Dear Fellow System Trader:
Your free trading system is enclosed. We call it the “25x25” Bond System. Please don’t be misled by the fact that this system was free. We think it is an excellent bond futures system that is very valuable. This system was recently developed to be used as one of several new systems to be traded in our managed account program that specializes in interest rate futures. Here is an explanation of why we have made this most unusual offer and provided you with this valuable trading system.

You have received this trading system as a sample of our work and an example of the type of systems we plan to offer for sale to members. We hope that you will carefully read the enclosed information and consider joining us and becoming a Charter Member of the System Traders Club. While the club is still in its infancy, your participation and input can help us to make this new organization as useful and valuable as we would all like it to be. Here are a few thoughts about what we have in mind for the future of the club.

As you may know from our book, COMPUTER ANALYSIS OF THE FUTURES MARKET, we are firm believers in the many benefits of trading on a systematic basis. However, good systems are not easily developed without years of experience and a thorough knowledge of the process and pitfalls. As you might expect, some knowledgeable professionals build good systems and never sell them, preferring to keep their trading methods a closely guarded secret. They look forward to deriving their income from trading their own capital or by operating as CTAs trading other people’s money. Another group of professionals build trading systems for resale; usually finding it necessary to charge thousands of dollars for each system to make up for the time and money spent in the development of the system and the substantial expense of advertising and marketing their systems in national publications and mass mailings.

We have been developing and refining trading systems for our own use since 1989 and until now have never made any of our systems public. From time to time we have tried to share some knowledge and helpful ideas at occasional seminars but we have never published or marketed a complete trading system as such. Now we propose to offer some of these systems to investors who prefer to do their own trading.

Since we developed these systems for our use in managing money, we were very careful to use logical methods that can easily be implemented in actual trading. We also include a generous deduction for commissions and slippage because we know we must encounter these costs in real trading. Because these trading systems were developed in the course of operating our CTA business, we have already expensed our research and development costs. With the development costs eliminated we intend to keep the cost of marketing the systems as low as possible so that we can offer the systems to members at prices far below industry standards. The System Traders Club will enable us to offer our trading systems to a select and knowledgeable group of traders without spending a lot of money on mass mailings and advertising to people who have no interest in ever buying or trading a system.

Unlike the popular book or record of the month clubs, members of the System Traders Club will not be obligated to buy any systems from us. Membership would simply indicate that you were seriously interested in systems trading and that you were interested in receiving periodic mailings from us describing the various systems we offer for sale. Because our systems will be sold at very modest prices we would hope that members will be pleased with their results and buy several systems over a period of time. (Why not use the “25 x 25” Bond trading system we have enclosed and if it makes money for you, use some of the profits to buy more systems from us.) Note: There is no assurance that this system or any system we offer will be profitable in the future. You should also be aware that futures trading entails risk of loss and is not suitable for everyone.

When we offer and describe a new trading system to our select group of club members, we intend to set new standards in truthful disclosure and client satisfaction. You can be assured that we won’t be offering any “holy grail” systems with promises of wealth beyond your wildest dreams. We won’t be offering any undisclosed black or grey box systems either. The details and logic of every system will be fully disclosed. We plan to “tell it like it is” and insure that our club members receive more than they expect from us.

We intend to start the disclosure before the system is purchased. Prior to
ordering a trading system we want our members to have a thorough and detailed understanding of the historical trading results and the logic behind each system. In addition to abundant and comprehensive historical test data we will be providing narrative comments about each system including our personal opinion of each system’s particular strengths and weaknesses. We will also include some suggestions on how the system can be customized or tailored to suit your individual preferences and give you a realistic idea of how much capital you might need to successfully implement the system. We intend to provide all of this information before you order any system so you won’t be buying an unknown system based on exaggerated performance claims and outrageous marketing hype. We will offer many carefully designed systems and our members won’t be expected to buy them all, just the ones that they can actually use and feel comfortable with.

In addition to an assortment of well researched trading systems we intend to provide our members with other outstanding services and benefits for free or at costs well below present industry standards. To make certain our mailings to members are welcome and not discarded into the junk mail pile, we intend to include articles containing useful information and knowledge about how trading systems should be developed, tested, analyzed, traded and monitored. We will also be discussing our newest systems and topics of interest relating to our personal system building procedures. Club members would be encouraged to send in articles, comments, trading experiences and to ask questions.

We would hope to use the newsletter to develop an interactive relationship with the club members and encourage their participation in educating and learning from fellow club members. We would expect that members would purchase and trade some of the systems that we develop and perhaps share their experiences and suggestions for improvements with us and fellow members. We also intend to provide club members with expert consulting, programming and custom built systems at reasonable prices whenever they need such services.

For the time being there is absolutely no charge to become a Charter Member of the System Traders Club. Furthermore there is absolutely no obligation to buy any products or services. However we do have a favor to ask: Help us to provide quality products and services that might be of interest to you by carefully filling out the enclosed questionnaire and giving us your best thoughts on how we can make the club most beneficial to you. Also please note that once the club is up and running we may have to limit membership or charge a fee to new members. Please take advantage of this window of opportunity and join now as a Charter Member while membership is free.

Good luck and good trading.

Chuck