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Call us at 800.311.1145 to speak with one of our alternative investment specialists. We answer the phone in One Ring. Try It.Sign up to view performance on 100s of Managed Futures Programs, Trading Systems, and Managed Forex Programs. Sign up FREEWhat are Managed Futures? Is this the same as CTAs? How do I invest? Click here  to learn all of this and more on our extensive managed futures education pageHow to set watchlists? Build portfolios? Find correlations? and more. Click here to take a tour of our advanced toolsUse our most popular tool to create custom multi-program portfolios. Click here to get started today by signing up for FREE ACCESSClick below to learn how attain can assist your CTA in everything from back office creation and trade execution to finding a lawyer to create your D-DocNo upfront fees for managed futures funds is one of the unique benefits of a managed futures account at AttainOur alternative investment books list includes some of the most thought provoking and interesting books on alternative investmentsLearn how family offices outsource the managed futures research, due diligence, data collection, and ongoing monitoring of accounts to AttainWhat is a trading system? Who develops them, and how are they executed for client accounts? Our trading system education explains this and moreWe assist talented traders in getting their trading ideas into an automated trading system, do testing, marketing, and more

Attain's Semi Annual Top 15 Managed Futures Programs

July 26, 2010

 

We like to delve further into the statistics behind the rankings on our website twice a year to help answer that age old question: What’s your BEST managed futures program?  That question is always a tricky one, as depending on who is asking it, they may want to know any one of several variations on who is best. Best this month, this year? Best for all time? Best risk adjusted return? Best in terms of lowest Drawdowns? 

Our managed futures program rankings have developed over the years into a comprehensive tool which ranks commodity trading advisors (CTAs) across over 25 different metrics measuring performance, risk, experience, and more.  The rankings are designed to measure which programs are the BEST across several statistics, then see which are consistently among the top ranked on each set of rankings - and therefore the BEST overall.

This semi-annual newsletter highlighting the Top 15 in our rankings goes a step further, however; listing the Top 5 managed futures programs across several metrics, including YTD performance, total return, lowest Max DD, Sharpe, Sterling, Sortino, and length of track record.

We list the top 5 programs in each category to not only show who has done well, but also to show that there is much more to being top ranked than just last year’s performance. We are not content to merely show you the best performers this year or a list of the top performers of all time, and instead want the rankings to reflect the risk of the program, consistency of returns, and experience of the manager as well.

THE MANAGED FUTURES (CTA) PERFORMANCE IN THE FOLLOWING TABLES SHOW COMPOSITE PERFORMANCE AS REPORTED BY EACH CTA. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

We begin by looking at the number most people fixate on – Year To Date (YTD) returns – by showing which managed futures programs have performed BEST so far in 2010. This is unfortunately the measure most investors use to determine what investment is best for them, and the reason the year's hot system or CTA is usually regarded as the BEST. The downside to this analysis, of course, is that it ignores risk. A high return is nice, but at what cost. The BEST performers for the first half of 2010 have been the following:

 

Top 5 CTAs by YTD Return
CTA ProgramYTD ReturnInit Cap (000S)
Dighton Capital USA Aggressive Futures Trading 22.20% 100
Financial Commodity Investments (FCI) Option Selling Strat. 21.57% 50
Cresecent Bay Capital Management Balanced Volatility 19.00% 25
Clarke Capital Management, Inc. Worldwide 15.82% 250
Pardo Capital Limited XT99 Diversified 12.28% 1000

While discretionary trader Dighton Capital has been among the BEST so far in 2010, a simple change to looking at total return over the life of the investment quickly inserts other, more traditional managed futures programs into the top 5 lists, such as Abraham Trading and Hyman Beck, who despite below average performance recently remain big all time performers.  The BEST programs by Total Return have been the following:

 

Top 5 CTAs by Total Return
CTA ProgramTotal ReturnInit Cap (000S)
Abraham Trading Company 5523.51% 2000
Clarke Capital Management, Inc. Global Basic 2116.77% 50
Dighton Capital USA Aggressive Futures Trading 915.88% 100
Hyman Beck & Company, Inc. Global 817.91% 1000
Clarke Capital Management, Inc. Worldwide 808.55% 250

