RISK DISCLOSURE STATEMENT

THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. IN CONSIDERING WHETHER TO TRADE OR TO AUTHORIZE SOMEONE ELSE TO TRADE FOR YOU, YOU SHOULD BE AWARE OF THE FOLLOWING:

IF YOU PURCHASE A COMMODITY OPTION YOU MAY SUSTAIN A TOTAL LOSS OF THE PREMIUM AND OF ALL TRANSACTION COSTS.

IF YOU PURCHASE OR SELL A COMMODITY FUTURES CONTRACT OR SELL A COMMODITY OPTION OR ENGAGE IN OFF-EXCHANGE FOREIGN CURRENCY TRADING YOU MAY SUSTAIN A TOTAL LOSS OF THE INITIAL MARGIN FUNDS OR SECURITY DEPOSIT AND ANY ADDITIONAL FUNDS THAT YOU DEPOSIT WITH YOUR BROKER TO ESTABLISH OR MAINTAIN YOUR POSITION. IF THE MARKET MOVES AGAINST YOUR POSITION, YOU MAY BE CALLED UPON BY YOUR BROKER TO DEPOSIT A SUBSTANTIAL AMOUNT OF ADDITIONAL MARGIN FUNDS, ON SHORT NOTICE, IN ORDER TO MAINTAIN YOUR POSITION. IF YOU DO NOT PROVIDE THE REQUESTED FUNDS WITHIN THE PRESCRIBED TIME, YOUR POSITION MAY BE LIQUIDATED AT A LOSS, AND YOU WILL BE LIABLE FOR ANY RESULTING DEFICIT IN YOUR ACCOUNT.

UNDER CERTAIN MARKET CONDITIONS, YOU MAY FIND IT DIFFICULT OR IMPOSSIBLE TO LIQUIDATE A POSITION. THIS CAN OCCUR, FOR EXAMPLE, WHEN THE MARKET MAKES A ‘‘LIMIT MOVE.’’

THE PLACEMENT OF CONTINGENT ORDERS BY YOU OR YOUR TRADING ADVISOR, SUCH AS A ‘‘STOP-LOSS’’ OR ‘‘STOP-LIMIT’’ ORDER, WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS, SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCHORDERS.

A ‘‘SPREAD’’ POSITION MAY NOT BE LESS RISKY THAN A SIMPLE ‘‘LONG’’ OR ‘‘SHORT’’ POSITION.

THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY INTEREST TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS.

ALL futures trading has risk and no guarantee of profits can be made through the use the RMS window. Subscribers do so at their own risk

The RMS Window

RK Multi System “RMS” Window

Overview

The RMS window is a multi system, multi analytic window that provides intra day traders with a wide ranging series of trading signals for entry and exit. The window is a combination of 32 different “shaped” signals designed to assist traders with the entry and exit decisions. The systems have trade ranges from a few minutes to few hours with some systems scalping smaller trade sizes while others look to ride larger trending moves. The window offers different filtering technologies including statistical streak based, Equity curve analysis and Trend avg analysis

The goal of the RK Sys window is to allow any level of trader the opportunity to participate in the intraday market. More experienced traders can develop higher level ideas while new traders can focus on the more simple concepts to find and execute different trading signals.

The RMS Window offers traders the opportunity to find entry and exit points based on mechanical system technology. All The systems have been re-created from actual Tradestation strategies so back tested results are available . Furthermore, the window offers traders the ability to filter ideas based on statistical data or trend based data.

About the RMS Window

The RMS system window contains two radar screen windows or tables. The radar screen tables are broken into a short system window and long system window, each containing 16 individual trading systems in indicator format this current build does not support automated trading) . Each line contains a unique trading system. The window contains three different type of strategies, choppy / sideways market, in-trend or trend following and counter trend. All data and signals are provided by the RK Sys ES Ind v1 indicator.

