What is a Managed Futures Account?
A Managed Futures Account is a trading account where an experienced futures trader is given responsibility to make all trading decisions for your account. This authority is given by the account holder to the trader through a limited power of attorney which may be withdrawn at any time. These accounts are legally secure as only you can take money out of your account. These accounts may be suitable for risk capital and should be viewed as long-term investments.

By investing in a Managed Futures Account, you don't have to think about or worry about which markets to trade,  which pattern has the best potential, technical, fundamental or seasonal analysis affecting each trade, market timing, stop loss and profit targets, portfolio allocation, etc.

Basically you give the trader the right to trade your individual account while you still have complete control over your money.

Why a Managed account? - Personal
Any number of reasons could be given for an investor to give discretion to another for trading.  Two very common reasons  are that an individual does not have enough time to trade and failure of ones self to trade successfully in the futures markets.  Others open managed accounts for diversification in their portfolios. Other still open even if the are trading their own account for more diversification within the futures markets.

Why a Managed account? - Financial
One of the most uncorrelated and independent investments versus stocks are professionally managed futures. Unlike stocks, managed futures have the potential to prosper in up, down and even sideway markets! Managed futures can add profound diversification to an investor's over all securities portfolio. A study by the Chicago Mercantile Exchange showed that portfolios with as much as 20% with managed futures yield up to 50% more than stocks and bonds with comparable risk.

Does a Managed Futures Account lessen the risk in futures trading?
All futures trading involves risk. There is no method of futures trading that does not. This is true for individual, institutional and managed accounts.

Having said this, however, one of the things that should be looked for in a managed account is a long - term demonstrated ability to manage risks and recover from periods of loss. An ability to look past the day to day and sometimes even month to month swings within any given market. Discipline and money management are two keystones of a managed account.

How accessible are my funds in a Managed Futures Account?
Since the account is held in your own name, you have complete control over your account. You can add money, withdraw money or stop trading anytime you wish. A simple call or e-mail is all it takes.

On an daily basis, how will I know the status of my account, what is being traded?
You will receive statements directly from the FCM every time there is a new buy or sell activity in your account. You will also get a monthly statement so that you can see your net gain or loss for the month and your account balance.

Are Managed Futures Accounts appropriate as a short - term investment?
In general, No. As with most markets, futures markets tend to be cyclical. Moreover, even a trader who is highly successful over the course of a year may - and probably will - experience some months in which losses are incurred. This is where the discipline of an experienced trader may benefit the account the most. While you are free to close an account at any time, it may not be a prudent investment strategy to establish an account that you don't plan to maintain for at least one to three years.

I am already an experienced and successful futures trader. Why should I have a Managed Futures Account?
By diversifying with a managed account you are, in effect, constructing a diversified portfolio of your own. If you were to have a few bad months strung together, the loss could be offset by gains made within a managed account.

What evidence is there that including futures in an investment portfolio can improve total returns? And how does this affect the risk?
A study by Harvard Business School professor John E. Lintner found that including futures in an investment portfolio "reduces volatility while enhancing return". And that such portfolios "have substantially less risk at every possible level of return than portfolios of only stocks or only stocks and bonds".

A study published in The Wall Street Journal , showed how the addition of Managed Futures to a conventional portfolio of stocks, bonds, and Treasury bills increased return and reduced overall risk. It should not be assumed all portfolios including Managed Futures Accounts have had - or will have - the same or similar results. Investment performance is influenced by the structure of the portfolio, market conditions and the success of the trading advisor.

How much money should I invest in Managed Futures? Is there a minimum? In general, a CTA will require a minimum of ten thousand up to a one million dollar minimum. At CSC, we will accept accounts with as little as five thousand but for better diversification like to see a minimum of twenty thousand. Please see the breakdown chart for which amount will trade what.

What is a CTA, a Commodity Trading Advisor?
There is a category of Professional Futures Traders called "Commodity Trading Advisor’s" (CTA). There are about 1000 people who hold the designation "CTA", including David Duty and Steve Jerhoff. As a private investor, you can hire these people to trade your account. Before you do, you would receive a "Disclosure Document" which outlines who this CTA is, what he/she does, how they trade and so on.

What is the difference between a Managed Account Traded by Common Sense Capital and a CTA?
CSC offers only managed accounts traded by our staff. Between just Steve and Kirk they have over 35 years experience in the markets and the performance of the Suggested Trades on the Pattern Report speaks for itself.

At this point in time CSC is opting not to offer Managed Accounts through a CTA for the following reasons.

•  Lower minimums to open.
•  CTA’s charge a “load” for opening a new account, typically 4 to 10 % - most of which goes directly to the salesperson selling it to you!
•  CTA’s charge a management fee regardless of performance, typically 20 to 30 %!
•  CTA’s charge a performance fee; typically 20 to 30 % of any trading profits made which go back to the CTA!
• Note the last three reasons - this all comes down to less return to the client.

How will CSC trade my managed account?
CSC Managed Futures traders use their own proprietary trading methods. Both adhere to David’s belief that there is no “Black Box” magic system to the markets. While Steve is focused on fundamentals (particularly grain analysis), coming from a background in the cash grain markets, Kirk focuses mainly on technical analysis. Both have a strong belief in the seasonal tendencies of the markets. Between them they have over 35 years of experience and when discussing possible trades, both fundamentals and technicals are used together married of course with sound money management.

Sound money management is the bond which bring the two schools of analysis together i.e. A sound fundamental buy may be tempered by a key Fibonacci resistance level. Instead of fighting the markets, the key for their combined trading is finding markets which show affirmative signals for both traders and then acting upon their combined experience.

Investors can expect to see different spreads in their account, both short and long term option positions as well as the occasional straight future position. Hedging risk is important to both traders as is taking profit before a market turns.

Studies have shown that Managed Futures Accounts do experience an appreciably higher success rate than the individual amateur trader.