FAQ

How can I get started trading with your strategies?

Contact us for a brief email or phone/chat consultation. We don’t do “one size fits all”. Our investment process is usually custom tailored to an investor’s goals and risk tolerance. After a consultation, we will determine which system(s) or portfolio or products are best suited to help you reach your investment goals.

How do I actually have your strategies trade for me?

Their are two options. For professional investors who wish to trade with a licensed and regulated fund, we have an option to satisfy this demand. For those who cannot classify as professional investors we can offer certain strategies as a Managed Discretionary Account (MDA).

A licensed fund is a familiar product to most investors. The process is also quite simple for an MDA. You would open your own trading/investment account at an FCM (Brokerage House – preferably one of our recommended ones). You then grant us “trade only access” to your account, by using a Power of Attorney and Profit share agreement and this gets lodged with the brokerage. This enables us to deploy our systems on your investment account, and also engage in profit sharing with you. We cannot deposit or withdraw from your account, we can only trade on it. You can revoke our trading service at any time if you are not comfortable with our trading. This structure is called a Managed Discretionary Account, and it provides full transparency and control to an investor.

Is this available to people in every country?

There may be restrictions on some persons in some jurisdictions and this is usually based upon a fund’s or an FCM’s or Broker’s policies. Generally speaking, clients from OFAC sanctioned countries cannot open accounts at most brokerages. Please let us know where you are resident before deciding to participate. The information on this site is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Which strategy is best?

This is like trying to pick a favorite child. They are all unique in their own special ways, and each is specifically designed to profit in it’s own (non-correlated) way, separate from one another. Thus, these are really best used collectively as part of an investment portfolio as this helps reduce risk and smooth out the equity growth curve.

What are the profit goals for your algos?

Our goal is quite simple. To consistently beat “the market” with net returns over the long-term, with less risk, and less volatility. By market, we are referring to the S&P 500 given that it represents such a large swath of American and even global commerce. The average return of “the market” over almost 147 years is 7% per year CAGR. If you wanted to be generous and not factor in inflation, and if you reinvest dividends we can say that this is 9% per year CAGR.

What we know however is that the market is extremely volatile, and timing is critical, and one must invest for a very long time to earn these averages. Some years the market is up as high as 40% but other years it can drop that far as well and take many years to recover. This volatility is evident in the chart below.

So simply put, our goal is to out-perform the market’s CAGR, year after year, with less risk, and less market volatility. Although we cannot guarantee this, and past performance is never a guarantee of future performance, we have every reason to believe we can do this based on our strategy’s strong back models and live, real-market, forward performance.

What are your risk targets?

At the default risk profile, most of our systems are striving to keeping monthly balance and peak-to-valley equity drawdowns less than -15%. These levels can be customized on a case-by-case basis however based on risk appetite and covered with a hard equity stop loss. Generally speaking the more risk one is willing to assume, the greater the potential for higher returns as risk:reward are directly proportional.

What can I expect once I start using your strategies?

You can expect to see a combination of both winning and losing days, and winning and losing months. This is normal. We aim to have our winning months out number our losing months (or are bigger than the losing months) over the span of a year (this is obviously our objective), but there are no guarantees, and obviously we do have to contend with losing months as encountered in any investment.

This makes it tricky to “time the market” in terms of a good time to participate. Those who dive in, start to use the algos early, and let their funds compound over time and from month to month stand the greatest chance of success. In our experience those who try to time the market or jump from one shiny object to another chasing gains and running away from losses are doomed! Have the conviction to stick to your plan in the best and worst of performance times.

You can also expect regular updates and commentary on our systems. You can expect recommendations from us on allocation adjustments. You can expect full transparency and prompt communication.

Why do trades sizes and pairs differ so much when the systems trade?

This is because each program runs multiple completely independent strategy’s on each “system” and is managed by a master trade-controller. Generally bigger trades have higher probability rates, smaller profit targets, and tighter stop losses. Smaller trades have lower probability rates, and/or wider stop losses and take profits.

What fees do you charge?

We usually engage in a profit sharing model know as 2/30. This means we charge a 2% annual management fee (for setting up and administering our systems), and a 30% performance fee, based on “High Water Mark” profits (i.e., we only earn the performance fee if your account is reaching new highs in profit). Fees in the licensed fund products are slightly lower at 2/20.

High Water Mark Incentive Fees are paid ONLY on NET new rises in asset value. If a temporary decline occurs, it must be recouped before new incentive fees are paid. Thus – investor profits come first, and performance fees come afterwards. This is an investor-friendly provision that essentially prevents a manager from taking a performance fee on the same gains more than once. Performance fees are usually charged on monthly intervals, but can also be charged at different intervals and we have some flexibility on this which can be addressed on a case-by-case basis.

Can you give me an example of a High Water Mark calculation?

Sure. Here is basic example how it works using easy rounded numbers …

1.) When a Client deposits their initial funds, that balance becomes the first High Water Mark (HWM). In this example the Client deposits $100,000 USD.

2.) After 1 month the Trader/Advisor produces 10% in gross profit (for easy rounding in this example) which brings the Client account up to a gross value of $110,000 USD.

3.) $110,000 USD in equity, minus the last HWM ($100,000 USD) = $10,000 USD in new profit.

