Published at Striker Securities, Inc.
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Topics on This Issue - September 1, 2005
Actual System Performance Summary
Bull Market in Grains for 2006
Volatility may pick up (Greenspan retirement, inflation prospects)
System Trading: Back in the Spotlight
Ready-Set-Go from longtermtrading.com


Striker.com provides comprehensive studies of each system, along with the real trading data.
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Actual System Performance Summary

The trading performance cited in the table below represents actual trading history of day-trading and swing trading systems at Striker, commissions included. For all trades listed, Striker holds the actual trading tickets. Reporting actual results of trading activity is a long tradition at Striker, and one that sets us apart in the industry. Our clients know they can view actual performance of trading systems, commissions included, in the client section of our web site. In the case of "split fills", we always report the worst fill. The percentage returns reflect the inclusion of commissions. Please note that past performance is not necessarily indicative of future results.

System Results Since Life at Striker * Developer**
ATS 3200 November, 2003 41.87% Charles Tanti
Axiom mini Midcap August, 2004 139.85% Lincoln Fiske
Axiom mini Russell June, 2004 8.03% Lincoln Fiske
Axiom mini Nasdaq August, 2004 16.12% Lincoln Fiske
Axiom mini S&P June, 2004 -33.76% Lincoln Fiske
BWT (Blue Wave) S&P June, 2004 26.57% Randy Sarrow
Compass January, 2000 258.32% Jack Telford
Dollar Trader November, 2002 84.38% Dave Fox
Helix S&P January, 2004 -8.01% Dustin Dubia
Impetus mini Russell December, 2003 36.59% Lincoln Fiske
Mesa Notes January, 2004 34.61% Barna & Ehlers
R-Mesa 5 May, 2002 89.08% Barna & Ehlers
RC Advance March, 2004 38.93% Rickey Cheung
RC Success March, 2004 31.46% Rickey Cheung
RC Swing March, 2004 -0.94% Rickey Cheung
Tzar Nasdaq January, 2004 49.24% Mike Barna
       
* through August 31st, 2005... Visit our "client section" to see all results in detail.
** Linked to System Developer Interview
New Interviews Added!!
- Mike Barna, Alan Pryor, Chuck LeBeau, Dean Hoffman, David Fox.

Bull Market in Grains for 2006

With oil prices hovering in the $70 per barrel range, will grains follow suit and begin a boom of their own in the coming year? There are some good reasons to think so. The entry of China as net importer in the global oil market in 1993 has been blamed for much of the current oil boom, and while China has reserves of her own, it will be a number of years before production and distribution are fully on-line for China to be able to make a dent in her domestic consumption. Higher oil prices have yet to translate into meaningful inflation worldwide, but with a number of analysts anticipating a return to 1980 price levels, can general inflation be far behind?

While grain markets tend to have a fixed supply cycle based on the Northern and Southern Hemisphere crop cycles, the fact remains that crop production is highly energy intensive. The Advertiser-Tribune, an Ohio newspaper, recently reported that “the price of natural gas accounts for 75-90 percent of the cost in the production of nitrogen based fertilizer”, and that “according to information from the Ohio Consumer Counsel, natural gas has been depleted because of an increase in demand that started in 2000. If the country has a cold winter, prices may increase. Increases in fertilizer [prices] have not been limited to nitrogen-based fertilizer.” It follows that farmers will have to make up the shortfall somewhere. But won’t higher energy prices put a damper on demand as global economies struggle against the headwind?  Not necessarily, at least, not in industrialized countries.

The FAO has observed that “downturns in economic activity in the industrialized countries as a consequence of oil price hikes are nowadays less severe than in the past”, in part thanks to energy efficiency and diversification. Brazil has emerged as a pioneer in this regard, having shifted a significant portion of energy consumption to sugar-based ethanol, somewhat shielding the agricultural giant from higher oil prices. However, in the global market, the costs of carry and transportation are all impacted by fuel prices, while demand for soy beans and other grains seems likely to increase in the coming years thanks to the emergence of the Chinese consumer as the new powerhouse factor on the global stage. Soybeans in particular look like a good play in the coming year; a casual glance at the ingredients of any given packaged food product on a super-market shelf will likely reveal the presence of soy lecithin, and soy products now figure in to a dizzying array of consumer and industrial products. Corn may also rebound in 2006 thanks to efforts by the US congress to bolster farmers in the Midwest during an election year, and increasing use of corn-based ethanol. While grains in general have lagged in recent months, it seems reasonable to believe that energy prices will likely jumpstart them in the coming year.

