The Trafalgar I/T Program trades a combination of S&P 500 futures contracts and NASDAQ listed technology stocks. The weighting between these two types of security varies but is normally one third S&P contracts and two thirds technology stocks.

S&P Component

The S&P component of the Trafalgar I/T Program is comprised of seven trading models that seek to profit from intra-day movements in the overall market (as represented by the 500 stocks that comprise the index). The seven trading models implement three different trading strategies: a volatility strategy, a range breakout strategy and a counter-trend strategy.

The volatility models calculate levels above and below the close of the market for a given day and use these levels as entry points for the following day. Each of the four volatility models has a different entry point for both the long and the short side which allows the Trafalgar I/T Program to scale into a position as the market volatility increases. The trading models have predetermined loss and profit points and all open positions are exited at the end of the trading day.

The range breakout models seek to capture a move in the market as it "breaks out" from an area of congestion. When the conditions within the two range breakout models that define a congestion area are met, the models recommend a position to "go with the market" as it breaks out. These models exit all positions at the end of the trading day in the event that their profit or loss levels are not hit.

The counter-trend model looks for the market to move too far in one direction and then abruptly reverse and begin to move rapidly in the other direction. As the direction of the market reverses the counter-trend model recommends a position to go with the reversal and seeks to profit from the market returning to an equilibrium.

The seven S&P trading models interact with one another during the trading day and the overall position of the Trafalgar I/T Program increases and decreases as the different models enter and exit positions.

Stock Component

The stock component of the Trafalgar I/T Program trades a portfolio of large cap. NASDAQ listed technology stocks. A volatility strategy, a range breakout strategy and a long-term trend strategy are utilized.

The volatility and range breakout models follow similar trading premises as the S&P models with the same names.

The long-term trend models seek to profit from prolonged moves in one direction (up or down) of the stocks the portfolio trades. The long-term trend models are designed to take a position and "ride out" a large move over a few days, weeks or even months. These models are the only ones in the Trafalgar I/T Program that hold positions over night and represent only a small portion of the total capital at risk.

Risk Management

The Trafalgar I/T Program incorporates a proprietary risk management strategy which adheres to prudent risk reduction practices by issuing precise stop-loss orders that accompany every order from a trading program. The risk management program monitors the performance of all trading programs to determine whether one or more is statistically under-performing historical norms as a result of prevailing market conditions. If this is the case, the risk management program temporarily removes one or more trading programs from the portfolio until suitable market conditions have reappeared.