The Five Algorithms of IDT Software

The five algorithms of the IDT system run nightly after downloading market closing price data and calculating other asset data used to make its investment decisions.

1) The ranking algorithm ranks all of the investments in the pool from best to worst based on the performance of three time periods, moving average, volatility, weightings for each, and some proprietary tweaking factors for each portfolio.

2) The selection algorithm will choose the best investment from the ranking list when there is an open position in the portfolio. However, it will reject any investment that is classified as violations, such as, category limits, overbought performance, volatility or moving average violation. This algorithm also takes into consideration whether the market is overbought or oversold.

3) The profit-taking algorithm protects the profits of an investment that may have reached its peak. For instance, if an investment has become overbought based on its RSI level and has turned down and reached a set RSI level, this algorithm will produce a sell signal. The reason an investment is being sold will be displayed In your daily performance report.

4) The sell algorithm determines an outright sale. A stop loss point, moving average decline, or performance violation may have been reached. IDT creates its own volatility calculations and our stop loss points are determined by this calculation. It’s not a standard guess.

5) The replacement algorithm kicks in when an investment position is not performing as well as another investment asset in the pool. This algorithm will not only determine the selling asset but also the investment asset in the pool to be purchased. All selling reasons will be shown in your daily position report.

These algorithms are successful at producing investment returns equal to or exceeding the underlying benchmarks because:

  • It does not try to predict the future or rely on past performance

  • The program does not make decisions based on emotions

  • There are predetermined investment rules that dictate what and when to buy along with what and when to sell

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