It’s easy to play devil's advocate when looking at the total return table and say how it unfairly treats newer programs and advisors. It admittedly takes a while to build up significant total return numbers, and for that reason looking at the compound rate of return may be more telling. This measure is more of a "what you might be able to expect" than a "what has happened" measure. And sure enough, you will see that the Best by Compound ROR includes "newer" managed futures programs (newer is relative in this case, with a 5yr old program newer than a 15 year old program) like Emil Van Essen and Pere.

 

Top 5 CTAs by Compound RoR
CTA ProgramComp RoRInit Cap (000S)Since
Dighton Capital USA Aggressive Futures Trading 38.72% 100 7/2003
Emil van Essen Spread Trading-Low Minimum 37.82% 500 1/2007
Pere Trading Group, LLC Pere Trading Program 36.24% 100 6/2005
Covenant Capital Management Aggressive 25.28% 250 1/2004
Financial Commodity Investments (FCI) Option Selling Strat. 24.90% 50 7/2004

Compound ROR = the annual ROR which, if compounded over the number of years in the period being analyzed, would yield the cumulative gain/loss for the program during that period

But what if we think of BEST not as the one that surpasses all others, but rather the one which is most suitable for me. The question in that case should not be, "What is your BEST Managed Futures program?" The question should be: "What is MY BEST Managed Futures program?", or in a more grammatically correct form: "What is the best Managed Futures program for me?"

To find which managed futures program is the BEST for you, a little soul searching is required. Are you interested in the absolute highest return? Lowest drawdown? Best mixture of the two, perhaps? Or perhaps you think the best managed futures program is the one which has been around the longest. There is surely something to be said for longevity. You will quickly find that different managed futures programs head many of these lists, showing that finding the BEST is an elusive target indeed.

To begin to filter things down, we must incorporate the riskiness of each CTA. Many investors look at Drawdown to get a feeling of the risk involved. But concentrating solely on drawdown is just as bad as looking only at return. For starters, a CTA could have a very low drawdown because it has only been trading for a short period of time. The BEST Managed Futures programs for 'lowest' maximum drawdown have been:

 

Top 5 CTAs by Lowest Max DD
CTA ProgramMax DDInit Cap (000S)
Mesirow Financial Commodities Low Volatility Absolute Return Strategy 1.07% 800
Mesirow Financial Commodities Absolute Return Strategy 1.56% 800
HB Capital Management, Inc. Diversified 2.80% 200
Greenwave Capital Management, LLC 1X 3.17% 1000
Pacific Capital Advisors, Inc. Vanguard 5.09% 300

But as nice as it is too see a low drawdown, low risk doesn't really help if there is also no return. We can always invest in treasury bills at 0.10% per year if we want zero risk. The next logical step, therefore, is to evaluate which programs have the BEST return per unit of risk. This is accomplished through the use of several risk adjusted ratios. The first of these is the Sharpe ratio, which measures returns divided by risk (as measured by the standard deviation of returns, or volatility). The formula actually uses the amount of return over the risk free rate. Attain uses a constant of 2% as the risk free rate of return in its calculations, despite the recent drop of T-Bill rates to near 0%. The Managed Futures Programs with the BEST Sharpe ratios have been:

 

Top 5 CTAs by Sharpe Ratio
CTA ProgramSharpe RatioInit Cap (000S)
HB Capital Management, Inc. Diversified 2.462 200
Mesirow Financial Commodities Absolute Return Strategy 2.044
800
Pacific Capital Advisors, Inc. Vanguard 1.340 100
Futures Truth Company SAM 101 1.220 200
Mesirow Financial Commodities Low Volatility Absolute Return Strategy 1.172 800