The strategies are also broken down into time horizon, with 6 - 3 minute systems, 6 - 5 minute systems, 2 - 7 min systems and 2 - 8 min systems. In general, the difference between the different time horizons is the type of cycle and range that the system looks to target. For instance, 3min systems tend to have smaller profit targets than 5 minute but have more trading occurrences or opportunities.

The RK Sys ES Ind V1 IndicatorThe current build of the indicator contains 16 columns. The columns on the left are more geared towards the price entry and exit points and position while the columns on the right are more geared towards helping the trader filter and select which signals they choose to follow.

Sys – this is the system name. it also will identify the type of system - chop, trend or counter trend (CT)

POS – this is current position value. When no signal has been generated, the column will be blank. When a short signal has been generated the POS column will show a 100 value in red, meaning that the system is short 100. The colour of the long signals will be cyan and will show a 100 when a long signal is present.

Entry- the entry column is the price that the system is looking to enter the trade the. When no POS value is present, the Entry price will appear, red for short trades and blue for the long signals. When the entry price is touched, the signal is generated and a POS value of 100 will occur

TGT – this is the target price of the exit price. This value is constantly updated until touched by the price. When touched , the POS will revert back to 0 or blank

NOTE ON ENTRY & TGT Entry and TGT values are dynamic and are the only points where the systems will enter or exit a trade. The systems to not use hard stops. WE highly encourage users to subscribe to the analytics window package of indicators as Trend Avg values can be used to help traders filter and stop out on trades. TrendAvg indicator values have been included in the last two tables to help traders with assessing point to stop out..

Open Prof – this is the open profit on the trade when position has been entered. It is based on 1 contract and shows the dollar value of the profit, i.e when the profit is 1.5 points, Open Prof will show $75.00

Trad-Time – this is the time that a trade has been entered.

Last TR – this is the profit of the last closed trade in points , not dollars (1.75 points = $87.5).

Trade History ColumnsThe trade history columns provide a trader information about how a system has done and possible opportunities. At the end of the document we highlight how a trader can anticipate a market /system turn by watch the trade history values.

L3 – this is the first of three trade history columns. L3 is the number of closed trades that we positive in the past three trades. A value of 3 means that the last three closed trades were all positive or winning trades, a value of 0 means that the last three trades were all negative or losing trades. When the value hits 0, the color of the number will turn red

L6 –this is the number of positive trades in the past 6 closed trades. Each system has its own unique setting to alert the trader based on value moving above a hi alert level or below a low alert level. When below a low alert level, the color will turn green signifying that the system is nearing levels are positive reversal. When the value moves above a hi alert level, the color will turn red, signifying that the strong run in the system is about to slow or stop.

L15 – this is the number of positive trades in the past 15 trades. See l6 for color coding of alerts.

TIP- when a trend a system reached hi or low alert level, it may be an early warning of an impending price trend change.

EQDay – this is the cumulative value of all trade signals for the day. This DOES NOT INCLUDE ANY SLIPPAGE OR COMM COSTS

Equity Curve DataEquity curve data is based on the performance of the signals. The idea behind following equity curve data is that systems will tend to perform well in certain environments and not in other. This is particularly true for trend following models. By following the EQ dif , traders can see when system if performing well or poorly. When the EQ dif is positive, traders know the system profitability is strong. Conversely, when the EQ dif is negative, traders can know the system is not performing well. Traders can filter signals by EQ dif, simply taking only those signals that occur when the EQ dif is positive and avoiding signals when it is negative.

Cont EQ – this is the 2000 bar equity curve of the system. The equity curve is the net profit loss of the signals generated by the system.

LRX EQ – the LRX eq is lagged average value of the continuous equity curve (Cont EQ).

EQ Dif – this is the difference between the continuous equity curve and the LRX Eq.

