October was the month of the Premier Managed Account. The long-term trend following system caught the wave of the market the last 2 ½ weeks of the month to put up some impressive numbers of +18.2%. Believe it or not, the initial drawdown of 6% during the very first week of the month was where we added most of our additional position through dollar-cost-averaging. During times of correction prices are cheaper and the old school trading strategy of buy low and sell high was in play. Once the market corrected back to the long-term trend we saw profits stack up. The runs on the Euro against the US Dollar reaching an all-time high almost every week and the fresh highs on the Canadian Dollar against the British Pound and US Dollar were key participants in the high returns. The over all price activity of the market in October was actually very rough and choppy. When price is looked at on smaller time frames, the game wasn’t as bright. The On Target strategy found itself in a tug-a-war battle all month long with a good run the last week having the last four trades of the month hit all targets. The swings were very sharp and fast which caused trading to be less predicable on the On Target while giving the Premier Strategy the optimum timing to place new trades at lower prices. Is the On Target off base? Not at all. Price magnitudes of the market have returned to normal since the credit crisis back in August. The targets are right on in accuracy with some of our target 2’s predicting the tops of markets within a few pips. The culprit, however, was just 2 or 3 trades on the Yen crosses that took back a good portion of what was earned. In addition, due to the wild price moves of the overall trends we used lower lot sizing (Money Management) on the majority of the trades which minimized profit potential. Our finally number ended up with a profit of 3%.

The key and goal of the manage accounts at Pro Financial FX is diversification. The On Target and Premier work together in accomplishing profits in a strong diversified portfolio, when one lags behind the other takes the lead.

(Returns are based on Level III leverage. Past performance is not indicative of future results.) 

November Outlook

The month of thanksgiving looks very bright as large banks and corporations begin to stack their positions into the end of the year. The year of 2007 has formulated some very strong trends which in a nut shell are US Dollar weak. These last few pushes of searching for new highs will give the Premier strategy much opportunity to profit. The On Target as well appears to be back in its grove. The Yen currencies made a strong push out of their channeling habits the last week of October. This has opened up the roof to test highs reached back pre-Credit Crisis. Oil prices have been the key driver of the Yen currencies. The commodities market as a whole is very focused on Oil which will provide many swing opportunities on the Yen crosses in the weeks to come. We will be increasing the leverage on the Premier by 25% and will most likely maintain our standard lot sizing on the On Target more frequently instead of the reduced Money Management lot sizing. This should produce even greater returns in the coming months*. We are very excited at the opportunities at hand leading into November.