B G Asset Management LLC : Futures Trend Trading Programme

Summary

The aim of the Futures Trend Trading Program is to catch new trends or breakouts after periods of consolidation and ride the trend or breakout until profit targets are reached. The strategy is based primarily on technical analysis, backed up by fundamental analysis.

Investment Strategy

Once technical analysis reveals a possible floor forming in a down-trending market or a ceiling forming in an up-trending market, extensive fundamental analysis would be carried out to determine the reasons behind the new price action. If the fundamentals point to a sustained move, relevant levels of execution are established. These would be: Support, in a possible new downtrend or, in a possible new uptrend, resistance. An entry point below support or above resistance. A stop loss level to minimise risk in the event the trade fails. The stop loss level would restrict loss to no more than 2% of invested Capital. A take profit level, set at preferably three times, the stop loss level (where 3 times the stop loss level would not be feasible, 2 times would be used). A long order with a stop loss $1 below entry price would have a take profit $3 above above entry price. Executed trades usually last between a month to three months. As positions move into profit, the stop loss level is moved to lock in and protect some of this profit. Positions are closed by price hitting the take profit target, or in the absence of a sustained move, price hitting the stop loss level.

Risk Management

No more than 2% of invested capital is risked on each trade. Average exposure at any one time is 6% of invested capital.