4.) In this example the Performance Fee is 30%. So 30% of $10,000 USD new profit is $3,000 USD Performance Fee (PF) which is payable to the Trader/Advisor/Signal Service.

5.) After paying $3,000 USD Performance Fee to the Trader/Advisor, the Client retains $7,000 USD of the profit. His account balance after paying the Performance Fee is $107,000 USD, which is then reset as the new High Water Mark for the following month. There will be no more fees charged to the client if the balance declines in value. Only if the trader/advisor makes profits and brings the account higher than the new High Water Mark of $107,000 USD.

What is the minimum Investment?

The minimum investment for the Multi-Index Portfolio is $150,000 while the minimum investment in most of the managed accounts is $25,000. This is because the system will trade the minimum position size for spot currencies (0.01 standard round turn lots of currency contracts) per these minimums of balance. Depositing below this will increase risk on some algos, but not all, and thus will skew risk dis-proportionally. Investing higher than the minimum will keep risk proportional to our reference accounts by the use of geometrical position sizing and money management.

What is the required leverage for these strategies to trade?

We recommend a common default leverage of 100:1 offered by most brokerages. .

Surely to generate above average returns, there is great risk involved. Is this correct?

Yes it is. It would be irresponsible for us to say otherwise. Because our algos utilize leverage and are margined products, they are considered “Alternative Investments”, and carry a unique type of risk that is often uncorrelated to traditional markets and may not be suitable for all types of investors (please see our Risk Disclaimer for more information).

We believe the key to a successful investment is exposure to enough risk to generate a decent return, but not so much as to give rise to sleepless nights. A disciplined approach and utilization of risk management technology, can be paramount in helping to restrict the risk and reduce the exposure to volatility in the marketplace.

Our systems have been designed to specifically mitigate against many different types of risk as efficiently as possible. We try to first and foremost clearly define, and then protect our downside risk using automated tools, and leave the upside open ended on a best efforts basis. Rest assured though – risk is still present! So do not use capital that your family needs, or money that is needed to pay your bills with these types of products. You need to find your ideal “risk vs. reward ratio” and comfort zone before investing with any type of investment, and algo based trading of CFDs in the spot markets are no exception to this. We strongly advise any users of our products to be responsible with their allocations, have realistic expectations, and don’t be greedy.

Are your algos sensitive to price data and execution?

About half of the algos are, and half of them are not. The scalping components are very sensitive to price action, latency, and good and rapid execution. Thus trading at a good brokerage with low fees, tight spreads, rapid execution, and low latency to our trade engine servers will ensure you receive you receive optimal performance. Without this, half of the algos will receive poorer performance than if traded at a preferred brokerage who specialize in servicing algo traders.

How do I know the results you publish are real?

We pride ourselves in always being transparent in the trading results we publish and will never publish a result without the proper disclosures explaining how it was generated (i.e., live money trading, demo trading, historic back models, or something different). We trade all of our systems live, on real money, in the real markets.

That said, we do not expect any person to “take our word for it” as trust is something that must be earned.

To address this, we now utilize 3rd party software verification utilities for our strategies. These verification utilities for our products have been phenomenal in their relevance. The two leaders in this space are Myfxbook, and FXBLUE. These are excellent utilities that verify the authenticity of trading performances, and that also update trading performance live, in real time, all while providing some very deep and detailed statistics and analysis tools. This is done by having their technology connecting to our trading accounts directly. Investors love these as a trusted way to follow and track performance and get easy and quick on-demand access to comprehensive statistics. These utilities are embedded in our website as “widgets” to both verify, and update gross performance, live, in real time.

Clients trading in any licensed fund products fall under regulatory oversight and protections.

What is available to satisfy my due diligence before I use any of your algos?

Please read through each trading program’s profile carefully and view performances via the 3rd party analysis and verification utilities mentioned earlier that are embedded on the site that we use like FxBlue and Myfxbook. If there is anything further we can do, please contact us and we will be happy to help answer any questions. It is important to remember that in the case of a Managed Account, your trading account is always yours, transparent, and liquid at all times. In the case of joining a licensed fund, you fall under regulatory oversight and protections.

In our experience, many people who may be new to this and who are coming from the traditional investment space often over-analyze alternatives, and do so improperly. We advise any paranoid or fearful users of our systems not to participate if it provides any feelings of discomfort. This type of product may not be suitable for all people. We are ourselves only looking to work with a small handful of professional users of our products who understand the risks and benefits of these and are comfortable with using them.

I see you largely trade currencies? Why is this an ideal asset class?

Yes we primarily trade CFD currencies, and commodities. The spot currency markets in particular (also called the foreign exchange markets or ‘Forex’ or simply ‘FX’ for shore) are massive, and have an estimated turnover of $6.7 trillion per day. This makes them the largest and most liquid financial market in the world – and this is very ideal for algo trading! By comparison, the New York Stock Exchange (NYSE) has a trading volume of approximately $23 billion per day.

The currency markets are also unique in that they are the only asset class that has never experienced an across-the-board bear market, or even a boom or bust cycle like real-estate markets. In our opinion, although volatile, the FX market itself is as close to “crash-proof” investing as one can come. This makes currencies a unique asset class for diversification. When one trader is down, another is up. Experienced participants can often find a profitable trend to ride somewhere in the foreign exchange markets, as long as they understand the key factors that move world currencies.

What is your edge/advantage?