Contact Jeff Fosse: jeff@striker.com to discuss trading strategy

November Soybeans on CBOT (weekly)

Volatility may pick up (Greenspan retirement, inflation prospects)

There is a hot debate among investors currently as how the market will react when Fed’s Chairman Alan Greenspan steps down after 18-year stint as head in January. Will the monetary policy change under the new Chairman? According to Michael Woodford, a political professor at New York’s Columbia University, the next Chairman may tone down the “explicit” rate language adopted by the central bank over the past two years. Volatility usually rises when a major event like this occurs. For example, based on data compiled by Bloomberg, volatility rose for about a month when Greenspan was announced as Paul Volker’s successor.

The other volatility movers might include higher core inflation (excluding volatile food and energy prices), as the correlation between energy prices and core inflation has risen since the beginning of 2004. Another factor may be a flattening of the yield curve as the benchmark 10 yr Treasury note is currently yielding 4.046%, down from 4.69% at the end of June, the day the Fed started lifting its overnight inter-bank Fed funds rate from 1%. The current Fed funds rate stands at 3.5%, and the spread between the two is just 55 basis points. Inverted curves (lower long term rates, higher short term rates) have usually preceded recessions in the past. Volatility as measured by the CBOE VIX index still stands at historically low levels at about 14. As many investors know, trading system performances tend to improve with higher volatility. For example, the Compass S&P daytrading system returned 119.88% (as of August 31, 2005) net after commissions and lease fees in actual trading at Striker in 2002, at a time when the VIX was at 17 plus levels.

Compass S&P trading system actual trading results commissions, slippage included

  Profits Losses Wins Loses Trades Net Points Profit/Loss
2000 Results: $39,450.00 ($33,275.00) 22 32 54 35.50 $6,175.00
2001 Results: $70,400.00 ($52,950.00) 42 46 88 87.40 $17,450.00
2002 Results: $112,550.00 ($74,187.50) 60 53 113 176.05 $38,362.50
2003 Results: $63,170.00 ($54,825.00) 70 67 137 60.78 $8,345.00
2004 Results: $42,035.00 ($46,772.50) 60 60 120 5.05 ($4,737.50)
2005 Results: $43,225.00 ($31,325.00) 48 41 89 65.40 $11,900.00

System Trading: Back in the Spotlight

With the S&P 500 up 0.69% YTD (as of August 05), the Barclay CTA index down 1.87% YTD, and the CSFB/Tremont hedge fund index up only 1.92% YTD, a number of systems traded at Striker have performed quite admirably by comparison. For example, the Compass S&P day trading system, traded at Striker since the year 2000, is up 39.67%* based on an initial capital balance of $30,000, after commissions and system lease fees. The system has recovered nicely from its mid-2003 drawdown, and has returned over 250%* since it began trading at Striker five years ago. It can also be traded with the e-mini contract on $6,000.  For traders interested in a diversified approach to managed commodity investments, Striker now offers 12 months of actual trading data for the Vista Portfolio, a combination of systems developed by Lincoln Fiske of Trading Visions, Inc. The portfolio includes three different systems trading on differing logics, markets and time frames; encompassing the mini-Russell, mini-Nasdaq and mini-Midcap futures indices, it has returned over 15%* on the year based on an initial capitalization of $22,000, commissions and leasing fees included, and is up over 48%* since August of 2004. Investors interested in a longer term, multi-commodity approach may wish to consider the Axiom Long Term system by the same developer; contact Striker economist Martin Lembak for details (martin@striker.com). All of these systems owe a measure of their success to Striker’s expert team of system specialists who monitor and execute the trading signals on behalf of clients. Striker tracks over 40 different systems and trading strategies; chances are some of them will fit nicely in to a diversified investment portfolio.

*as of August 31, 2005.

What is New's --- Ready-Set-Go – From longtermtrading.com 

A Fresh Look at the Newest Futures Truth “Top Ten” System  

Earlier this year, Futures Truth, an independent trading system evaluation service, released the latest version of their “Top Ten Most Consistently Performing Systems”. One of the few new systems to be included on the list was the Ready-Set-Go system by longtermtrading.com. Although designed to trade a wide range of commodities, Ready-Set-Go has performed particularly well in the currencies and recently earned Futures Truth No. 1 ranking for the Euro Currency of the hundreds of systems they track.  

