MQ38 LLC : MQ38 Cumulus Fund, LP

Summary

The MQ38 system uses a unique proprietary method of market analysis termed Dynamic Market Analysis (DMA). DMA trades most liquid financial instruments globally and to various position types (directional long/short, long only, spreads,and arbitrage). The MQ38 system systematically implements a sophisticated risk management strategy in which daily volatility is targeted. The MQ38 system was developed by studying the price movements of hundreds of futures contracts, equities, and forward contracts, spanning over forty years of price data. Robust trading algorithms were developed to assess the system’s potential of reacting to market changes and generating consistent returns in the long run. The system operates entirely using technical analysis and does not apply any fundamental factors. As a mechanical trading system, it is believed that the MQ38 System contains all elements required to analyze market data and direct trades. Continuous research and development of trading methodology. Highly consistent trading performance. Low correlations to traditional investments and hedge funds.

Investment Strategy

- System Sells and Buys extreme weakness or strength with multiple reduced risk entries and opportunistic risk-off exits. - Positions are developed over the course of a few days to a few weeks and generally held for 2 to 18 days. -Swing system employs intraday risk with fixed dollar/percentage risk rules to take advantage of both intraday mean reversion setups in the morning and trend trade opportunities throughout the day. - Day trades do 1 to 2 trades a day per system and strictly enforce risk controls. Additionally, these systems seek to function as a risk reduction component for overnight risk. - Many market participants stop out or reverse at key points, materializing losses. Our systems specifically seek not to cover on a high or sell a long position on a low and employ other risk management techniques to ensure that at these points of very low risk we are adding risk not reducing it and materializing losses. -Our edge is ensured by a multi-metric/discipline approach. We manage trade entry as a distinct discipline. We manage trading directional bias as a distinct discipline and we manage risk-off as a distinct discipline.

Risk Management

Using allocation risk allows us to size positions relative to the riskiness in the market and add new risk when the odds significantly favor us, which usually is precisely when most people are risking out of trades.