Frequently Asked Questions
How do I know this is not a scam?
We encourage all of our potential customers to perform their own due diligence. We believe in full transparency, and share our results openly on our website. This includes putting statements from an individual trading the algorithms on our website. We are registered with the BBB (A+ Rating) & are Rip-Off Report verified. Individuals from Rip-Off Report actually visited our lead developer at his home office – interviewing him in order for us to receive the final “Verfied” status. In addition, we’ve been reviewed by a well known blogger who reached out to our company some time ago without us knowing. This blogger is known for his very harsh criticism of trading system vendors. In the end, he gave us 4.7 out of 5 stars. Out of the 50+ reviews he’s done, only a small handful receive anything better than 1 star. Lastly, back in November of 2014 an interested buyer funded a third party evaluation of the trading systems we offered at that time. At this point, the review is a bit dated, covering a few of our early algorithms – nonetheless, you can read the final report here.
If you would like to know more, contact one of our representatives to schedule a live demo of our system. AlgorithmicTrading.net does not access or touch your money, we simply license the algorithms that are auto-traded through a brokerage account or utilized on the tradestation platform.
How does Algorithmic Trading in general, differ from other styles of trading?
We recommend you watch the following two part video series, where our lead developer actually finds a strategy online (MACD Trading Strategy) – codes it up and shows how effective it is. In the second video, he takes it a step further and adds a confirmation signal that is recommended by the third party website – the Awesome Oscillator. How does this strategy perform? Our developer does his best to make it work – and the results might surprise you.
Not only does he code up the strategy, show the performance reports, do his best to optimize the algorithm – but he also shows you the code and uses a finite state machine to create a sequence of trade events required to occur before placing the trade (first the MACD bullish cross, then the Awesome Oscillator bullish cross as confirmation).
This video series is very interesting – because it really demonstrates the power of Quant/Algorithmic Trading.
Developing a valid trading system requires much more than providing one or two charts with a few suggestions. It requires the developer/vendor to clearly identify when to get in, when to get out, what stop to use, what limit order to use, what candle size to use (5 min, 10 min, 60 min, etc), what symbol (SPY, QQQ, ES,etc), to include commission/slippage and much more.
To see this video and the final rules for the two MACD trading strategies – visit our algorithmic trading videos page or start with the first video in the series by clicking here.
How can I get started auto-trading?
Our representatives can help you get set up in just a few easy steps. Click here for more information on how to get started.
Why should I buy your algorithimic trading system?
Understanding the risk of trading futures, we prefer to not use any hard sale tactics. Our approach is to simply present the data, with the appropriate risk disclosures, and let you make your own decisions. Our representatives are not licensed or registered investment advisors, or CTAs, so we cannot give you advice about your specific situation, but we are happy to provide you with information regarding our various portfolios and trading strategies. If you are interested, we can provide you with live demos and back-tested reports from TradeStation on each algorithm going back 10+ years. We encourage you to review the data, share with a NFA registered CTA (Commodity Trading Adviser), and let us know what questions they have so that we can address them. Contact us or call 866.759.6546 to speak with a representative.
What broker do you use?
For auto-trade execution, we have several options available. In addition, the algorithms are coded in tradestation easy language. If you prefer to handle the trades on your own, we can install the encrypted models onto your tradestation platform. Contact us or call 866.759.6546 for details.
Are your results based on live trading or simulated?
For the recently updated portfolios/strategies, we began using actual fills (not hypothetical) around October 2016. All results posted since then are the live returns, normalized to a “per unit” trade size – taken from our developers live brokerage account. Slippage is noted as $0 for these trades, since they are the actual fills not simulated.
Results posted prior to live trading are considered back-tested/simulated/hypothetical unless otherwise noted. Keep in mind, while they are listed as back-tested, for some of the algorithms (Treasury Note/P2-PushPull, Momentum/BullFire, Breakout Day Trade & Short Day Trade), the period between October 2015-October 2016 are considered blind walk-forward, since these algorithms were last optimized in October 2015.
Th Gap Short algorithm is back-tested from May 2003 until October 2016. All trades after October 2016 are considered blind walk-forward.
Why does this matter? Among other reasons, algorithms that are back-tested have the benefit of hind-sight and since actual trades are not placed, impacts of the trading system on the market traded are not accounted for. Developers will introduce “slippage” in order to simulate any potential impact actual trades could have – however these are estimates. In our models, we introduce 1 tick of slippage per trade, per contract – round trip. For example, if the algorithm in a simulated account saw a fill of 2100.00 on the ES, we would assume the fill was at 2100.25 in our models.
If you have questions on any of this, please feel free to contact us.
Can I trade my Roth IRA/IRA on your algorithms?
Yes, automated futures & options trading is an alternative investment allowed in self-directed IRAs. One of our approved CFTC/NFA registered auto-execution brokers can walk you through the process so that you can trade your IRA or Roth IRA with our algorithms. Contact us to learn more.
Do you develop your own algorithms? What is the background of your lead system developer?
