TRIDENT Signal Menu

The Table below shows a sample of the Trident Signal Menu email that will be delivered to the brokers for LOD accounts and individual clients for SD and BAST accounts no later than 9:00 PM eastern every trading day. The strategy starts the next trading day at 8am ET for LOD accounts; SD and BAST accounts can trade at anytime after receiving the Trident Signal Menu email. SD and BAST clients are not beholden to the LOD instructions and can trade completely at their discretion.

Note: Product layout and contents are subject to change without prior notice

The following is a general User’s Guide as a reference and introduction to the Trident Signal Menu. It provides some context and background around the basics of the product to enhance the user’s experience.  Please note that the specific suggestions for any particular signal are on the emails which are always up to date.

Trident Signal Menu User Guide & Execution Instructions

AlgoReturns Signal Menus are designed to predict short term volatility and significant movement of futures prices consistently and accurately.  We do not predict direction of the price movement and therefore provide a trade management technique to capture the value of the predicted price movement whether its up or down.   The Trident Signal Menu can be executed on a SD, BAST or LOD basis.

Narrative of the Trade Management Concept:

The direction-neutral trade management technique is comprised of a pair (long and short) of two-lot units, a work horse (trade #1 below) and a racehorse (trade #2 below):  The point of the workhorse is to capture a small profit/cover transaction cost and the point of the race horse is to allow for home run potential.  The movement of the price once the ticker is indicated “active” dictates the direction of the trade, long or short.

Long Trade: If the price goes up and hits the entry level, the two long trades are initiated.  If the target is hit on the work horse, it is sold, profit taken, the racehorse stop changes to a trailing stop and the short work horse and racehorse are canceled.  At this point, a profit is locked in, and you are playing with house money with the racehorse trade.  Suggestions for trailing stops when the racehorse runs are also provided in the email.

The “Head Fake” Concept/Second Trade:  Because Trident is direction neutral, we have built in a process to account for a short term “Head Fake”:  Sometimes the long trades are initiated and the price initially stays flat or increases slightly (the Head Fake) but does not hit the work horse target, then ultimately drops and stops out.  This would indicate that the play is instead for the short.  Therefore, since the two shorts were not canceled (long work horse target was not hit), the short work and racehorse are initiated and the exact process above is put into effect for the short. 

Short Trade:  If the price initially goes down, the EXACT same process goes into effect, but starts with the two short trades. 

Ratings System:  Signal Strength and Profit Potential.  Ranked A, B and C.  “A” Signal Strength ratings indicate a higher probability of a breakout vs “C” and “A” Profit Potential indicates higher probability of a significant price trend vs a “C”.  These ratings can be used to prioritize trades as desired by the trader. 

Execution:

An email is sent every evening (no later than approximately 9:00 PM Eastern time) indicating the active signals on a menu of 20+ futures tickers.  See below for an example of the evening email.  The email indicates an “active” signal for tickers in play and provides the trade management suggestions. Self-Directed accounts have full discretion of the signals and trade management execution.

See below for an example of a Trident trade with generic Action Items which are utilized on any Trident trade.  It is a strict set of instructions that an authorized broker must follow under LOD agreement. However, these are suggestions only for self-directed accounts which have full discretion over timing, targets, risk, stops etc. 

Nightly Email example of an Active Sugar trade indicated on 3/23/22. Under the LOD agreement, an authorized broker will start the trade the next day at 8AM ET. However, a self-directed trader executes any time after receiving the nightly email which comes at approximately 9:00 PM Eastern.

Execution Instructions Example

(The Value/Example column below is a specific example of the sugar trade indicated above; the Action Items are the generic instructions): 

Example: The email above came at 8:00 PM Eastern on 3/23.  Sugar price at 8:00 AM ET on 3/24 is approximately 19.xx (this timing is relevant under LOD agreement, for self-directed accounts the trade can be initiated any time after receipt of the email).  The movement of the price itself dictates whether it is a long or a short.