One of the problems with using the Sharpe ratio is that it punishes systems and CTAs for having a high upside volatility profile. For example, the Covenant Aggressive program had a 21.5% gain in February of 2008, which caused the volatility reading for the program to jump higher. But it can be argued that upside volatility is of no concern, as that means large positive monthly gains in the distribution of returns. Does it mean an investment is more risky if it has a huge monthly GAIN? Usually not - we think a huge monthly loss is much more important when measuring risk. There is a risk measure which eliminates the upside volatility skew from the Sharpe ratio by using the volatility of negative returns only. This measure is called the Sortino ratio. The BEST CTAs by Sortino ratio have been:

 

Top 5 CTAs by Sortino Ratio
CTA ProgramSortino RatioInit Cap (000S)
Mesirow Financial Commodities Absolute Return Strategy 8.264 800
Mesirow Financial Commodities Low Volatility Absolute Return Strategy 4.554 800
HB Capital Management, Inc. Diversified 3.861 200
Emil van Essen Spread/Index Program 3.596 1000
Covenant Capital Management Aggressive 2.347 250

The Sharpe and Sortino ratios have a flaw, however, in that they only view the volatility of returns as the main ingredient of risk. This speaks nothing of what sort of drawdown had to be encountered to get the return. As many managed futures investors can attest to, it is the drawdown period which represents the most risky part of the investment, not necessarily the volatility of returns. The Sterling ratio measures returns divided by risk (as measured by drawdown). The BEST Managed Futures programs by Sterling Ratio have been:

 

Top 5 CTAs by Sterling Ratio
CTA ProgramSterling RatioInit Cap (000S)
Emil van Essen Spread Trading-Low Minimum 1.706 500
NDX Capital Management Shadrach Program 1.403 100
Mesirow Financial Commodities Absolute Return Strategy 1.377 800
Dighton Capital USA Aggressive Futures Trading 1.365 100
Futures Truth Company SAM 101 1.335 200

One last piece if information it is important to take into consideration is the length of track record. The above tables have looked at managed futures programs with at least 24 months of data, but measures such as the Sharpe ratio are usually computed on at least 3 years of data. The shorter the length of a track period, the greater the margin of error in the statistics, thus how long a program and manager have been around means a lot. The longer someone has been at it, the more faith we can put in the stats. The BEST Managed Futures programs by length of track record are:

 

Top 5 CTAs by Length of Track Record
CTA ProgramTrack Record (months)Init Cap (000S)
Abraham Trading Company 271 2000
Northfield Trading, L.P. Diversified 253 2000
Hyman Beck & Company, Inc. Global 232 1000
Clarke Capital Management, Inc. Worldwide 175 250
Clarke Capital Management, Inc. Global Basic 174 50

So which managed futures programs are the best overall? It again depends on what you are looking for, but those which keep popping up in the tables above should definitely be candidates. We unfortunately do not have space to list the rankings for all 25 categories we look, but the ‘flag rankings’ on our website put all of these statistics together into a single mathematically derived ranking, with 5 flags the best down to 1 flag being the worst.

All programs are ranked in each category, and then an overall ranking is computed. So a program which is ranked between #10 and #30 in each category may very well be ranked higher overall than a program which is ranked #1 in a single category, but averages in the 50s to 100s for the rest of the categories. The programs in the top 20th percentile of all rankings are awarded a top 5 flag rating, with the ‘higher’ listed program amongst two five flag ranking programs the one with a better ranking.

Without further ado, the Top 15 managed futures programs monitored by Attain through the first half of 2010 are:

 