The Ready-Set-Go system is so named because it requires a very specific 3-part market setup action to enter the markets (1-Ready, 2-Set, and 3-Go). The system is a long term system that identifies and trades off of specific swing points for entry signals. It has a unique trailing stop based on a volatility-filtered channel, a percent profit retention stop, and a money management stop which are designed to maximize profits in strong trends while minimizing losses by largely avoiding the whipsaws of choppy markets.  

It uses the same completely nonoptimized system parameters across all commodity groups. A unique aspect of the system is the use of weekly bar data to generate entry and exits signals. longtermtrading.com, the developer of the Ready-Set-Go system, claims that use of weekly bar data makes market analysis more reliable because random price noise in the market is reduced.  

One of the other keys to the robustness of the Ready-Set-Go system is that the significant swing points for the entry points and the volatility-filtered channel size for the exit are all market adaptive and dynamically change based on the strength of the underlying trend. In this manner, Ready-Set-Go constantly and effectively changes its sensitivity to market price action in response to changes in a market environment. 

Ready-Set-Go position lengths extend from a week or two if you are quickly stopped out to up to 6 months or more in sustained trends. It averages about 3-4 trades per year per commodity and is only in the market about 50 - 60% of the time.  

The past several years have been admittedly trying for long term, trend-following systems. Many have shown net trading losses and even the profitable systems have been difficult to trade because of the huge equity drawdowns traders had to endure to be in a position to capitalize on the profitable periods. Ready-Set-Go has performed very well over the past several years while avoiding the steep maximum drawdowns seen by many other long term systems. To learn more about Ready-Set-Go, contact the system developer, Alan Pryor, or visit their website at www.longtermtrading.com. 

For more info and trading this system, please contact Striker's Dan Neenan: dan@striker.com

 

 

About this report The information and links on this website are for informational purposes. If you wish to be removed from this e-mail, please send a request to info@striker.com. The risk of trading can be substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Striker is a member of the National Association of Securities Dealers (NASD;, the Securities Investor Protection Corporation ("SIPC") and the National Futures Association ("NFA"). Please read Striker Disclosure Statement for the additional disclosure.

Warning The trading performance cited in this report are based on actual trading history, unless otherwise noted. The percentage returns reflect inclusion of commissions and fees, and this cost is calculated by multiplying the number of monthly trades by $50.00 for full size contracts, and $30.00 for e-mini contracts. The actual percentage gains/losses experienced by investors will vary depending on many factors, including, but not limited to: starting account balances, market behavior, the duration and extent of investor participation (whether or not a client takes all signals for a system) in the specified system and money management techniques. There is a risk of loss in trading. It is the nature of commodity and securities trading that where there is the opportunity for profit, there is also the risk of loss. Commodity trading involves a certain degree of risk, and may not be suitable for all investors. Derivative transactions, including futures, are complex and carry the risk of substantial losses. Past performance is not necessarily indicative of future results. Please read additional risk matters on our web site, www.striker.com. It is important you understand all the risks involved with trading, and you should only trade with risk capital. This communication is intended for the sole use of the intended recipient.

Striker is a revolutionary concept in action: an international, salaried team of brokers dedicated to trading only for clients. It bears repeating: unlike most other brokers, Striker does NOT trade futures for itself or any of its employees. This policy has been in place from the start in order to guarantee that our entire focus remains on the interests of our clientele. Striker believes that when brokers are allowed to trade for themselves (or have in-house trading practices) there is a strong potential for conflict of interest, as the broker may place more importance on his own trading activities (or that of his firm’s) than on those of his clients. Likewise, having salaried rather than commissioned brokers also helps ensure our “client only” focus; unlike salaried brokers, commissioned brokers all too often find themselves pressuring their clients in to making trades even if such trades are not in the client’s interest, just to make a commission. By putting our team of expert brokers on salary, we have eliminated this problem. Finally, Striker has no financial ties to system developers, so there no bias or pressure on how we report the actual trading results posted in our client section. This section is designed specifically for Striker's clients, so they may audit their results on a daily, weekly, monthly, or annual basis.