If Trade #1 does not achieve target during regular business hours, then set the profit objective for Trade #2 to the profit objective indicated for Trade #1, for trade management outside regular business hours. Regular business hours apply to authorized brokers who are executing under an LOD agreement. For self-directed traders, this is flexible depending on individual circumstances.

Additional flexibility in start time. On days when key economic data release, we recommend up to 30 -45 minute flexibility to the 8am ET start time. We will notify LOD brokers by email if a flexible start time is needed due to economic news risk.

(For LOD brokers) Intraday trade management instructions to improve the flexibility of the system while still adhering to the strict LOD rules. We expect to have one intraday instruction update before Noon ET. The intraday updates will have a 15-30 minute window for execution. (So LOD brokers don’t have to stay glued to email or provide immediate execution!) Examples of intraday instructions are: a) Cancellation of signals b) Protection of profits/risk management c) Updates to trailing stops

We developed four separate account sizes based on algorithmic and mathematical risk tolerances (40X risk amount per trade), margin requirements and drawdown scenarios.  The account sizes are guidelines only for SD and BAST accounts but are the actual tickers and contract sizes to be used going forward with an LOD account. The accounts differ in both number/composition of tickers utilized and the size of the contacts.

Also, these accounts are illustrated as fully-funded with no use of leverage. Brokers and clients have the option to lever the accounts to more fully utilize the number of/specific tickers and contract sizes of larger accounts with a smaller at risk capital. SD and BAST accounts have complete discretion over leverage and LOD accounts can discuss this with their broker.

Please see below for the account sizes ranging from $25k to $100k (fully-funded) and the tickers and contract sizes.

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Daily signals are now available at this link. Needs a password to access the page. Password is restricted to authorized brokers only.

The following table is provided as documentation and reference for the trades executed for LOD accounts starting in January 2022.  It is not intended to be used as a performance measure or an investment track record. Contents are not certified to be accurate and are subject to data entry errors.

In addition, the table is not reflective of SD and BAST account performance potential.  SD and BAST accounts are not beholden to the LOD restrictions regarding time of trade, size of trade, active tickers traded, targets, stops etc.  The results, therefore, can be materially different than those presented in the table.  

Trident was designed and back tested using all 28 tickers and predominantly the larger, standard contracts under the LOD scenario.  This is exactly reflected in the $100k account.  The smaller accounts have a combination of fewer tickers and/or smaller contract sizes.  Therefore, the simulated live results for the smaller account sizes do not reflect the true power of Trident but are still very applicable for subscribers who would like to utilize Trident on a smaller basis under an LOD program.

A total transaction cost estimate is incorporated into the numbers.  We utilized $10, $15, $20 and $25 for the $25k, $50k, $75k and $100k respectively per lot.  We believe these are conservative estimates of ‘all-in’ trading costs and friction including but not restricted to proxy slippage, broker commission, exchange and settlement fees.  Actual transaction costs will be agreed upon with the broker.

Hypothetical performance is shown on a fully-funded basis i.e. an account size of $100K means that the account is fully-funded with $100K in the futures account. It does not mean a leveraged account where an account is partially-funded with the suggested capital. Applying popular leverage ratios (such as 1.5x,1.3x) can materially affect investment performance.

A hypothetical starting balance of 25K, 50K, 75K and 100K is shown to reflect common account sizes. Details about the account sizes are described in the “Suggested Capital & Account Sizes” section. Each account balance has also been charged with a monthly subscription fee as follows which are the fees for an LOD account:

• $25K account – Monthly subscription fee $59
• $50K account – Monthly subscription fee $99
• $75K account – Monthly subscription fee $139
• $100K account – Monthly subscription fee $179

Please note that the monthly subscription fees and transactions costs are tax deductible, therefore acting as a tax shield on the total, after-tax return.

Hypothetical balance is not the same as end of day balance on your brokerage statement. The table below reflects current signals from January, 2022 till March 3rd, 2023 and is expected to be refreshed with the cumulative trades once every 2 weeks.

HYPOTHETICAL PERFORMANCE DISCLOSURE: HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS.

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The following is a list of approved brokers for the TRIDENT Signal Menu:

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