Top 15 CTAs
CTA ProgramComp RoRMax DDSinceMin Inv 000s
Mesirow Financial Commodities Absolute Return Strategy  14.97% 1.56% 6/2005 800
HB Capital Management, Inc. Diversified 15.71% 2.8% 3/2008 200
P/E Investments FX Strategy - Standard 12.96% 15.01% 10/2003 1000
Dighton Capital USA Aggressive Futures Trading 38.72% 37.52% 7/2003 100
Paskewitz Asset Management Contrarian 3X St. Index 20.92% 12.18%  12/2003 500
Pacific Capital Advisors, Inc. Vanguard 12.42% 5.09% 4/2007
300
Covenant Capital Management Aggressive 25.28% 20.41% 1/2004 250
Financial Commodity Investments (FCI) Option Selling Strat. 24.90% 34.63% 7/2004 50
Clarke Capital Management, Inc. Worldwide 16.34% 26.06% 1/1996
250
Emil van Essen Spread Trading-Low Minimum 37.82% 35.9% 1/2007 500
Mesirow Financial Commodities Low Volatility Absolute Return Strategy 4.55% 1.07% 6/2005 800
NDX Capital Management Shadrach Program 23.73% 13.67% 10/2006 100
Integrated Managed Futures Corp. Global Investment Program 16.35% 10.47% 2/2007 2000
Accela Capital Management Global Diversified 14.56% 18.26% 7/2004 1000
Hyman Beck & Company, Inc. Global 12.15% 29.27% 4/1991 1000

The tables above show who the best in each category was for the period ending 6/30/2010. The rankings are based on Attain's expanded watchlist (those programs on our recommended list plus those programs currently being monitored for inclusion on our recommended list), and do not include the entire universe of managed futures programs. Only programs with at least 24 months of data and minimum investments of $2 Million or less were included, and only a single program is considered amongst a family of programs in which all that differs is the leverage amount. For more on our ranking system, click here.

 

Important Risk Disclosure

The performance data for the various Commodity Trading Advisor ("CTA") and Managed Forex programs listed throughout this website are compiled from various sources, including Barclay Hedge, Attain Capital Management, LLC's ("Attain") own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors.

The reported performance is generally calculated as a composite of all accounts trading the same program. This ‘averaging’ of individual account performance can cause individual performance to be higher or lower than the reported composite performance depending on several factors, including the start date, commission and fee levels, and investment amount and duration.

Managed futures accounts can subject to substantial charges for management and advisory fees. The above numbers include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the performance of accounts under the CTA's management over the most recent five years. Investors interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

While the information and statistics given are believed to be complete and accurate, we cannot guarantee their completeness or accuracy. Attain has not undertaken to verify the completeness or accuracy of any of the information and statistics provided by third parties. As a term and condition of your use of this website, you expressly hold harmless and waive any claim you have or may have as a result of any of the information and statistics provided on this website being incomplete or inaccurate.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

 

IMPORTANT RISK DISCLOSURE


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Feature | Week In Review: Stocks, Energies, Commodities rally off July lows

A strong round of earnings reports and news of positive results from EU bank stress test led to rallies in some commodity related futures and helped spark a strong price increase in stock index futures last week. The week started with less than stellar earnings releases and worries about the pending Euro bank stress test on top of news out of Asia about the possibility of slower than expected growth, but as the days went by a long string of positive earnings reports held the selling at bay.

Market participants became fully engaged mid-week on economic news out of Europe indicating producer prices jumped at a more robust rate than expected which was then backed by the EU indicating only 7 out 91 banks failed their stress test. The number of failures was far less than anticipated which eased fears of further debt problems in Europe for the time being, although questions did arise on whether testing measures went far enough to root out sovereign debt problems which have been the harbinger of recent world market weakness. The end result for the week had Stock Index futures posting strong price appreciation throughout the sector with Russell 2000 futures +6.79% followed by Mid-Cap 400 futures +5.12%, NASDAQ futures +3.98%, S&P500 futures +3.53% and Dow futures+3.25%.

Energy price action received a boost from the world economic landscape change to a more growth oriented scenario, especially the jump in producer prices in Europe. The rally was aided further by a pending tropical storm in the Gulf of Mexico forcing oil companies to evacuate production platforms. For the week RBOB Gasoline futures added +3.46% followed by Crude Oil futures +3.40%, Heating Oil futures +2.20% and Natural Gas futures +1.00%.

