The Striker Report - gold standard for objective trading research

Dean P. Hoffman

President of Strategic Trading Systems, Inc.

Program(s) Developed: Hoffman Asset Management

Interviewed by John F. Gallwas - Founder of Striker Securities Inc.

A follow-up to our May 2006 interview with Dean Hoffman, the President and Trading Manager of Hoffman Asset Management, Inc. (?Hoffman?), with offices in Mechanicsburg, PA. Hoffman is a registered Commodity Trading Advisor and member of the National Futures Association (NFA # 345235). Since 1987, Mr. Hoffman has been actively involved in systems trading and is also President of Strategic Trading System, Inc., a leading developer of computerized trading systems. The Hoffman Managed Account Program uses a multiple non-correlated technical strategy which is spread across (72 markets both domestic and international) all US futures markets and eight international futures markets. The program was modified on April 1, 2007, and is now being offered to investors interested in alternate investments through the Hoffman disclosure document dated September 17, 2007 This interview is for informational purposes only and is not intended to be a solicitation of any kind. Potential investors should read the above referenced Disclosure Document carefully before making any investment decisions.

John Gallwas: As mentioned above, your recent disclosure document says that you modified the original program on April1, 2007. Please tell us about the modification and why you believe it was necessary?

Dean Hoffman: I changed the way I managed risk across a portfolio. I began noticing that markets that should theoretically be uncorrelated can go through periods where they correlate highly with one another. This can create drawdown scenarios larger and faster than one would expect in portfolios seemingly spread out across uncorrelated markets. The changes I made were meant to mitigate higher levels of risk from unexpected potential correlation.

John Gallwas: Although there is only 5 months of results to evaluate, is the performance to date what you expected and what are your performance targets with the modified program?

Dean Hoffman: Certainly the performance to date has been good and yes, it is within the ranges of what I expected. The program?s goal is to earn average returns in the 35% range with maximum drawdowns under 15%.

John Gallwas: Walk us through how the program selects the futures contracts to trade as well as how investor?s portfolio is managed?

Dean Hoffman: The program scans over 70 markets every day and through a process of ranking narrows down a smaller universe of those markets to put ?on the radar?. Once the optimal markets are chosen it is then that a series of 5 different systems generate orders across those markets. There are also many layers of risk control. In fact, for approximately every ten trades generated only one of them is taken. The primary reason a trade is rejected has to do with unacceptable risk is one regard or another. After the trade is taken it is managed on a number of different levels, both individually as well as how it impacts the portfolio.

John Gallwas: Managed futures are becoming more popular for overall portfolio diversification. Tell our readers why your program may be a good fit for someone thinking about adding this kind of alternate investment to their portfolio?

Dean Hoffman: I believe that I have created a niche product for the smaller investor who wants the advantages of being able to broadly diversify over 70 plus futures markets. Typically a CTA who trades across that many markets would be expected to have minimum account sizes of a million dollars or more. Or, the other CTA?s that do accept smaller accounts typically are concentrated in far fewer markets or are involved in options trading only. By combining both a large diversified portfolio along with a smaller minimum account size I believe I have filled a huge void in the typical CTA offerings. The actual minimum account size I accept is a nominal amount of $125,000. Nominal account size is the amount that profits and losses are computed against. However, it is also possible to notionally fund the account with as little as $50,000. Notional funding allows you to trade ?as if? you had $125,000 in the account yet do it with much less funding.

This interview is for informational purposes only and is not intended to be a solicitation of any kind. Trade only with risk capital. The risk of trading can be substantial and each investor and/or trader must consider whether trading systems are a suitable investment.