B27 Capital FX Strategy A Multi-tiered FX Trading Program

Investment Philosophy

»  Long term compounded growth is achieved by controlling downside risk

 »  It is possible to systematically construct a strategy that will outperform its peers and other asset classes

»  Our goal is to achieve consistent long-term results through a disciplined trading process

»  Automated trading immediately capitalizes on opportunities across multiple pairs, throughout the global trading day  (Trading is 100% automated)

Strategy Overview

»  A multi-tiered quantitative approach to investing in Foreign Exchange markets, utilizing multiple time frames to maximize returns

»  Investment process based on 29 years of trading experience, with an emphasis on technical analysis

»  Holding periods vary from intra-day trades to multi-week exposure

»  Risk defined on any given trade allows the parameters for each signal to be controlled and measured, restricting the impact of any one signal

»  Sizing is controlled to ensure the risk of each signal, and the portfolio as a whole, remain within stated parameters

»  Returns have a low correlation to equity markets, bond markets, and the USD Index (DXY)

Investment Process

►  Strategy trades in the very liquid cash FX markets

»  Market is extremely liquid and able to absorb large   trades with minimal impact
»  Market trades independently of equities and other   markets

►   Two independent models provide signals.  Intra-day and daily strategies are designed to work together to maximize returns

» Each model manages risk with dynamic trailing stop   losses to   enhance returns while actively managing risk and   limiting losses

►   Position sizing and management is dynamic

» Positions are sized to normalize risk and minimize   oversized losses, with equal USD risk per trade.  There is a   pre-  defined maximum position size
» Positions utilize trailing stop losses to exit trades and   protect profits along with calculated targets to maximize   gains
» Strategy is 100% automated and can run without   discretionary input

Trade Signals

Model Logic

» Minor trends are identified using proprietary trend definition calculations in a shorter reference period

» Factors include: Momentum, Volatility, and Rate of change

» Trades can be generated multiple times per day, with dynamic updates to stops and targets throughout the trading day

» Holding periods vary from hours to multiple days. Designed to capitalize on shorter term price fluctuations within the broader trend

» Major trend identified using proprietary trend definition calculation

» Factors include: Momentum, Volatility, and Rate of change

» Signals are generated a maximum of once per day in each pair, with targets and stops updated on daily close. Will only enter trades in the direction of the broader trend

» Holding periods vary from daily to multiple weeks. Structured to capitalize on broader trends

Position Management

» Signals are generated in the direction of the major trend for the longer-term model and in the direction of the minor trend for the short-term model

» Signals are generated once per day for longer term model and potentially multiple times per day for the short-term model

» When trade criteria is met a signal is generated
» System calculates appropriate target and stop loss and will initiate trade of calculated notional amount
» Trade sizing is not static, calculating notional risk considering recent volatility and ranges

» Upon entry, targets and stops are set based on recent volatility
» System will automatically take partial profits as trade moves in the money
» The balance of the trade is managed dynamically with stops updating daily for the longer-term model and throughout the day for the shorter-term model

Risk Management

 Position & Portfolio Sizing

»  Trade size is determined by volatility and recent ranges.  Each trade will risk equal USD amounts, the notional size of each trade will vary (built into code)

 »  Maximum trade size can be limited, ensuring compliance with stated risk parameters for each trade and the portfolio (built into code)

 »  There is a maximum of 12 open positions, a Daily and Intraday component for each of the 6 pairs

Model Operations

 »  Strategy is 100% automated

 »  Daily strategy resets at 17:00, check all positions and verify trailing stops and new entry levels update properly

 »  At 17:00, 1:00, and 9:00 the intraday strategy resets and all positions, new entries, and trailing stop adjustments are verified

 »  Review each signal for accuracy and data errors. During the day, evaluate changing volatility and correlation of open portfolio

»  Total open position risk to trailing stop for total value at risk

B27 Capital FX Strategy vs. Eurekahedge FX Hedge Fund Index

*  2023 result is 3 months of calculated results (2.8%) and 9 months of live trading (20.52%).  Results for 2012-2022 are calculated returns.   All B27 Capital results are gross returns.
*  The Eurekahedge FX Hedge Fund Index is an equally weighted index of 9 constituent funds. The index is designed to provide a broad measure of the performance of underlying hedge fund managers who primarily trade currencies in the forex market.  Data is presented net of fees.


Returns Vs. Industry Benchmark

*  2023 result is 3 months of calculated results (2.8%) and 9 months of live trading (20.52%).  Results for 2012-2022 are calculated returns.   All B27 Capital results are gross returns.
*  The Eurekahedge FX Hedge Fund Index is an equally weighted index of 9 constituent funds. The index is designed to provide a broad measure of the performance of underlying hedge fund managers who primarily trade currencies in the forex market.  Data is presented net of fees.

Live Trading Statistics

April 17, 2023 – January 19, 2024

Principal Background and Experience – Scott Coughlin

B27 Capital LLC was started in 2020 by Scott Coughlin.  Scott has 30 years of progressive experience as a proprietary trader.  In each role, he managed and profitably traded a portfolio of currencies for the institution. 

» FX Trader

Traded Usd/Dem and Eur/Usd pairs for a proprietary book and facilitated trades for all bank customers.

» Portfolio Manager

Traded a proprietary book of spot FX and FX options.

» FX Trader and Market Maker

Traded a proprietary book of  spot FX currency pairs.  Facilitated customer flows in G10 currencies.

» Portfolio Manger

Proprietary trader, focused on G10 currency pairs.

» Senior Trader

Proprietary trader and market maker for all currencies, ranging from G10 spot to LatAM NDF’s.

» Principal

Trade a proprietary book, focused on G10 currencies.  Develop and trade successful automated trading strategy for FX.

Appendix and Disclosures

Performance Details


Risk Disclosure Statement

The risk of loss in trading Foreign Exchange (FX) 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 trade or authorize others to trade in the FX market, you may sustain a total loss of the initial margin funds and 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 required 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 such orders.

The high degree of leverage that is often obtainable in FX trading can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

In some cases, managed FX accounts are subject to substantial charges for management and advisory fees. It may be necessary for those accounts that are subject to these charges to make substantial trading profits to avoid depletion or exhaustion of their assets. The relevant offering documents contain a complete description of each fee to be charged to your account by the advisor.

This brief statement cannot disclose all the risks and other significant aspects of the FX markets. You should therefore carefully study this disclosure document and FX trading before you trade, including the description of the principal risk factors of this investment, as described in the relevant offering documents.

Hypothetical Performance Disclaimer

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 in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program despite trading losses are material points which can 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, all of which can adversely affect actual trading results.