Investment Objective and Types of Transactions
The investment objective of this program is to offer investors a way to profit in the event of the devaluation of their domicile currency. Types of transactions will include spot foreign exchange trades based on a market indicator (explained below) with a negative bias towards the domicile currency.
It is recommended clients open 2 accounts, Euro Bear and Dollar Bear. Each account will have a bias toward the most traded currency pair, EUR/USD (One long, one short). The EUR account will have a bias short EUR, and the USD account will have a bias short USD. There are several technical reasons that these 2 strategies cannot be executed in the same account. The goal of the program is that by trading 2 market biased strategies, the composite will achieve a better result than if they were traded individually.
The Currency Bear Forex Program
Market Opinion
1. Market forces will drive the world’s central banks to competitive devaluation of their respective currencies.
2. No one can predict what will happen in the market (the markets are random).
Strategy Description
Low risk, multiple positions, high leverage strategy. Implemented on 3 interdependent crosses, where main cross (EUR Bear, main cross is EUR/USD) is offset (partially hedged) with 2 dependent crosses as much as possible. Euro Bear will have opposite market position of Dollar Bear.
Because of the design of the strategy, a floating drawdown may exist while the position waits for market conditions to change. When market is favorable, profitable situation will occur. This also means that the first month, and possibly longer, the overall composite equity will be likely negative for any new account coming into the program.
All currencies can potentially be traded in each program. This includes: AUD/USD EUR/CHF EUR/GBP EUR/JPY EUR/USD GBP/JPY GBP/USD USD/CAD USD/CHF USD/JPY. The strategy is not limited to particular currency pairs, therefore, any combination of currency pairs may be traded.
Features of this strategy:
• Low frequency
• High Leverage
• All partially hedged
This strategy has been extensively tested using real-time market data.
A proprietary indicator is used to monitor activities in the partially hedged environment. In the case of Euro Bear and Dollar Bear, the offsetting currency is CHF.
This strategy is designed as an augmentation to protect a natural position in assets denominated in currencies.
Simulated (Hypothetical) results generated in real time (not backtested):