Portfolio of Strategiesby Ed Downs

Over 25 years at Nirvana Systems, we have engaged in the relentless pursuit of automated Trading Systems that have steady, reliable performance in all market conditions. The discovery and development that I am sharing in this white paper is the outcome of this research. It’s a new kind of technology that is destined to change the way investors approach the market. The Golden Age

We have at our disposal some incredible tools that simply aren’t available any place else. It is as a result of applying these tools that we have been able to create a powerful new service for our customers.

OmniTrader is the only software in the world that is designed to facilitate advanced Strategy development through a “building block” approach. This software has made it possible to develop some very powerful Strategies. Strategy Wizard enables us to search combinations of Filters, Confirmers, and Trade Plan options to find robust sets of parameters that have an exceptionally high probability of success. And our ARM technology, available only to Nirvana Club Members, is also advancing. Recent ARM research in the Omni Trader University has begun to show promising results as Members have applied the technologies on ETFs and other instruments. This is truly the golden age of Strategy development at Nirvana Systems.

In Pursuit of the Perfect Strategy

For many years, our research has centered around building Strategies that generate solid performance statistics. We then bring these Strategies to

NirvanaClub Confi dential

Introducing OmniVest by Omni Traders International

h

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market for our customers. What we are ALWAYS striving for is a Trading Strategy that generates a steadily growing equity curve, with sufficient safeguards so that we have a low likelihood of encountering a large drawdown in our account.

Above is a chart of SPY (representing the S&P 500 index). Our Advanced Strategies have consistently beat the S&P by a huge margin. Look at the equity curve for NSP-41 on the next page over the same time. It performed famously through the bear markets of 2000-2002 and 2008-2009 – generating outstanding gains while the market was going down. However, we found that NSP-41 did experience a drawdown in the Credit Downgrade of 2011. What we would normally do is start testing filters and applying other techniques to eliminate that problem. But that introduces another problem. The more filters you add, the fewer Signals are generated. Strategy “B” (next page) is heavily filtered. It did well or (at least) did not give up gains in all of the different markets, but it trades rarely. Another approach is to develop NEW Strategies that perform well in specific markets. Strategy “C” (also shown on the next page) runs on lists of weak stocks and only goes Short. Look how well it did in all three bear markets.

The Portfolio of Strategies Concept

The Portfolio of Strategies concept is based on the fact that you don’t have to trade just one or two Strategies. You can trade many good Strategies at the same time. That way, you can take advantage of the

Market Corrections of 20% or more since 2000.

Subprime Mortgage Meltdown

Post Tech Bubble

Credit Downgrade

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strengths of each Strategy while compensating for their weaknesses.

You can further diversify by running the Strategies on different lists. NSP-41 was run on the S&P 100, while Strategy “B” and Strategy “C” were run on lists that have minimum overlap with the S&P 100. Now, imagine combining all three. What you would end up with is the composite equity curve shown at the bottom of this page. By diversifying with all 3 Strategies, we gained a significant advantage.

What if we had even more really good Strategies and could divide our account among them? Would that further reduce risk and improve returns?

This is the beauty of the Portfolio of Strategies concept – diversifying our trading across multiple Strategies to reduce risk and improve returns.

Introducing Omni Traders International

In 2010, I founded a new company called Omni Traders International to implement and deploy the Portfolio of Strategies concept. We designed a web system that could take the trades from individual Strategies and produce aggregated equity curves, like the one shown in this example.

NSP-41

CompositeEquity Curve

Outstanding gains with low drawdowns

Strategy C

Superb performance in all 3 bear markets

Strategy B

Consistent winner, but fewer trades (made less $)

Great Strategy, hit drawdown in 2011

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Daily Trade Updates

Select Your StrategiesEach day, we upload new trades from 100+ Strategies to deliver to customers according to their Strategy Portfolios.

Ongoing Research

OmniVest by Omni Traders International

Our Research Team continues the pursuit of the best possible Strategies to run in our OmniVest Service. Different types of Strategies are being tested and added based on performance.

Strategy Classifi cation examples:

• Reversion to Mean Strategies

• Classic Swing Methods• Breakout Strategies• Cycle Trading Strategies• And more…

We use various tools, including the Surface Plot in Strategy Wizard to identify the most robust settings for our Strategies and which ones to add.

Set AllocationComposite Equity

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For Total Automation, the Trade ProcessorTM

Manage Trades Simply and Easily with your Broker

The Trade Processor lets you monitor and manage your account, operating in one of 3 modes.

• Manual: User approves all trading decisions before trades are placed. (This is the default setting.)

• Semi-Auto: User approves new trades, but existing trade management is automated.

• Full-Auto: Trade Processor manages both entries and exits - automatically.

Trades are delivered by email or text for your review and/or to your personal Trade Processor.

