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Jack Telford

Founder/President of Mariner Futures

Program(s) Developed: Compass, Tanker, Clipper and Phoenix

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

This is a follow-up interview to our March 2005 interview with Jack Telford, the founder of Mariner Futures and a registered Commodity Trading Advisor (NFA # 339212)) with the Commodity Trading Futures Commission.(CFTC).

By way of introduction, in 1986, Jack Telford, a computer science engineer and a professional software developer, began to apply his analytical skills toward developing a profitable trading system for the futures market. His research led to the introduction of Compass, a unique S&P day trading system that was introduced in 2000. The system has been profitable in all but one year since January 2000.

Consistent with our no-conflict policy, neither Striker nor any of its employees have any financial relations with Mariner Futures nor do we trade any of its products for ourselves or for Striker. This interview is for educational purposes only.

John Gallwas: What is the unique methodology used in generating trading signals that has allowed Compass (S&P and ES), despite the drawdown in 2004, to generate a total return of 274% from January 10, 2000 through August 31, 2006 on a $30,000 initial investment? Have you changed the system to try to avoid a 2004 repeat?

Jack Telford: Compass trades a very well documented recurring market pattern. Simply put, through the use of market internals like NYSE advancing issues, declining issues, up volume and down volume, Compass identifies days that are more likely to be trending days and then buys or sells a retracement against that trend in the early afternoon. As to the second part of your question, Compass is designed to be self learning. The drawdown in 2004 was directly related to the shrinking daily range in the S&P market. Up until 2004, the daily range in the S&P was over 16 points. During 2004 the daily range was reduced to just about 8 points. During the 2004 drawdown Compass retrained itself to deal with a significantly reduced daily range. Compass�s efforts were proven effective when it achieved profits the following year in 2005.

John Gallwas: Since our last interview you have introduced several new systems, one of which is very timely in that it trades the mini-crude oil market and is appropriately named �Tanker�. How does Tanker generate trading signals, and are you pleased with its actual performance?

Jack Telford: Tanker uses the same trading model as Compass, which basically is buying or selling a retracement against the daily trend. Point values, time of day, and gaps are areas that are handled slightly different from the original Compass model. As you know John, I�m one of the few developers that is attempting to make a full time living from trading my own systems. My original hopes for Compass were to consistently average about $5000 dollars a month in profit. Although Compass has been a great system for 7 years its equity curve has not been what I expected or predicted. I designed Tanker to average about $1000 a month in profits in an effort to smooth out my Compass equity curve.

John Gallwas: This year you also introduced a �Clipper� program that trades the Russell futures contract. What should we know about this system and its performance expectations?

Jack Telford: Again, Clipper is virtually a clone of the Compass model for the Russell 2000, with a few minor changes that deal with peculiarities of the Russell versus the S&P 500. Clipper�s equity expectation is $1500 a month and should also help smooth out my Compass equity curve..

John Gallwas: Your newest trading system �Schooner� will interest many of our readers because it is designed to trade the short-term international interest rates using the Eruodollar futures market. How does this system work and what are your risk / reward expectations?

Jack Telford: I designed Tanker and Schooner to help diversify my trading income away from just the index markets. However, due to the significant gaps in the foreign currency markets, the Compass model simply didn�t work for the Eurodollar. Schooner basically trades breakouts from consolidation patterns that occur after an initial significant market move. I would be happy with the Schooner model if it generated $1000 per month in profits.

John Gallwas: Do you personally trade your systems and, if so, is there any advice you can share from your trading experience with our readers?

Jack Telford: As you know John, every trader is unique, and by being unique they have their own expectations regarding their trading. My expectation is to generate a certain amount of income monthly from trading the combination of my systems.

John Gallwas: Is there anything in your �What�s New� file you can share with us?

Jack Telford: I continue to do research and development on a daily basis, and I do have a couple of day-trading systems in a 90 day beta test period. Unfortunately, as you know John, only 1 out of about 50 systems that reach the beta test phase actually meet the requirements of real-time versus hypothetical results.

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.