Guidance Overview Presentation

“Guidance” ,developed by IIGS, is a new, fully automated
Decision Guidance Technology to develop and execute trades
in the Financial Futures Markets which, when made available
to the public, is designed to Help Thousands & Thousands of
risk tolerant individuals set aside and trade a very small
fraction of their liquid investment funds at risk, with the goal to
significantly contribute to their overall amount of discretionary
funds as a result.

“GUIDANCE” is designed to change the way that
single individuals can “Trade with Confidence” in
the World’s Financial Markets with 21st Century
Technology

“One Minute and One Trade at a Time”
This is not an offerring or to be construed as a funds solicitation

Merrill W. Moses Charles Cortland Hooper
Mmoses@chowser.net rhoncor@earthlink.net
(858) 353-2001 (951)-600-8617
1

First, let us responsibly state the necessary obvious:

1. Trading involves significant risk

2. Trading is not financially suitable for everyone

3. Appropriate risk and tolerance for same is different for everyone

4. There are no representations that trading will result in a profit

5. Historical or simulated results do not guarantee or imply future success

6. One should only trade a small portion of their “risk capital” with money, the
total loss of which, would not alter their financial security of lifestyle

7. Responsible and potentially successful use of “Guidance” totally depends
on the individual being able to not commit even one of the “7 Deadly Sins”.

2

For those who trade now, why do 90% fail? …the “7 Deadly Sins”:

1. Not having a plan

2. Not treating trading as a business

3. Not having the necessary experience

4. Not trading consistently (i.e. have a systematic approach)

5. Not following (having confidence in) their system

6. Overtrading and risking too much (poor money management)

7. Letting fear override their judgement and constantly “Second Guessing”

3

So, why is it named “Guidance” (chose one or more)?:

1. One of the owners thought it was a cool name

2. It was designed by a former missile guidance engineer

3. It was designed to provide (*)guidance (direction) to the individual who:
• Has no system or wants to improve their system
• Has no plan or wants to improve their plan
• Wants to trade a system in which they can have confidence

4. Its methodologies (price targeting and tracking) are based upon the
concepts and calculation techniques of a heat seeking missile, honing in on
or backing off (guiding a missile to) its target as it constantly changes
velocity and direction

ANSWER: All of the above

(*) The individual still “pushes the button” by having the option to accept
(fully automate) or reject trades or use it to augment their own system 4

• Guidance has harnessed our Missile Guidance Engineer’s
“LIGHT SPEED” calculations and concepts like those developed for
“Anti Missile” technology , and added the “Thomas Edison” approach
(finding 10,000 ways a light bulb won’t work before “the light comes
on”) to create a “high probability target (price) capturing” system. And,
in the process over 45 years:

• Wrote MILLIONS of lines of code specific to our technical approach,
starting out with only calculators and hand plotting.

• Guidance today, utilizes the latest advances in “real-time” and
interactive computerized data acquisition, computing and automated
order routing in the USA , backed up by “on-demand” international
(German & Russian) support.

5

Getting a “Feel for the Markets”

In the early days of development of Guidance, it took an entire day to
hand calculate a couple of simple indicators and plot a years worth of
daily bars with the indicators…but doing so gave one A GREAT
EXPERIENCE in observation…one you don’t get these days when 10
years of data gets calculated and plotted in a couple seconds with
computers.

Data bases were hard to come by, and one punched IBM cards from
data printed the next morning in the Wall Street Journal (there was no
such thing as 1, 5, 10 minute data, etc.) and ran them on a computer
which took up a whole building and was less than 1,000th as fast as a
lame little NetBook today.

After tens of thousands of punch cards by hand and rooms full of
printouts, a number of conclusions emerged…..

6

Early Conclusions in the development of Guidance:

1. Taking the emotion out of trading (i.e. programming a reliable system
and automating its execution in the future) is essential to eliminating
“human risk” (the biggest risk of all).

2. Markets change, and the ability of a system to adapt with them is
essential to minimizing “system risk” whereby systems become
“curve fit” or “fingerprinted” to the past data studied .

3. Studying the nature and characteristics of financial series data in
general provides an invaluable context in which to view the live data
one is acting upon in real time….this is akin to studying the “nature”
of a disease (price characteristics) to better understand the
“symptoms” (price indicators).

