The Shorts got taken to the woodshed as another calendar move off a technical collided with short covering and some good manufacturing numbers sent the S&P to its best weekly move in 2 years. 

The damage wasn't too bad and in general this is the goal of our strategy.  In general, we didn't make any money and didn't lose any money.  Imagine we were simply a Long Only strategy, we most likely would have suffered through this with losses (or not in at all) while the Short strategy was up significantly, giving back its gains over a 5 day period.  In this case all types of systems ended at 0, but which would you have?  What if the market continued its slide?  If you can have a short strategy, combined with an options play along with the regular long play, you can benefit in any direction.

The discretionary test was a little disappointing, but version 3.3.1 of BladeTrader has been released and this last test was a large contributor to this version.  In general, we have reduced the strategy's exposure to risk volatility by putting in a better filter, a daily parabolic SAR (this is free on the internet to explore) and a custom designed TRIN named "TRI(ze)N" which helps make better entries.  The exits have been altered completely, eliminating any premature exits.  All backtesting produced better results, reducing drawdown, exposure, while keeping profits at or above their previously tested levels. 

The Short Strangle (short a CALL and PUT that "strangles the market" between two numbers) expires next week, though the CALL may get liquidated this week.

Look for some weakness this week unless government numbers come in really hot and look for the all important Non-Farm Payrolls on Friday.  Expectations are extremely low at this point, there is a lot of risk that a bad number, but better than expectations, will push this market higher to test the yearly highs as we postpone debt issues (Greece in 3 months, the US in two weeks) for a while. 

The system and "actual" are a bit out of synch largely because of the Japanese Tsunami and the subsequent adjustment of our hedging strategy. Additionally, we modified the contract count, increasing our beta against the S&P to 2 (in other words, if the market moves 1%, we move 2%) and then subsequently reduced it to 0.5 (or half the S&P) and as we profited, we profited less than we should have just to make sure the hedging and the system were performing as expected.  We need to push the system to find its weakpoints, and the Tsunami was a blessing in disguise.  If everything would have worked perfect, we're looking at 12-20% right now, but as it stands we're at 4% and this is about we were left off in March. 

The hedging system appears solid, risk is mitigated with covered CALLs/PUTs if necessary and the system has been upgraded this week.  We are now re-entering our phase and will push the system again.  This means a Beta of 2 or more.  We will be in the following instruments over the next week:

1)  S&P

2)  NASDAQ 100

3)  DOW

4)  EURODOLLAR

5)  TREASURY 10-YR

6)  GOLD

7)  OIL, CRUDE

8)  SOYBEANS

9)  FX EUR/ESD

This combination is weighted to the index, with some rates product exposure along with energy and aggriculture.

There is possibility to see $25,000 moves in our system, this is normal and represents the move that could have happened this week (7% move in S&P equates to 21% move in our system and would equal 21,000).  Unfortunately, you can't pick a top or a "good entry" point, you just have to dive in start from there.

From here on out, in our system, we will be maximizing our working capital, but that will require a Beta of 2-3 against the S&P.

We are less concerned with outperforming the market, and more concerned with Risk management.  If we do the latter, the rest will follow.  We have a choice, ride out the year and do 10% or push the system.

For accounts that we will manage, you will always be Beta 1 (but will be entering SHORT positions).

 Who would have thought that opening a trading account was this difficult?  It is, so don't worry if you're having some trouble trying to figure out everything. 

Step 1)  Open your own futures account with TradeStation

Step 2)  This is a Futures account without trading platform unless you want to trade the account yourself.

Step 3)  Don't worry about 3rd Party Authorization just yet

Step 4)  We will send a 3rd Party Authorization form to you from Trizen.

Step 5)  Fund your account

Step 6)  I will call you personally to walk you through the rest

So, in short, there is a lot of paperwork from TradeStation.  They do a good job over the phone, so if you have issues, questions, please call them to go over opening a Futures account. 

I will provide some "sample" documents for your convenience so you can follow along.  Think of it this way, TradeStation and other firms have dedicated buildings for opening accounts becuase it just isn't easy.