Yes, we have developed all of our algorithms. Our lead developer has a Bachelor of Science in Electrical Engineering. He has worked for Fortune 500 companies as a programmer/logic design engineer including Hewlett-Packard, Intel and Qualcomm. His expertise in algorithm development and advanced mathematics has made him the perfect fit for quant/mechanical trading.
Logic design engineers are all too familiar with finite state machines and how to implement complex parallel processing logic. In our opinion, these concepts translate well into the Quant field of programming algorithmic trading systems, since the markets can be thought of as one huge state machine with trades being initiated based on various sequence of events.
Logic design engineers are also familiar with debugging logic and attempting to find holes in the logic they create. This critical way of looking at a design also translates well into Quant trading. Writing an trading algorithm in many ways is the easy part. Doing your best to ensure the algorithm is not over-optimized and that it will trade well post-optimization is the hard part. A critical/pessimistic approach to designing an algorithmic trading strategy is very helpful in producing a quality product that not only looks good back-tested, but also walk-forward tested and finally in live trades.
What exactly do your algorithms trade?
We trade the Futures market, both long and short on the Emini S&P Futures and the TY Treasury Note.
How do the different algorithms within a package work together?
Our trading systems, such as The Swing Trader and S&P Crusher v2 trade multiple uncorrelated algorithms concurrently. Understanding that no one can predict the market direction with 100% certainty, we instead layer in multiple algorithms into a single portfolio with the intent of having 1-2 algorithms that do well when the market is trading higher, 1-2 that do well when the market is going lower and 1-2 trading algorithms that are expected to do well during sideways moving market conditions. In the contrary market directions, our goal is to minimize losses or have small gains. Combined, we attempt to be NET positive 1-2 algorithms for each market condition (up moving, sideways moving and down moving).
This doesn’t guarantee that every month we have gains, however in our opinion it is the best way to implement a purely technical trading system. Many developers attempt to create one algorithm that works in all market conditions, a very difficult if not impossible task in our opinion.
If there are multiple algorithms trading together, is there a way to tell which one placed which trade?
Yes. There is a smart-phone app that will alert you anytime a new trade is placed, and you can receive email alerts as well. You will also receive daily and monthly statements from the NFA Registered clearing firm, where your money is actually located. At the end of each trading day, we update the trade list for each portfolio/strategy with any closed out trades. With this information, you can follow along in real time and compare your results with ours.
Do you have a short algo?
Yes, we have multiple algorithms designed to do well when the S&P is going lower, the Short Day Trading Strategy, the Morning Gap Day Trading Strategy and the Treasury Note Trading Strategy. In addition, our Covered Call Trading Strategy performs very well during down moving markets. The two day trading algorithms trade the S&P 500 Emini Futures (ES). The Treasury Note Algorithm trades the 10-Year Note (TY) which has an inverse correlation to the S&P 500, meaning it typically performs well when the S&P 500 is going lower. This algo had its best year in 2008 and is our best performing algorithm since going live. The covered call strategy sells out-of-money calls on the ES Weekly Options.
Based on the back-testing, we expect all of our portfolios to perform well during the next bear market. There are no guarantees, but we are quite confident in their ability to outperform during bear market conditions.
Results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.
How much does your system cost?
We offer access to our portfolios & trading strategies based on a membership system. Members of our service are allowed to trade any combination of portfolios/strategies they see on our website – up to the maximum amount they are licensed to trade. This allows us to control how much capital is being traded on our algorithms in order to minimize the impact additional customers could have on their performance moving forward.
Click here to contact us or call 866.759.6546 for more information. You’ll be surprised how affordable they are.
How much is needed to trade the algos?
Each package has a different “per unit” trade size which is also the minimum dollar amount required to get started. Each unit represents a block of trades placed across the different algorithms contained in that package. The S&P Crusher requires a starting account size of $20,000 – $30,000, while the Swing Trading Strategy requires a starting balance of $15,000. Contact us for more details.
What happens if my account goes below the per Unit Trade size?
The per unit trade sizes for the S&P Crusher and Swing Trader are built such that the account can incur losses without an individual needing to deposit more capital. The absolute minimum required to trade the S&P Crusher before one might receive a margin call is approximately $12,500. The per unit trade size of $30,000 provides a very large buffer to account for losses.
For the Swing Trader, the absolute minimum is approximately $7,500 and it’s per unit trade size is $15,000. Like the S&P Crusher, this provides a very large buffer such that the account could incur a fairly large drawdown without receiving a margin call. Of course, there are no guarantees in trading. These algorithms should only be traded with “risk capital”.
Do you trade the algorithms yourselves?
Various individuals connected to the company traded them and also sell the license to trade them. In previous years (with varying consistency), our developer traded the algorithms (2013-2015). In those periods, the developer also traded R&D algorithms and would place an occasional discretionary trade. Some of these “R&D” algorithms did well, others did not. For 2013-2016, the developer was not profitable in his personal trading accounts, primarily due to overriding the algorithms at times and placing discretionary trades. The developer currently trades all trading strategies contained in the ES Trading Strategy called the S&P Crusher v2 & The Swing Trader in his personal trading account. He is happy to share statements to potential customers – just send us an email requesting this.
