Trading Program
ECM's The Eastern Alpha Absolute Return Program will utilize a combination of technical market analyses, the interpretation and analysis of economic and other fundamental data, and use of discretion by an experienced Advisor.
The Advisor will trade most of the liquid G3 interest rate futures (eurodollar futures, euribor futures, euroyen futures, note futures, bond futures), currency futures, and equity index futures. The advisor does not initially plan to trade options on futures contracts and energy, metal, agricultural product futures but reserves the right to do so at a later date.
The factors considered for trading are price trends, market patterns, technical indicators such as trend lines and moving averages, government and central bank policies, economic announcements, fundamental commentary, and inter-market analysis.
In general the Advisor tries to locate points where to buy in markets that have fallen and where to sell in markets that have risen. By this the Advisor is trying to buy when prices are low and to sell when prices are high. This approach is trend anticipating but not really counter trend. When a position is established the Advisor lets the profits run and exits when the market gets to a point where a reversal in the trend could be expected.
The Advisor has discretion in which market they want to establish a position. The fact that the Advisor is monitoring many different markets does not mean that he is always invested in different markets. It is possible that the Advisor will invest only in one market where he sees the highest reward potential. Often the Advisor will establish positions at different times and price levels in one single market. The Advisor in general is looking at extreme points where he thinks the market will turn. As these extreme points are only reached occasionally, the Advisor establishes a part of the position at an earlier moment. If the market reaches the extreme point, the Advisor will then establish the full position, thus it is actually good for the Advisor if the market goes first against the smaller position, so that he can get fully invested.
The manager uses money and risk management. If the market goes to some extent against an existing position, losses will be limited. The Advisor is not using fixed stop losses (i.e. as a percentage of capital) but will determine from the charts, when a position has to be exited and losses have to be realized. He will rather look at the time frame and determine in that window, if the trade is still good or has to be exited. However, prudent money management will be exercised at all times to prevent substantial losses that may be devastating to the future trading activities.