METOLIUS DIVERSIFIED (2X) FUND, LP: Since the trading methods utilized by the Advisor are proprietary and confidential, the discussion that follows is of a general nature and not intended to be exhaustive. Any strategy used by the Advisor will generally be proprietary and confidential. There can be no assurance that the Advisor's approach to trading will yield the same results as it has in the past.
The Advisor will trade commodity futures and options thereon in many markets on most major domestic and foreign exchanges on behalf of the Fund. The markets in which the Advisor anticipates primarily trading include currencies, grains, metals, equity indices, financials and energies. The Advisor reserves the right to place trades on any exchange, foreign or domestic, at its sole discretion, on behalf of the Fund. The Advisor may also trade or invest in any other type of instrument that is now, or may hereafter be, offered for trading on U.S. or international exchanges or markets (whether regulated, over-the-counter or private) including, but not limited to debt instruments, forward contracts, spot contracts, options, swaps, and physical commodities.
The Advisor seeks to employ a portfolio of systematic market timing models that is diversified across asset class, technique, and time frame. The Advisor trades global exchange listed futures and options. Overall, the Advisor's trading systems are grouped into three categories: Category 1: Medium to long-term systems lasting from several days to multiple months. Category 2: Short term systems, lasting 1-10 days. Category 3: Global macro methodologies that all have trend and/or hard stop components for robustness.
The Advisor's trading systems use momentum analysis, unique original market analysis, fundamental factors, statistical factors, mean reversion and psychological extremes to make trades.
All of the Advisor's trading systems are systematic and non-discretionary. They include: 1. A technical based long term futures system that trades most futures markets and has trend following components. 2. A statistical based shorter term futures system that trades some of the more liquid markets. 3.) Global macro-based futures systems that trade on medium to long term time frames with an emphasis on robustness and price.
The development of a trading system is a continuous process and the various trading systems utilized by the Advisor may therefore be modified from time to time. The trading systems utilized by the Advisor are confidential and will not be disclosed to clients. This description of the trading methodology set forth above is not intended to be exhaustive.
Risk management is done on individual systems and at the portfolio level using maximum draw-down limits on a monthly as well as a yearly basis. Position size is automatically decreased as the draw-down increases. Please note that while the Advisor adheres to certain risk management techniques, there can be no guarantee that these techniques will be successful. Accordingly, no representation is being made that the trading will be profitable, or will not result in losses.