A certified 100% Trades-Own-System strategy, SVXY Timer is a proprietary trading strategy using key variables predictive of the next-day % change in SVXY, an ETF tied to the VIX futures. This strategy will typically be either long SVXY or a comparable fund, short SVXY or a comparable fund, or in cash. We don't use leverage (i.e. the amount of our ETF allocations at any given time will not exceed NAV).

Because the system is designed to trade on signals derived from the trading algorithm, stop losses are not normally employed (back-testing shows that this takes you out of too many positions that end up being profitable). If you are not willing to experience draw-downs of 20% or more, you should consider setting your own stop loss positions although, as noted, this may hamper your long-term results.

To control downside risk without stop losses, we instead limit our exposures as noted above, and build into our model proprietary variables that are predictive of black-swan events. We also will go short volatility as well as long volatility in order to take advantage of market moves in either direction.

Important: we don't provide professional financial or investment advice specific to your situation; rather, we simply provide algorithmic (and in rare situations discretionary) trading signals for certain S&P 500 volatility (VIX) related exchange traded products based on proprietary analysis.