EF Financial Services : EF X

Summary

Short term (intraday and swing trading) highly speculative, mainly trading US Indexes, but looking for oportunities in Bonds, Grains, Energy, FX all US Futures.

Investment Strategy

EF X is a short term proprietary trading strategy based on pure technical analysis. It primarily focuses on three simple setups: Continuation of the Trend, Possible Change of the Trend, and Sideways Pricing Activity. The last of these set ups evaluates certain market conditions in an attempt to determine when it might be best to stay out of the market and on the sidelines until a new possible trend might develop. Through these methodologies the EF X strategy works to combine Multiple Charting Periods based on market activity and Fibonacci numbers rather than exclusively relying on time. Doing this is EF X’s attempt to eliminate “noise” within price charts which is produced by inactivity in the markets. EF X also utilizes different Exponential Moving Averages as indicators on various charts to signal and identify potential trends. Here the longer period will be the Main Trend and shorter periods will be used to look for retracements in pricing. This creates what we call Price Average Compression which occurs at the Confluence of the Main Trend. When combining these proprietary factors, at the manager’s discretion a position is taken when it is believed there will be a period of trend continuation. In doing so the manager will attempt to follow a Main Trend and its corrections until price activity and EMA´s begin trading horizontally. When a trend begins to compress it should occur in shorter and shorter periods providing signs that market exhaustion might be at hand. Such signs may possibly signal the end of the current trend allowing for EF X to potentially benefit. By identifying when a potential correction might take place the manager should be able to exit the trade or make adjustment to stops in a favorable manner. When market exhaustion starts to appear over longer periods this will be seen as a signal that the Main Trend might be ending. Accordingly such a change could also signal a possible change of the trend altering the EF X’s view of the initial Main Trend. Usually within EF X positions will be held for a day or less up to several days depending on the lifetime of the signal. The strategy however tends to mainly focus on intraday activity.

Risk Management

EF X will attempt to use stop losses targeting 1% to 2.5% of the account value depending on many factors such as market volatility, Average True Range, and Contract Size. Please keep in mind however that although we will be using stop losses there is no guarantee they will be executed in a timely fashion. Accordingly there is no way to ensure losses will not occur, however we believe using stops is one of the best risk management tools available to the strategy. Conversely if the market moves in favor of the positions established by the EF X, the manger may adjust stops to a Break Even level in an attempt to further reduce risk on any specific position.