Currently Supported Integrated Brokers• gxtrader• MB Trading• Interactive Brokers

Your Broker

From: OmniVestTo: John SmithSubj: New Orders

Trades & Positions for 8/6/2012

Order Qty Sym Price OPL/Order

HOLD 150 XOM 88.20 $325HOLD 625 FB 21.01 $605 HOLD 250 ELLI 25.78 $950 BUY 235 Dell 12.39 Stop LimitBUY 128 T 37.23 MOOBUY 25 AAPL 620.73 MOO

SELL 50 TXN 29.54 Limit

er

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We are also implementing a way to automatically manage the trades – a new automated trading platform called The Trade Processor.

We are now nearing the completion of advanced technology that leverages everything we have built over these past 25 years to create the OmniVest service.

The goal of OmniVest is simple: To provide a way for customers to easily engage a Portfolio of Strategies to achieve steady growth in their trading account while managing risk.

In addition to web and platform technology, we have been hard at work creating new Premier Strategies for use by OmniVest – Strategies that are designed to take advantage of specific market conditions and be integrated with other Strategies.

Targeted Portfolios of Strategies

Most of our current Strategies take advantage of the Reversion to Mean concept. Others that are being tested employ traditional Swing methods or are Trend-Following in nature. As we upload Strategies to the site, we will identify which ones are conducive to a particular kind of trading and assign them to these various Categories. Our goal is to build and test a wide array of Strategies using different, proven techniques.

The list used with a Strategy is just as important as the Strategy itself. In order to ensure that the Strategies aren’t generating similar signals on similar stocks, we sub-divide indexes like the Russell 1000 into smaller lists (e.g., Russell-1, Russell-2, etc.) providing yet another level of diversification.

The end result of this work will be a collection of Strategies that are sufficiently powerful to provide the ultimate in diversification and steady gains when combined into a single trading approach.

Strategy Performance

Here are simulated perfor-mance numbers for some of our current Strategies. Again, the power of this approach is you have not one but multiple Strate-gies aggregated into a single account, providing diversification across the different techniques.

We upload the trades generated by these Strategies to the website, which in turn generates equity curves and performance statistics, such

Simulated Strategy Performance displayed on OmniVest

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as Worst Drawdown, Profit per Trade, Accuracy, Compound Annual Growth Rate and additional statistics that indicate how well each Strategy is working. We expect to have well over 100 active Strategies on the site when we launch.

We will end up with hundreds of finely-tuned Strategies that take advantage of all sorts of market conditions. Normally, we would sell Strategies of this calibre for $1,000 to $3,000 each as we have in the past. But given the fact that most of our customers are individual investors with average account sizes, they couldn’t afford to pay $100,000 to $200,000 to purchase the Strategies. Fortunately, they don’t have to.

The Bottom Line: We are providing hundreds of thousands of dollars worth of Strategy research for a fraction of the cost by distributing the trades to our customers in a subscription model. And we’ve developed a simple and effective way to deliver the firepower of the Strategies to our users.

Easy-to-Use Website

Using OmniVest is extremely easy. Select a category, like “Reversion to Mean on ETFs, Long Only”, and review Strategies in that Category that meet certain performance criteria.

You can tweak the requirements to be more or less restrictive - for example, you can require higher accuracy or lower drawdowns.

As you select Strategies, you will see a composite equity curve generated for the collection of Strategies you are looking at. Change allocation within the Strategies to an optimal level, with the equity curve as your instant feedback. Then, SAVE your selections on the website.

Now all you do is wait for an email or text message with today’s positions and new trades. The servers complete their Strategy runs by 5p CDT, so there’s plenty of time to enter trades with your broker in the evening. Want more automation so you don’t have to place your trades each day? We’ve got you covered with a way to put your trades on autopilot.

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Introducing the Trade Processor

As the name implies, The Trade Processor “processes” trades. New Trades flow to the Processor from the OmniVest site each day, based on the Strategies you have subscribed to. You can connect the Trade Processor to one of our supported brokers.

In “manual mode”, you can review the new positions. As you authorize them , the trade is placed in your account. You can run in “semi-automatic” mode, allowing it to manage exits, or “fully automatic” mode, in which the Trade Processor will manage both entries and exits.

You will be able to paper trade with our online paper broker. Test OmniVest Service until you are comfortable with the results you are seeing. Then you can “flip the switch” and let it run. Our first Strategies are based on End-of-Day trading, but we also plan to release Real Time Strategies in OmniVest. Having a Trade Processor running ensures you won’t miss any trades. And you won’t have to remember to update them every day, because the Processor can automatically do that for you.

Powerful Trading Technology Nearing Completion

In all investment activities, diversification is one of the most important ingredients for success. With the introduction of OmniVest, we have created a trade management system that provides the ultimate in di-versity through the Portfolio of Strategies concept.

With a wide diversity of proven Strategies, OmniVest is ready to provide the kind of power that, to this day, has been reserved for hedge funds and institutions.

The OmniVest web service is scheduled to be released in Beta to early subscribers in September 2012.

The Trade Processor can be used for manual orautomated trading, or a combination.

Current Positions

List of Strategies

Global Allocation

Trade Log

All strategy results in this document are simulated using historical data. Past performance is no guarantee of future results.