Disclosure

TAMI’s Domestic 2X trading program is a fully-systematic trading system that seeks to benefit from intermediate-term moves in a broad basket of futures markets traded on US exchanges or otherwise denominated in US dollars. The program utilizes one model which is uniformly applied to all markets traded. The program’s model utilizes a single entry method, although multiple risk-management exit strategies are used. The program is fully systematic, however TAMI’s principals on occasion may elect to reduce positions in order to manage program risk. Position size in the markets traded is derived from TAMI’s return and drawdown targets. The Domestic 2X program targets an average annual return of 30-50% with annual expected drawdowns of 20-30% and an occasional drawdown of 30-40%. This leverage is higher than many managed futures programs.

What the Domestic 2X Disclosure Reveals About Program Design

The Domestic 2X disclosure is notable for its explicit statement of return and drawdown targets together. Most trading program marketing materials emphasize return targets while minimizing or obscuring drawdown expectations. This disclosure states both: 30-50% average annual return target alongside 20-30% annual expected drawdowns and occasional 30-40% drawdowns. The relationship between the two numbers is the honest statement of what higher-leverage systematic trading looks like in practice.

The “uniformly applied to all markets” language is the systematic diversification principle stated precisely. A single model applied uniformly eliminates the parameter-fitting that would occur if different markets had different versions of the model. Uniform application across all traded markets is the structural defense against curve-fitting: if the model has genuine edge, it works across the full basket of markets without customization. If it only works for some markets with customized parameters, the edge may be a historical artifact rather than a structural feature.

The “single entry method with multiple risk-management exit strategies” structure reflects an asymmetric emphasis between entry and exit that Eckhardt explicitly endorsed: when and where you initiate a trade is a lot less important than how large you trade and how you liquidate. The single entry method is sufficient. The multiple exit strategies address the more important question of how to manage the position once it is established, across different market conditions and at different stages of the trend’s development.

The principal override provision, allowing TAMI’s principals to reduce positions to manage program risk, is the explicit acknowledgment that fully mechanical systems occasionally require human judgment for risk management purposes that the system’s parameters did not anticipate. Eckhardt made the same distinction: the system governs normal trading. Exceptional risk management requires human judgment. The program is honest about this rather than claiming full mechanization.

The higher leverage relative to many managed futures programs directly explains the higher return and drawdown targets. Leverage is the multiplier. The same systematic rules applied at 2x leverage produce 2x the returns and 2x the drawdowns relative to unlevered implementation. This is not a free lunch and the disclosure does not pretend it is. Investors who can tolerate 30-40% occasional drawdowns in exchange for 30-50% average annual return targets are the appropriate audience for this program.

Frequently Asked Questions

What markets does the TAMI Domestic 2X program trade?

A broad basket of futures markets traded on US exchanges or denominated in US dollars. The uniform application of a single model across all traded markets is the systematic diversification structure that provides exposure across multiple uncorrelated market dynamics simultaneously without parameter-fitting individual markets differently.

Why does the Domestic 2X program have higher drawdowns than most managed futures programs?

Because it targets higher leverage than most managed futures programs. The 2X in the program name refers to the leverage level relative to a standard implementation of the same systematic rules. Higher leverage amplifies both returns and drawdowns proportionally. The 20-30% annual expected drawdown and occasional 30-40% drawdown are the risk profile that corresponds to targeting 30-50% average annual returns through higher leverage.

What is the significance of a single entry method with multiple exit strategies?

It reflects the correct emphasis on exit management over entry timing. The single entry method fires when the entry condition is met. The multiple exit strategies address how to manage the position across different scenarios: a normal adverse move within a continuing trend, a trend reversal, a volatility spike, and a drawdown that exceeds the defined risk limit. The exits are where position sizing and risk management are most consequential for long-run performance.

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