BelAir Capital Asset Management : Managed Account Program

Summary

The program primarily involves buying and selling futures on United States regulated exchanges. The Advisor may trade options. The Advisor follows most commodity futures markets in the United States but focuses on currencies, financials, soft commodities, metals, grains, meats, agricultural products, stock indices, and other markets as the Advisor may determine in the future. The Advisor currently does not trade on international exchanges and does not trade FOREX, however there are no restrictions or limitations on what commodity interests or other interests the Advisor may or may not trade. If the Advisor decides to trade these markets and products, the Advisor will notify you before doing so. The average amount of funds invested for margin purposes at one time will generally be approximately 5% to 10% however, the percentage may be substantially higher or lower based upon the current market conditions. On the average, the Advisor expects the Program to trade 3,500 to 5,000 round turn contracts per $1,000,000; however, this average can fluctuate substantially based upon market conditions and volatility. Generally, when new client accounts are established, the Advisor will need approximately three to four weeks to initiate new positions or enter markets until the account is fully invested in the program. During this period, it is possible that the performance of new accounts will vary from accounts that have been existing in the program.

Investment Strategy

Trading Philosophy and Methodology The Advisor’s objective is to achieve capital appreciation for its clients through speculative trading of futures and options. In order to do so, the Advisor currently offers one trading program. Although the system is primarily technical and rule based, the Advisor does give consideration to available fundamental data in order to give the best risk/reward possible and therefore, will exercise a certain level of discretion over the program. Decisions on whether or not to act upon a trade signal depends upon a combination of technical timing and potential risk points associated with trades. Entry points are determined by the market itself. Market psychology and market action suggests that that the lowest risk time to buy or to sell occurs after a directional move (with the trend or counter to the trend) has been exhausted. Set ups for low risk entry into markets is associated with previous supply or demand price points (highs and lows). Once a potential set up point is identified, the market will move to confirm that a new high or new low has been established. The proprietary technical parameters used in association with the system determine at the earliest time when a high or low has been established. This method also helps in determining the risk associated with each trade.

Risk Management

Stop losses may be used in association with the risk points associated with the potential new high or new low. The use of stop loss orders are at the discretion of the Advisor. Further discretion can be used to enter or exit trades by measuring volatility, risk associated with a trade and to determine the validity of the setup points.