7

Key processes in the development of Guidance:
While waiting for technology to provide the data availability (of things like
1-10 minute bars) and real-time automated trading (through electronic
market and exchange platforms), Guidance proceeded to:

1. Develop an exponential based formula which can simulate the
characteristics of financial data series. Over a number of years, it was
able to extract two key variables from actual price data in a series,
plug those into the exponential formula and create a “pseudo series”
which correlated over 95% to the actual price series. These variables
form part of the core of the key indicators used in Guidance, and give
the ability to validate and fine-tune these as real-time prices unfold.
They are unlike any others and definitely “outside-of-the-box”.

2. Using the exponential formula in the above way, combined with a
random number generator, Guidance was able to test its formularies
on millions of “manufactured” series which have, on balance, the
same characteristics of live series.

Note: For the past 2 years, the real-time results have closely matched
the results from the millions of “pseudo series” tested.
8

How Guidance Currently Operates:
Internationally interactive thanks to 21st Century Technology.

MultiCharts MultiCharts

Interactive
Brokers

Xview
Servers

Clients
Personal
Account

“Guidance” Accelerates Trades to Micro Seconds.
9

How Guidance Currently Operates:

1. 1 Min data is fed from Interactive Brokers (IB) into the MultiCharts
(MC) Trading Platform which then feed a battery of Excel
Spreadsheets.

2. One instance of Excel performs all the proprietary calculations
( since none exist and few can be calculated from trading platform
tool boxes or languages). The results are then fed back to MC to be
plotted and combined with other trading strategies to produce
signals to automatically be routed to IB and be executed.

3. Another instance of Excel, constantly and in real-time, performs a
Solver Optimization of the systems decision parameters in order to
identify the trend of the current bar which is part of the on-going
optimized solution. This , along with a continuous correlation of the
real-time “pseudo series” with the actual series, provides validation
and fine-tuning of the Excel output as it is fed back to MC

10

So what TYPE of system is Guidance?:

Systems generally fall into one of three main classifications (or variances thereof):
1. Trend Following: (following momentum of long term price averages)
2. Reversion-to-the-Mean: (acting on “extremes” on the basis that price, like a
pendulum, will ultimately revert to the mean position)
3. Breakout :(acting on the thrust of price breaking strongly through calculated levels
of short term support and resistance and riding it until it runs out of energy)

Guidance is a smart adaptive Hybrid of all three. Most program trading is oriented to
one only (usually Trend Following), since it is much harder (near impossible?) to
harness 2 or all 3 at once since price series morph into various states frequently with
marked irregularity.

The average time over the long term which markets spend in states conducive to each
approach : Trending: 15% Choppy or Sideways:50% Waves or Swings: 35%
System: (Trend Following) (Reversion-to-the-Mean) (Breakout)

It is not “Rocket Science” (actually by system design it is!) to try to mine all three
states interactively as they irregularly occur, as does Guidance.
11

Foundational Trading Goals of the Guidance Systems (in order of priority):

Guidance Vs.(*)___
1. Profit Factor (Ratio of Total gains/Total Losses) : 2.5 1.5

2. Win Loss Ratio (Ratio of Ave Gain / Ave Loss: 2.0 1.5

3. Win % (number win trades/ total trades): 66% 45%-55%

4. Maximum Drawdown on Equity (close basis): 2% 15%

5. Maximum Return for Risk (Sharpe Ratio): 1.5 1.1

6. Ratio of Max Win trade strings to Max Loss strings: 2.0 1.0

7. Percent of trading days profitable each month 75% 60%

8. Percentage of profitable weeks and months each year: 90% 66%

*These are typical “Dream” Metrics of the very biggest and best long term funds 12

Foundational Trading Principles of the Guidance Systems:

1. Enter a little LATE and Exit a little EARLY

2. Cut Losses and let Profits on big moves Run

3. Don’t take frequent positions in periods of LOW activity

4. Diversify trades through systems (trade frequency and entry parameters)

5. Maximize Risk-Adjusted Returns, not Net Profits

6. Always be in the Market (since most big moves launch from sleepy activity)

7. Trade fully automated executions only…no discretionary input

8. Minimize chance of ruin by committing only a small fraction of account
equity to total active positions, never risking more than 2% per position

13

So, WHAT gives Guidance systems a significant “Edge”?
1. It does not use the standard assortment of “toolbox” indicators that program
traders use. Thus, its entries and exits are unique and don’t compete for
microsecond execution advantages for its profitability, nor do they find
themselves “moving with the herd”.

