Frequently Asked Questions
Does Algorithmic Futures Manage Capital?
Algorithmic Futures is a third-party trading system developer that licenses trading algorithms to allow customers to trade with 100% automated systems. Algorithmic Futures does not manage capital or provide investment advice, and as such, is not registered with the NFA as a Commodity Trading Advisor. We operate under an agreement known as a "letter of direction" to allow trading of our algorithms in your account.
How do the Trading Systems Differ?
The primary differences between the three trading systems are 1) Account Size; 2) Markets traded; 3) Number of strategies; and 4) Standard deviation risk profile.
The Diversified Algo system trades 14 trading strategies, diversified between high frequency strategies and mid-frequency strategies. As a result of the increased diversification, the program’s backtest has a lower standard deviation of monthly returns and lower monthly maximum drawdown.
The S&P Dynamic trades 8 trading strategies and entirely focused on S&P 500 futures. Given the liquidity in this contract, this system should experience the least amount of slippage as more contracts are traded. This system has a slightly lower standard deviation of monthly returns, but also a slightly higher maximum drawdown.
The HFT Alpha system trades 12 trading strategies and focuses on high frequency trading strategies. This system experiences a higher standard deviation of monthly returns, but with strong return potential.
What are the Minimum Account Sizes for the Systems?
The recommended account sizes are as follows:
HFT Alpha: $25,000 recommended ($20,000 minumum)
S&P Dynamic: $35,000 recommended ($30,000 minumum)
DIversified Algo: $45,000 recommended ($40,000 minimum)
The recommended account sizes are established based on the estimated required margin and expected maximum drawdown of each of the programs. However, there is always the risk of experiencing a margin call and loss of capital and the customer must determine how much capital to keep in their account based on their risk profile.
What is the Cost and What Payment Methods are Accepted?
The HFT Alpha program is $110 per month or $1,000 annually. The S&P Dynamic program is $140 per month or $1,250 annually.The Diversified Algo is $165 per month or $1,500 annually.
We accept PayPal for payment, but will work with your needs if there is another preferred payment method. You can choose to pay monthly or receive a discount for paying for a full year.
What Asset Classes and Contracts do the Systems Trade?
These programs only trade futures contracts and does not trade stocks, ETFs or bonds. The HFT Alpha system and Diversified Algo system trade a variety of equity index futures, along with five year treasury futures. The S&P Dynamic system only trades S&P 500 futures.
How are Strategies Developed and Backtested?
We utilize sophisticated trading software to develop, backtest and automate strategies. All strategies are developed with statistical research and walk-forward analysis to create robust trading models. Our research utilizes realistic assumptions including commissions and slippage to create reliable backtests.
How do I Open an Account to Start Trading?
You can contact us through the Algorithmic Futures website or at firstname.lastname@example.org to setup an account. Our broker, The Fox Group, will work with you to setup your Tradestation account. The Fox Group will trade the licensed algorithms in your account via a remote server.
What Brokers Can I Use to Trade the Systems?
We currently setup trading accounts at Tradestation. Tradestation provides full functionality to support the algorithmic trading strategies and provides a low cost brokerage option.
Can I Open an IRA Account?
Yes, you can open an IRA account for auto-trading our systems. You will need to use an IRA administrator, such as Midland Trust Company, which administers self-directed IRAs.