Skip to main content

Answers to Your Common Autotrading Questions

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.

Part 1: 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 app and 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.

Part 2: Common Questions About Autotrading Performance

How long have your strategies been live traded (with capital at risk)?

InvestiQuant’s autotrading programs are comprised of over 60 algorithmic, intraday-only trading strategies. 90% have been trading live for at least 5 years, and some for nearly 15 years. Our newest strategies are from our Meta AI/machine learning series which began trading live in Q4, 2021. 

Note: iQ programs’ live trading results reflect each program’s performance as it has  traded since available to the public (typically less than 5 years). 

How can I verify the published returns of your autotrading programs? 

Since all clients, including InvestiQuant employees, are treated the same at each broker (i.e. earn the same trading results each day), the easiest way to verify performance is to contact one of InvestiQuant’s execution brokers

Can we guarantee returns?

We cannot guarantee autotrading returns, and anyone who says they can guarantee returns – no matter their track record – is a red flag.  While we do share our programs' historical performance, both simulated and live, we cannot guarantee future outcomes. Trading the markets is inherently unpredictable. We rely on our data-driven strategies and anticipate future trends mirroring past behaviors, but there are no certainties in trading. That being said, over the long term, we expect to see similar returns as historical results—but this is never guaranteed.

When is the best time to start autotrading?

In general, when considering investments with positive expectancy, it is best to get started immediately with an initial allocation. Attempting to time the results of autotrading is impossible due to the randomness of short-term results.

Part 3: Common Questions About Autotrading Accounts

Can I stop (or pause) the trading of my account, or withdraw funds,  at any time?

Yes. If for any reason, you want to pause the execution of InvestiQuant’s strategies, or withdraw some, or all, of your funds, simply contact your broker. Please allow 24 - 48 hours.  You do not need to contact InvestiQuant, though we would appreciate a courtesy email to [email protected].  Note: client accounts can only be paused when not in a trade. 

Does anyone at InvestiQuant have access to, or visibility of my account funds? 

No. One of the many benefits of the iQ Autotrading model is that InvestiQuant’s exclusive role is to serve as your signal provider.  This allows us to keep our focus solely on creating the best strategies and offloading the execution of the strategies to an expert team. Our sophisticated signal delivery technology routes our signals to the broker’s application which seamlessly converts the signals to orders for execution at the exchange on your behalf. 

Can I use my existing account?

It depends. If you already have an account open at one of our specialized brokers (like The FOX Group or Edge Clear), then YES.  If not, then you will need to open an account with one of them as our signals are integrated directly with them and their systems. Plus, their specialized staff provide the invaluable service of monitoring and overseeing the algorithmic execution of our strategies in client accounts (so that you don’t have to). 

Note: If you have funds in an account at one of our Futures Merchants (GAIN/StoneX, Phillips Capital, Dorman, etc.) but with a different broker, then you will only need to re-paper the account with our broker and not need to move your funds.

Can I trade in the same account as the one that executes iQ signals for me?

You cannot trade in the exact account used for autotrading. However, you can open a sub-account under the same name as your autotrading account. Maintaining separate accounts ensures clarity of trade results. You'll receive daily statements detailing the day's trades – entry and exit points, and their outcomes. A comprehensive monthly statement is also provided.

Can I manage the trades once the program has executed a trade?

No. Due to their auto-adaptive design and stop management, the vast majority of traders will underperform (likely by a lot) the statistically-based execution of our strategies.  InvestiQuant's autotrading programs are autonomous by design, eliminating the need for user interference with stops and targets and avoiding the many negative consequences of human’s many cognitive biases

Does InvestiQuant “front run” or trade against the signals executed in my account?

No! The InvestiQuant team members’ accounts rely on the very same signals and strategies as our clients. Further, our accounts are traded side-by-side with our clients. And, the clients at each broker receive the same result at the end of each trading day - win, lose or draw.

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.