2. It is in the market at all times so as to be in position when a large
move takes off.

3. It is totally adaptive to all market conditions and combinations of
trend, volatility, chop, and doldrums as the sensitivity of its indicators
“intuitively interacts “ with each 1 Minute bar it tracks.

4. It validates and corrects its course by running continuous real-time
Solver optimizations simultaneously in Excel while it tracks its
price targets like a heat seeking missile on its trading platform.

5. It “auto-tunes” to a manufactured data series calculated by an
exponential formula in real-time (extracting variable output from the
actual price series) which correlates over 95% with the actual series.
14

With an Edge in its design, what does it Measure in concept?
(variable look-back periods or constants for each vary by current bar values of “Light Speed”)
1. Volatility 2. Momentum 3. Distortion 4. Elasticity 5. Force 6. Mass
7. Acceleration 8. Light Speed 9. Turbulence 10. Trendiness 11. Waviness
12. Support 13. Resistance

…and what Strategies are employed interactively (variably) to activity?

1. Profit Targets set by 1 of 3 Market Stages

2. Stop Losses (fixed and trailing) set by 1 of 3 Market Stages

3. Break Even stops after certain initial gains set by 1 of 3 Market Stages

4. Selection of indicators based upon current performance of Equity Curve

5. Entries based upon profitability of Last Position

6. Trend Projection based upon net of cumulative profit and loss trade strings

7. Trading only with or against the Trend Projection set by 1 of 3 Market Stages in
combination with recent profitability
15

Results from Testing Historical and Real-Time Data

GUIDANCE has produced lab and real-
time results at or above our goals…

• 2.5-3.5 Profit Factor
• 68-90 % Percentage of Wins
• 1-2% Draw Down
• 1.5-2.5 Win/Loss Ratios

These Matrix numbers, in addition to our Dual Approach to
the IIGS’s financial security, is breath-taking:
1. Income to an individual can be multiplied by the number of
Contracts and Time Zones (licenses), and
2. Income to IIGS derived by the “Weaponization” (or
commercialization of the process by having thousands of
clients participate), is an incredible potential return.

The following slides show both Excel and MC graphs of the recent testing 16

Excel Code
Results Sheet:

Note the System’s
income for the
session and note sell
trajectories and the
movement of the
price index.

Six separate
systems are
combined for the
final system signal to
be sent to MC

Next, Note our “B”
Channel and the
price markers
breaking thru
causing a trade
signal.

Red Line:
@+1 =Sell
@-1 =Buy

Blue Line:
3 Hrs. of 1-Min
Price Bars

17

Excel SOLVER Technology & Representative Results.

Blue Line:
@+1 =Sell
@-1 =Buy 1 and 5 Hr. Results

Red Line:
5 Hrs. of 1-Min 19
Price Bars

System 28 (not tradable) and the income derived over 23 days & the Matrix numbers
1 Min Bars…24 Hr. Trading Main indicators from here go to the final system

20

Interactive Brokers (largest on-line Trader) and their CONNECTED auto trade System.

21

Multi Charts screen show profit trades (green lines) and Strategic Performance

22

System 61 Trend

Note:
• The Profit Factor

• The Percentage of
Wins

• The close to close
drawdown

• The win/loss ratio

23

System 61 Trend

Note:
• The Profit Factor

• The Percentage of
Wins

• The close to close
drawdown

• The win/loss ratio

24

System 61 Trend

Equity Curve

• Income/Profit

• Number of
Trades

25

Multi Charts
Screen.

• Showing price by
bar/ 1-minute

• The trades along
with

• Some of the
“Studies” used to
calculate the
trend and trades.

• System 28

• Indicators

27

A Very
Small
example
of 1/100
of the
code…

28

• GUIDANCE will create a DEMAND for Our Services like no-one has ever
seen before!

• The Companies Aim is for a Ten Thousand dollar ($10,000) monthly revenue
stream per license, all for a Five Hundred dollar ($490) monthly service fee
to the Company.

• How many people can we help like this?
– The company is NOT designed to make individuals UBBER RICH, But
to help the everyday person make a better living and sometimes just
make it a little bit easier to pay her or his bills…

• There is a Massive need for FINANCIAL ASSISTANCE in this country. But
without a New Practical approach, What are people to do?

• That is why we will limit the number of Contracts that a single person can hold to
Five (5). And with 3 Time Zones times the number of contracts that will be available is now
that TIMES the number of possible Commodities available (25 to 50) = a potentially very
healthy Revenue Stream to anyone. (See the BELOW potential income pages)
29

Guidance Overview Presentation

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