Tavg1 – this is the trendAvg indicator value. The setting is for this value is quick movement so this value will adapt much quicker to sudden movements in price. When price is below the color is red and green when price is above. This helps traders assess if they should be taking profit early or letting trending models run a bit. The cycle for this trend is typically 20-40 minutes

Tavg2 – this is a longer TrendAvg setting. This typical cycle for this setting is 1.5-3 hours. Same color scheme as above

Trading System Descriptionthe 16 systems are broken down in one of 4 types of systems, trend following, chop market systems and reverse trend and counter trend systems

Trend Following SystemsTRND Quick- the TRND Quick comes in both long and short and 3min and 5 min. The system is trend biased system, meaning that is tends to work best when the market is in a trend. The system gets in to trades quickly and gets out of trades quickly. Smaller cycle target size. Ideal to use when trend is really moving strong in one direction.

TRND Ridr – the TRND Ridr come ins both long and short and 3min and 5 min. the system is trend biased system, meaning that is tends to work best when the market is in a trend. The system gets in quickly to a trade but will try to ride the trade longer.

7M-IT and 8M-It – these system are trend following and tend to have the longest cycles and trade lengths.

SUCCESS RATES: 3m trend following systems tend to be 60% while 5 ,7,8 min and up tend to be 50-55% winning traders

Choppy / Sideways Market Systems CHP Quick - This is a very short term small range system. Will tend to produce the best results during periods of sideways market movement or when a turning point is occurring.

WIDE – wide systems are systems that tend to look for wider ranges to trade. They tend to do well when the market is thrashing with higher volatility.

7M-REV and 8 REV – these systems are reverse trend systems and tend to work well in sideways markets.

SUCCESS RATES: 3m trend following systems tend to be 63% while 5 ,7,8 min and up tend to be 65-70% winning traders

Counter Trend SystemsCT Trader – the CT trader systems come in both long and short and 3 and 5 min. The CT systems tend to enter into counter trend moves, generally looking for substantially moves before entering and then look for a relatively quick exit points.

SUCCESS RATES: 3m trend following systems tend to be 60% while 5 min and up tend to be 63-68% winning traders

The RK sys table is designed to allow traders of all levels of experience the ability to generate trading ideas and the ways of doing so are literally limitless. Below we have highlighted some different ways the trader can use the Emini Table for trading ideas. WE highly recommend that trader subscribe to out Analytics window package of indicators so that traders can utilize our Trend Avg technology for filtering.

Sample Trader Idea Strategies

Trend & Signal Trading

The trend and signal approach is the most basic approach a trader can use. This approach has very few steps. Traders, simply select a trend filter, moving av (although trend Avg much better) and then take the signals from the RK Sys. Traders will rely on the RK Sys to make the entry and exit decisions and will employ a trend based stop as well. The trend and signal approach centers around the idea that inside major trends, smaller trends last longer and offer a better risk reward profile that trends counter to major trend. The goal of this approach is the set the systems in line with a major trend, i.e long only for up trends. Below is the 5min TRND Ridr System in strategy form. See how the system does well when the price is above the moving average and not as well when it drops below.

Trend selection

When selecting the trends traders need to keep in mind the behaviour of the systems they are running. Often, wider systems will not enter trades until they negative side of the short term trades so choosing to follow the more active models levels is critical. Most traders should select the Master trend which is the widest and slowest moving trend and allows the most leeway for wider CT systems. The stop system will be the next system down, which is the cycle trend. this combination allows for the most opportunities for all the system to work

Advanced strategies

Traders can combine different tools to filter for traders. One method is mean regression or streak trading. Since we general know the success rate of the different types of systems, when the systems move too far to one side of success or failure, there is likely an opportunity for reversal of the system performance. As an example, in the chart below is the 5m TRND Ridr, which has a success rate of 56 % or 8/15. At point A, the L15 data had dropped to 4/15. This is an early warning to the trader that system may be due for a positive run and also that the trend is about to turn higher. In this case the L15 dropped to 3/15 but even if the trader followed the signals when it hit 4, the system reversed adding over 19 points of positive trade signals and the l15 rose to 12/15 meaning 75% success rate

Long signals taken on upside of moving avg.

A B