Is support for your system available?
We offer 24/7 email and phone support, and auto-execution brokers also offer exceptional customer support. If you are a current customer in need of support, call us at 866.759.6546.
Do you offer managed account services?
AlgorithimicTrading.net and it’s representatives/principles are not Commodity Trading Advisers and do NOT offer managed or partially-managed account services. As a third party trading system development firm, we do not control client accounts. Our customers are able to override trades, modify allocation between the different trading strategies & shut off the strategies should they chose to.
AlgorithmicTrading.net sells the license to use our algorithms. With that said, there are multiple NFA Registered brokers who will auto-execute our algorithms with best efforts on your trading account. Call 866.759.6546 for more information.
Should I ‘bet the farm’ with your algorithms?
Absolutely not. Algorithmic trading in the Emini Futures market on a relatively short-term basis should be considered a risky investment. AlgorithmicTrading.net and its representatives are not registered CTAs (Commodity Trading Advisor) and can not provide advice unique to your situation. Consult a professional to discuss your specific investment objectives and to determine if our algorithmic trading systems can provide a role in working towards those goals.
Please do not trade our algorithms if you do not have adequate risk capital to allocate towards them.
Do you ever re-optimize the algorithms?
Yes, as needed. This is included as part of the maintenance of the algorithms. If we find an improvement to the existing algorithms, we will provide that to our auto-execution brokers and do our best to notify all existing customers of the change.
If you are a customer using tradestation, you will need to notify us by email to schedule an update.
Generally speaking, the better the algorithm the less likely a re-optimization will be needed. If the algorithm is doing well – then the worst thing you can do is modify it to try and squeeze a little more out of the market. We take pride in our algorithms, in particular from the fact that they have not required optimizations.
Swing Trader Algorithms
- Momentum ES (formerly called BullFire) —– Last optimized back in October 2015
- Momentum TY (formerly called PushPull) ——- Last optimized back in December 2014
S&P Crusher V3 Algorithms
- Momentum ES (formerly called BullFire) —– Last optimized back in October 2015
- Momentum TY (formerly called PushPull) ——- Last optimized back in December 2014
- Breakout Day Trade ES —– Last optimized back in October 2015
- Breakdown SHORT Day Trade ES ——- Last optimized back in October 2016
- Gap SHORT Day Trade ES ——- Last optimized back in October 2016
- Dropped Options Algorithms as of January 2018 due to bad performance
Do you guarantee I will make money every month?
No. The average gain per month is an average gain that the algorithms have made on a back-tested basis going back to the period indicated. Some months they made more that what is posted, other months they made less or posted losses for the month. This is an average gain per month using the “per unit” trade size.
Results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will, or is likely to, achieve profits or losses similar to these being shown.
Even at 5% per month (60% per year), it would outperform most hedge funds. Why don’t they do what you're doing?
Our algorithms are considered aggressive. Hedge funds do have aggressive quant algorithms like ours, however it is our opinion that they typically don’t allocate as much of their capital toward these riskier models, and therefore do not have the potential for spectacular returns that we may have.
At our customers discretion, if the per unit allocation is modified to reduce risk, the back-tested average monthly gain is also reduced. Customers should always consider the risk involved with trading futures when allocating the number of contracts they wish to trade. AlgorithmicTrading.net is not a registered commodity trading advisor and does not provide risk management services. Customers should consult with a registered CTA for advice tailored to their specific situation.
I don't have time to look at any charts, I’m too busy.
Our system is 100% automated. There in no installation or action needed by you if you utilize one of our auto-execution brokers. Once you are set up, your auto-execution broker will trade the algorithms on your account, with best efforts. You will receive a daily statement. There is also a smart-phone app that will alert you in real-time when a trade is placed on your account.
Do you have to be registered as a CTA in order to sell your algorithms?
No, pursuant to CFTC Rule 4.14(a)(9)(ii) we are not required to register under the Act as a commodity trading advisor.
A person is exempt from registration as a CTA if “[i]t does not engage in . . . [p]roviding commodity trading advice base on, or tailored to, the commodity interest or cash market positions or other circumstances or characteristics of particular clients.”
What is your refund policy?
We encourage our customers to take a long-term perspective when using our algorithms and therefore do not provide refunds. Our contract states all sales are final. Trading is not easy, even with a high-quality, automated trading system like ours. It is best to not focus on the day-to-day ticks of the market or our performance. Instead look at it on a monthly or quarterly basis. Measure your results compared to the performance of the S&P 500 and enjoy the ride!
Do you have statements you can share?
Yes, simply visit our Algorithmic Trading Statements page to see actual statements from an individual trading our algorithms on full auto-pilot. Just keep in mind, past performance is not indicative of future performance.
I have more questions, can I speak with someone?
Yes, our representatives are available to answer any questions you might have and walk you through all the data we have. AlgorithmicTrading.net and its representatives are not licensed investment advisers, or CTAs. Consult a professional to discuss your specific situation with them.