Philosophy

TRADING APPROACH

Our own statistical analysis of currency markets since 1998 indicates that relative currency returns based on daily and weekly market movements are characterized by low or negative serial correlation. In lay terms, currency markets tend to be “choppy”, “directionless” and “reversing” over short time horizons. For this reason, after establishing a well-informed view on the direction of a particular currency pair, the fund will scale into and out of positions. It is not inconceivable that the fund will hold multiple positions in the same currency pair. This approach allows the fund to avoid the difficult task of timing the market and instead accumulate positions in support of a view.

POSITION MANAGEMENT

Please note that the fund generally does not place stop loss orders when opening trades due to the information value it provides to dealers who frequently try to run stops during volatile or illiquid market conditions. An emergency stop of 500 pips is used in case of sudden, unanticipated risk events. Closer stops may sometimes be used on holiday trading days or as certain pending market action warrants. The fund’s trades are medium to long-term positions, with targets of usually 300-500 pips per trade. Low leverage is recommended in order to withstand potentially large swings.