Industrial Metals led the sector higher on news that the world economic situation may be firmer than originally thought which aided elevate prices. News of lower stocks levels in copper helped rally prices to levels not seen since February. The weekly performance had Copper +8.85% leading the charge higher followed by Palladium +4.05%, Platinum +2.03%, Silver +1.43% and Gold +0.10%.  

The Food and Livestock sector was mixed as the marketplace started to reflect a more fundamental picture regarding supply/demand scenarios rather than the recent correlated moves to the stock market. The grains were stuck in total weather mode with a drought situation in Russia aiding Wheat +1.82% and perfect growing conditions in the U.S. hampering Corn -5.60% and Soybeans -0.37%. Lighter supplies of livestock in the U.S. helped Lean Hogs rally +1.86% and Live Cattle add +0.75%. Sugar +6.72% was supported on the possibility of a supply deficit in the coming months with OJ +3.92% and Cotton following suit on pending weather worries. Cocoa -6.29% and Coffee -0.63% were pressed lower on news of better than expected near term supply.

Currency futures posted a very quiet, but mostly lower week as market participants seemed glued to the sidelines awaiting the Euro banking stress test results. The dog days of summer hampered Japanese Yen -1.01%, Swiss Franc -0.39%, Euro -0.14% and U.S. Dollar Index -0.04%. British Pound +0.86% was the lone bright spot as support stemmed from a string of better economic news.  

Price activity for Rate futures was weak as better results from the banking stress test in Europe sparked a greater risk appetite from investors who moved abroad for higher yielding investments. U.S. 30-Year Bond futures ended -0.77% followed by 10-Year note futures -0.69%.

Managed Futures

Performance in July amongst multi-market CTA’s remains mixed as a bounce off of the recent stock market/Euro lows has caused some issues.  Programs with a shorter-term profile seem to outperforming long-term trend following programs, but the performance across the entire sector has been mediocre at best.   Leading the list again this week is Applied Capital Systems at +4.57%.  With one week left to go it would be a big upset if this program did not hold on and take top honors for the month. In second place is the Dighton USA Aggressive Futures Trading program at +2.15%; followed by APA Modified +1.95%, Dominion Capital Management Sapphire +1.85%, APA Strategic Diversification +0.83%, GT Capital Diversified +0.42%, Hoffman Asset Management +0.40%, Auctos Global Diversified +0.36%, and Clark Global Magnum at +0.26%.

Multi-Market managers who are in the red for the month include Covenant Capital Aggressive -8.26%, Robinson-Langley Capital -7.18%, Clarke Global Basic -4.60%, Futures Truth SAM 101 -4.12%, 2100 Xenon Managed Futures (2X) -3.76%, Sequential Capital Management -2.90%, Integrated Global Concentrated -2.79%, Accela Capital Management Global Diversified -2.08%, Quantum Leap Capital -1.30%, Futures Truth MS4 -1.20%, Mesirow Financial Commodities Absolute Return -0.87%, DMH -0.80%, Clarke Worldwide -0.41%, and Mesirow Financial Commodities Low Volatility -0.40%.

After a difficult start to the month the option traders have picked up the pace recently. Top performers include Clarity Capital Management +2.32%, Cervino Diversified Options 2X +1.60%, Crescent Bay BVP +1.43%,Kingsview Management LLC  Retail +1.18%, Cervino Diversified Options 1X +0.74%, Ace SICP +0.57%, and Crescent Bay PSI +0.31%.

Option programs that remain down for the month include Liberty Funds Group Diversified Option Strategy -4.72%, FCI OSS -1.00%, HB Capital Management -0.40%, FCI CPP -0.12%, ACE DCP -0.10%.

In the specialty trading, currency traders P/E Investments Standard is up +2.00%, hog trader Oak Investment Group – Ocrant +1.68%,  agriculture specialist Rosetta is up +0.48%, hog trader NDX Shadrach is up +0.06%, NDX Abedengo is in the red at -0.13%, spread trader Emil Van Essen Low Minimum is down -0.14%, and treasury trader 2100 Xenon Fixed Income -0.52%.

