Navigating the world of autotrading can seem daunting, especially for those new to active, self-directed investing. With an array of choices to make and strategies to consider, it's crucial to be well-informed. At InvestiQuant, we're dedicated to providing transparency and education to not just our valued clients, but also those who are in the exploratory phase. Whether you're a passive investor or a seasoned trader, or just starting out, we are here to help.
Common Questions About Autotrading Programs
Is it best to start with the smallest autotrading program available?
In general, we believe it is best to start with the program(s) that will best fit your needs and your risk tolerance. When autotrading, the larger programs provide the best diversification and risk-adjusted returns (i.e. may be less volatile and easier when starting out). A simple way to compare the risk-adjusted returns between programs is to use the Sharpe ratio—the higher, the better. This metric is viewable on iQ performance reports and via the iQ Portfolio Builder tool.
Another effective way to measure risk is to compare the size of the historical drawdowns relative to the program’s suggested funding levels—the smaller the percentage, the better. By examining these two metrics, you can find the program(s) that may be best suited for pursuing your financial goals.
Is it okay to license and combine multiple autotrading programs?
Yes. Even when trading, diversification is key. Our most satisfied clients typically license one of our larger programs like the iQ Combo or iQ Select in order to benefit from their blended portfolios of different strategies and inputs—which typically generate the best returns relative to risk.
To see the results of hypothetically combining different iQ autotrading programs and using different funding amounts, you can access our free iQ Portfolio Builder appand view iQ Autotrading Program performance here.
What markets are traded by InvestiQuant’s autotrading programs? Why futures?
iQ strategies currently trade the stock index futures markets exclusively (e.g. S&P 500 e-mini futures and NASDAQ 100 e-mini futures). They are ideal instruments due to their high liquidity, ability to enter long and short in all account types, including IRAs, cost-effectiveness when two-way trading (long and short), tax advantages (consult your accountant regarding Section 1256 contract benefit), and ability to be funded with less capital (thereby freeing up your capital for other investments and uses).
Is futures trading risky?
All trading and investing carry inherent risk, regardless of the type or trading instrument. InvestiQuant strategies avoid much of the risk by only trading the intraday time frame (~930 am ET to 500 pm ET) and avoiding the less liquid, more volatile overnight session. To be clear, we don’t hold trades overnight, and thereby avoid the risk of unexpected market shifts due to overnight news and geopolitical events.
Historically, our strategies have only been active and exposed to market risk about 10% of the time that of stocks - which naturally makes them very lowly correlated and ideal solutions for value-added portfolio diversification. We also include stops with every signal that gets executed, this helps keep risk in check whenever a trade does not work out.
Begin Your Autotrading Journey with InvestiQuant
InvestiQuant has been providing institutional quality trading strategies based on statistical edges to self-directed investors since 2008. Our AI-driven automated solutions help clients protect and grow their wealth, hands-free, regardless of the direction of the stock market. Learn more about our autotrading programs, or contact us to get in touch with our team today.