Introducing the CTA is a weekly interview with a CTA that is listed on the IASG.com CTA Platform.

IASG.com: The most important thing to understand about a trading program is WHY it makes money. If you cannot understand the Why of a trading program you should not invest. Is it skill or luck? But before the why let’s start with a short definition of your trading program.

Gong Wu:  Established in 2005 in Ohio. Dendrich Ltd is a fund management firm focused on global markets. Currently, we have one fund for US investors and another similar fund for non-US investors. The firm and affiliated companies have a successful track record managing stock, futures and derivatives portfolios through various market conditions. The objective of the trading program is to provide long-term, consistent and positive returns by reducing market correlation through long and short trading activities.

IASG.com: What is your edge (competitive advantage/ inefficiency)?

Gong Wu:
The trading program incorporates the strategies, which are applicable for trend, range and choppy market conditions:

1. Making investments in securities, bonds, commodities and derivatives which the manager believes are undervalued, especially those with improving fundamentals.

2. Short selling of securities, bonds, commodities and derivatives, which the manager believes are overvalued, especially those with deteriorating fundamentals, or other factors which merit a determination of overvaluation by the manager.

3. Managing the relative weightings of long and short positions to reduce overall portfolio exposure to market volatility. *The risk of short selling is unlimited. We try to limit the risk by liquidating losing short positions. However, due to the volatile nature of the market we may not be able to accomplish this objective.

IASG.com: Why do you make money (economic rational)?

Gong Wu:   Find profitable market conditions and trade with discipline.

IASG.com: What is your decision making process?

Gong Wu: With the combination of fundamental and technical analysis 80% positions will be opened systemically according to the trading program and 20% positions will be entered based on advisor’s judgment.

IASG.com: Why are you able to make money also in the future?

Gong Wu: The trading program is flexible and adjustable to different market conditions. It has been tested and proved to be profitable in volatile market conditions.

IASG.com: Where did you learn what you do today? Did you have any mentors?

Gong Wu:  My trading has evolved from a variety of sources, such as internet, books, et al. The trading program was developed and optimized base on my knowledge, experience and systemic analysis of the market.

IASG.com: How do you measure and manage risk?

Gong Wu:  The risk control parameters are monitored at real time. Positions will be automatically liquidated or adjusted if market condition deteriorated.