EUROCAPITAL MANAGEMENT LLC. (herein, "ECM)

Trading Program Description

ECM's trading program is built around the strategies that Dr. Winkler has developed in the mid 1990's. These trading strategies are technical in origin,based on statistical computerized parameters and primarily trendfollowing in character, and are designed to identify short-term and intermediate market moves. ECM currently only trades the ECM-Eurofin System. The system serves aunique purpose and is applied to a diversified portfolio of commodities in a predominantly quantitative or mechanical fashion. Occasionally, discretion andjudgment, in general for profit taking, may be used if deemed necessary for riskmanagement purposes. A primary focus is on controlling drawdowns. ECM will generally commit less than 20% of equity to margin. However, on specialoccasions, this percentage may be substantially higher or lower. Daily tradingsignals are systematically generated by ECM’s computerized models. Each model must have a valid concept behind its trading logic and, prior to introduction,is tested in real-time using proprietary money. The key determinants of a model's suitability are its impact on our overall equity curve and its riskadjusted returns.ECM follows commodity futures markets worldwide and currently trades about 10out of them in its Eurofin Program. The following groups are represented at thistime in its Eurofin Program: Foreign Currencies, Interest Rates, Precious Metalsand Equity Indices. There are no restrictions or limitations on what markets ECMmay or may not trade. ECM will notify clients if there are material changes tothe trading program. ECM does not currently trade options on futures and has no immediate plans to do so, but reserves the right to trade options at any time inthe future. There are no restrictions or limitations on what commodity interestsor other interests ECM may or may not trade. Research is a crucial component ofour trading enterprise. This is an area where we feel that we excel. Our approach is quite different than that of most other firms, with the bottom linebeing hypothetical results on paper that we feel are honest and have a fairchance of being achieved in real-time. Thus far, our actual performance is matching our hypothetical test results.