Finally, short-term traders have had a very nice month thus far as the trade has been a reversion to the mean.  Paskewitz Asset Management Contrarian 3X Stock Index leads at +3.26%, followed by Roe Capital Management Monticello Spread +2.63% and Roe Capital Management Jefferson +1.89%.

Trading Systems

Last week saw many trading systems with good bounce back performances after a tough week the week prior, benefitting from the upward trend that took place in the equity markets.

Compass ES had a solid week of trading last week benefiting from the big moves on Tuesday and Wednesday. Compass ES got long mid day on Tuesday right before a 9 point rally in the S&P 500, then stayed in the market till about 20 minutes before the close and made $520.00. On Wednesday, Compass ES got short during the 10 point drop in the S&P 500 and stayed short till the close for a profit of $332.50. For the week, Compass ES made $852.50. Other positive results included BetaCon 4/1 ESX at $50.00, ViperA EMD at $264.34, NPI Traders CL at $276.70, BounceMOC EMD at $320.00, NPI Traders US at $470.00, PSI! ERL at $530.00, BounceMOC ERL at $642.50, Balance Point ES at $712.71, Upper Hand ES at $727.50, Beta-DT ERL at $1,190.51, and Compass SP at $4,250.00.

Waugh ERL had a decent week of trading but was held back by two bad losses that it couldn’t overcome. On Monday, Waugh ERL was short and was hurt by the rally that took place in the equity markets at the end of the day. On Tuesday, Waugh ERL got long with the rally and profited from that trade but on Wednesday Waugh ERL got stuck long during the selloff in the equity markets and gave back its profits from the previous day. The rest of the week Waugh ERL got long in the markets but wasn’t able to recover from the losses on Monday and Wednesday. For the week Waugh ERL finished at -$980.00. Other negative results were Clipper ERL at -$10.00, Rayo Plus DAX -$57.50, and EVP 1 US at -$685.00.

The swing systems also had a pretty solid week of trading. Strategic ES made a solid trade getting long near the open on Tuesday and riding the 3% move up till Wednesday morning where it took its profit of $1,257.50. Other positive results were Strategic NQ at $1,084.00, MoneyMaker ES at $1,120.00, Polaris ES at $1,470.00, Bounce EMD at $1,640.00, Bounce ERL at $1,750.00, Bounce Filter ERL at $1,760.00, AG Mechwarrior ES at $1,810.00, Strategic ERL at $2,749.17, and Strategic v2 SP at $6,325.00.

Jaws US 60 had a tough time last week, Jaws had the right idea by wanting to get short but it couldn’t time the trade right and kept on getting stopped out. For the week, Jaws US 60 finished at -$1,152.50. Other negative results were Moneybeans S at -$76.43, Waugh CTO ERL at -$90.00, and Jaws US 400 at -$623.75.

IMPORTANT RISK DISCLOSURE
Futures based investments are often complex and can carry the risk of substantial losses. They are intended for sophisticated investors and are not suitable for everyone. The ability to withstand losses and to adhere to a particular trading program in spite of trading losses are material points which can adversely affect investor returns.

Past performance is not necessarily indicative of future results. The performance data for the various Commodity Trading Advisor ("CTA") and Managed Forex programs listed above are compiled from various sources, including Barclay Hedge, Attain Capital Management, LLC's ("Attain") own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

The dollar based performance data for the various trading systems listed above represent the actual profits and losses achieved on a single contract basis in client accounts, and are inclusive of a $50 per round turn commission ($30 per e-mini contracts). Except where noted, the gains/losses are for closed out trades. The actual percentage gains/losses experienced by investors will vary depending on many factors, including, but not limited to: starting account balances, market behavior, the duration and extent of investor's participation (whether or not all signals are taken) in the specified system and money management techniques. Because of this, actual percentage gains/losses experienced by investors may be materially different than the percentage gains/losses as presented on this website.

Please read carefully the CFTC required disclaimer regarding hypothetical results below.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS.