We established Atlantic-Pacific Trading Group in 2010 based on the idea that a trend following system that managed risk with short option premium and volatility-based stops had a decent chance to make money.
Three lengthy, real-time simulations and our initial real returns have produced similar, positive results – and the verdict is clear to our satisfaction: the combination of riding a trend and time decay are powerful components of our Enhanced Turtle Trader program.
The Enhanced Turtle Trader starts with the trend following system as attributed to Richard Dennis and William Eckhardt. The returns generated by the Turtles have been widely reported and we have simply replicated their trading rules as closely as possible.
Trend following makes no attempt to predict future market direction. The basic proposition stands conventional market wisdom on its head. We buy new highs and sell new lows, within a qualifying framework of rules. Primary risk management consists of a trailing stop which is based on recent market volatility.
We have enhanced the basic Turtle program in several ways. First, we are broadly diversified across eight commodity sectors. We have also made minor adjustments to position sizing and timing of scale ups. Trend following produces positive returns only when markets trend. To help offset the risk of taking positions in anticipation of a trend which may or may not happen, we sell offsetting option premium. Risk is always strictly defined and, in general, we minimize unlimited risk and maintain unlimited potential gain.
We reject notional funding as an artifice that ramps up leverage for no particular purpose. Instead, we seek to deleverage to the extent practicable. Our minimum account size is designed to permit reasonable diversification and margin to equity ratio. We have eliminated the primary incentive to overtrade by not participating in commission revenue. With the exception of a nominal administrative fee, our revenue is entirely dependent on performance. We have no lock-in. We do require execution of a non-disclosure agreement (by the client) as to exact positions, but otherwise encourage any general description of our trading approach.
Further information, including our Disclosure Document, can be found at: www.AtlanticPacificTradingGroup.com