) - General back to school products 


Equities are entered into algorithm, which autonomously sells a put option and buys shares at each 10% decrease at three levels (Martingale Approach).