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InvestiQuant

Introduction to iQ’s Adaptive Signal Technology


iQ Options Alerts are based on InvestiQuant’s signal technology which is driven by an ensemble of adaptive trading systems and machine-learning techniques that the company developed and implemented in 2013-2014 and has refined over the years. The company, along with its founders, and hundreds of clients have relied on this innovative, proprietary signal engine for discretionary and systematic trading strategies for nearly a decade. In live trading, the adaptive One of the strengths of the iQ Signal is its ability to predict the “open to close” direction of the S&P 500 with high accuracy and consistency and has done so since inception. 


History


iQ Signal technology is the byproduct of an extensive investment in InvestiQuant’s trading systems, machine learning technology, and predictive analytics techniques. From 2014-2015 the company raised over $3 million in outside investment capital (mostly from clients) to build and scale its research infrastructure and signals. As part of this process, the company collaborated with Duke University’s Center for Quantitative Modeling. The Director of the Center subsequently became a client and investor in the company and a member of InvestiQuant’s Board of Directors. 


Overview


iQ Signals are generated by the company’s ensemble of lowly correlated, auto-adaptive, intraday trading systems that were created in 2012-2013. Each system is engineered to evaluate the probable “open to close” direction of the equity indices based on robust historical analysis of a specific market factor (e.g. trend, momentum, volatility, overbought-oversold, seasonality, etc.). When the ensemble collectively favors a given direction, a strong directional daily market bias exists and a tradable signal is generated. 


At the core of the ensemble is an extensive proprietary factor library (~750) containing the precise market state of each factor, for each system, for every trading session since 1998. As new market information is added to the database each evening, the ensemble adjusts accordingly. In a nutshell, the ensemble gets “smarter” each day and continuously evolves with market structure, providing a reliable and auto-adaptive, directional signal. In addition, the results for hypothetically trading each system for a given market state, as well as the ensemble overall, are updated and archived daily, allowing for realistic performance tracking and continuous improvement.



Benefits


The comprehensive and dynamic nature of InvestiQuant’s signal technology enables it to provide compelling benefits when compared to traditional and other machine-learning signals:


  • Consistent and Proven: The iQ Signal has predicted the S&P 500 “open to close” direction with 66.1% accuracy (185 wins/280 signals) when triggering over the past five years (July, 2017 - June, 2022) and 60.3% since January 2008.


For example, despite three distinct shifts in market sentiment in 2020, it correctly identified the direction for 20 of 24 sessions (Jan - April, 2020). Continued performance at this level may not be realistic; however, the results demonstrate the signal’s “all-weather” capabilities.


Figure 1:  iQ Opening Signal for trading the S&P 500 (ES) during regular trading hours (930 am ET - 415 pm ET) from Jan 1, 2020 - Apr 16, 2020. Past performance may not be indicative of future results.


  • Selective:  iQ Signals effectively balance selectivity with accuracy and are well suited for trading equity indices and other correlated instruments. Historically, the S&P 500 opening signal has averaged about 50-60 long and short signals per year. The ensemble also evaluates many other markets and can be used to create additional signals at the open, or post-open (e.g. 15 minute opening range). 

  • Easy To Execute:  The signal output is binary, and the trigger price and potential for a trade is known well in advance of execution. 

  • Commercially Reliable:  InvestiQuant’s signal technology is supported and maintained by an experienced team of software developers and data scientists 24x7, every trading day of the year. 





DISCLAIMER


Futures, options, and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This presentation is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those demonstrated by the application or discussed in any materials. The past performance of any trading system or methodology is not necessarily indicative of future results.



CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED 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 PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.