June 6th, 2014 - Issue #740

In This Issue

1. Featured Trading System of the month: SCORE by ExitPoints.com
2. All you need to know about the Mini Russell 2000
3. Economic Calendar

1. SCORE by ExitPoints.com

Developer's Page www.exitpoints.com

This feature below talks about a trading system, this system, like any other, may involve an inappropriate level of risk for prospective investors. THE RISK OF LOSS IN TRADING COMMODITY FUTURES AND OPTIONS CAN BE SUBSTANTIAL AND MAY NOT BE SUITABLE FOR ALL INVESTORS.  

SCORE is an intraday breakout system that trades from a portfolio of 20 futures markets .  The system trades only one trade per market per day and all trades are exited by the end of the day's trading session.

For SCORE, the average number of trades per month for the portfolio of 20 markets is 33 round turns, or about 1.6 trades per day (based on 16-year and 5-year studies).

This system is auto-traded based on a trading instruction file the developer sends over to Cannon Trading each day.  The file’s trading instructions are downloaded to a platform and auto-executed on behalf of our clients' accounts - under a letter of direction agreement.

Below you will see the results since we started trading this system live for clients at Cannon.  We  tested the system’s mechanics and monitored its results using a demo account for 3 months prior:

SCORE System performance (NET, for clients' live accounts trading the entire month's trades and after deducting commissions and system fee):

• January, 2014: +$2,200, trading one contract per signal ( final results)

• February, 2014: +$10,390, trading one contract per signal ( final results)

• March, 2014:  +$4,150, trading one contract per signal ( final results)

• April, 2014:  -$3127, trading one contract per signal ( final results)

• May, 2014: +$7395, trading one contract per signal ( final results)

** Past performance is not indicative of future results

Markets traded:

E-mini S&P 500  |  E-mini Nasdaq  |  E-mini Russell 2000  |  Mini $5 Dow Jones  |  Nikkei 225 (CME)    
 
30-year T-bonds  |  Euro currency |   Crude oil  |  RBOB gasoline   |   Heating oil   |   Natural gas  |   Gold  

Silver  |  Copper   |   Soybeans   |   Soybean meal   |   Wheat   |   Coffee   |   Sugar   |   Cotton

The Developer: 
David T. "Dave" Register attended North Carolina State University at Raleigh starting in 1965.  He initially majored in mathematics and eventually graduated with honors with a degree in physics and then earned a Masters degree in statistics in 1974. 

He began his professional career working for Lockheed and the Johnson Space Center.  After the first few years working on early projects, he was named a Principle Scientist - Lockheed's highest technical level.  He went on to design a management information system for NASA's Shuttle Program, and was appointed the manager of the Shuttle Tape Recorder Laboratory, which involved developing the computer program that recorded all the data, voice and payload data during the shuttles' flights.  He then became a founding member of Lockheed's scientists specializing in developing "expert systems" - the equivalent to artificial intelligence – which were computer programs designed to mimic the decision making skills of experts in a given field.

Along the same time line, Dave had been interested in stocks and futures as a private investor and in 1986, he read A. J. Frost's & Robert Prechter, Jr.'s Elliott Wave Principle, the definitive work on scientific wave theory.  In Dave's words, "All the skills in pattern recognition, statistics and expert systems that I had acquired were suddenly connected and applicable . . . "  That same year, Dave was hired by Robert Prechter to work at Elliot Wave International (EWI) and to head the EWAVESTM project, essentially programming an expert system based on Elliott Wave Principle, which is still utilized by EWI today.

After working on EWAVES continuously between 1986 and 1999, Dave spent nearly 4 years away from EWI, applying his years' work and experiences to trading futures and developing and building trading systems.  In 2003, he began his work with ExitPoints and in February 2013, he turned his full time focus on the trading systems at ExitPoints.  "All my skill as a statistician, knowledge engineer, and commodities analyst has been poured into the ExitPoints systems."

Additional information: 

This is a subscription-based trading system.  There are no "account management" fees and no percentage amounts deducted from profitable results.

Cost: $300 per month to trade all of the markets traded above with one contract per each daily signal.
  
Recommended account size: $45,000; minimum account size: $30,000

Forward and back tested results are available

If you like to get more information, interested in getting an email with the daily performance of the system, please fill out the form below:

Disclaimers: 

This trading system, like any other, may involve an inappropriate level of risk for prospective investors. THE RISK OF LOSS IN TRADING COMMODITY FUTURES AND OPTIONS CAN BE SUBSTANTIAL AND MAY NOT BE SUITABLE FOR ALL INVESTORS.  Prior to purchasing or leasing a trading system from this or any other system vendor or investing in a trading system with a registered commodity trading representative, investors need to carefully consider whether such trading is suitable for them in light of their own specific financial condition.  In some cases, futures accounts are subject to substantial charges for commission, management, incentive or advisory fees.  It may be necessary for accounts subject to these charges to make substantial trading profits to avoid depletion or exhaustion of their assets. In addition, one should carefully study the accompanying prospectus, account forms, disclosure documents and/or risk disclosure statements required by the CFTC or NFA, which are provided directly by the system vendor and/or CTA's.

The information contained in this report is provided with the objective of "standardizing" trading systems performance measurements, and it is intended for educational /informational purposes only. All information is offered with the understanding that an investor considering purchasing or leasing a system must carry out his/her own research and due diligence in deciding whether to purchase or lease any trading system noted within or without this report. This report does not constitute a solicitation to purchase or invest in any trading system which may be mentioned herein.

The risk of trading can be substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance is not necessarily indicative of future results.

Transactions in securities futures, commodity and index futures and options on futures carry a high degree of risk. The amount of initial margin is small relative to the value of the futures contract, meaning that transactions are heavily "leveraged". A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit: this may work against you as well as for you. You may sustain a total loss of initial margin funds and any additional funds deposited with the clearing firm to maintain your position. If the market moves against your position or margin levels are increased, you may be called upon to pay substantial additional funds on short notice to maintain your position. If you fail to comply with a request for additional funds within the time prescribed, your position may be liquidated at a loss and you will be liable for any resulting deficit.

2.   All About the Mini Russell 2000

The mini Russell 2000 has been gaining more popularity amongst day traders, it is more volatile and has wider ranges than the rest of the stock indices. The underlying contract for the mini Russell 200 futures is the actual Russell 2000 index.

Monthly as of April 30, 2014

Data in USD
The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000 is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.More about the Mini Russell 2000 index at: http://www.russell.com/indexes/americas/indexes/fact-sheet.page?ic=US2000

3. Economic Calendar

Source: Moore Research Center, Inc.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!