Markman Capital Insight

Invariant Energy

Invariant Energy is a trading system that issues buy and sell signals for energy commodity contracts initiating or extending price trends. It focuses on the crude oil and heating oil markets.



Crude oil is the fossilized and liquefied remains of decayed flora and fauna that flourished in ancient seas. Commercial demand began with the invention of the kerosene lamp in the 1840s. Crude oil futures are the most heavily raw commodity traded on global markets today. Refiners "crack" its carbon molecules into industrial liquids such as gasoline, diesel and aviation fuel. Around 96 million barrels of oil are produced daily worldwide. Speculators exploit supply and demand volatility. Crude is priced in dollars per barrel; contract size is 1,000 barrels. Heating oil is priced in dollars per gallon; contract size is 42,000 gallons.

The artificial intelligence underlying the Invariant Energy trading system -- developed by AIQ Capital Research LLC -- identifies entry points amid a dominant price trend, then harmonizes action across multiple time frames to identify opportunities to add exposure.

 In math, "invariance" describes a property that remains unchanged when a transformation is applied to a formula. Likewise, our system's guiding algorithm adapts to changing conditions while adhering to an invariant central thesis, providing a bedrock of conviction for trades as they unfold.

Tested results of the program, including live beta, are in excess of 50% per year, though there are no guarantees that will be achieved. To put the subscription cost in perspective, if a 50% return is achieved for a typical program in a year, a member will pay as little as $2,000 to earn $10,000.

To determine trends, most systems depend on a combination of common oscillators that contradict each other. In contrast, Invariant depends on a single proprietary oscillator that meshes and smooths action across time intervals to confidently generate signals. Our approach attempts to suppress errant counter-trend action, allowing the dominant trend to play out to max advantage.

Invariant categorizes trend conditions into four modes: up/accelerating, up/decelerating, down/accelerating, and down/decelerating. Trading rules adjust for each mode, allowing the system to see turning points early and to maintain directional accuracy.

Signals register when either a turning point has been identified and or when a new trend has been confirmed. Holding periods range from hours to weeks. Protective stops are issued for every trade, and are tightened at regular intervals as a position progresses. Losing trades are typically acknowledged and exited quickly so that their capital can be redeployed more effectively.

All signals and trading rules have been tested against 12 to 18 years of historical data that include a wide variety of market conditions and bull/bear cycles. The signals and rules have also been tested against out-of-sample data in live trading accounts.

To ensure the algorithm is not over-traded, limiting liquidity, members must hire an approved futures broker to manage their account under a letter of direction. Members are not informed of new trades, targets or stops in real time, but can see activity in their brokerage account at any time. Trading action will be summarized and discussed in a weekly members-only email newsletter.

Members will be limited to trading three times the number of recommended contracts for any given trade – i.e., 3 contracts if the algorithm recommends 1 contract. Members must purchase an additional subscription to trade incrementally more contracts. The total number of subscriptions will be limited to help protect the integrity of the system.

Invariant Energy trades two instruments that are chosen for their tendency to trend well, make broad swings, and require similar margin (around $3,000). More energy commodities could be added in coming months as markets evolve and opportunities develop.

The program will trade only one to two contracts at a time. The recommended minimum portfolio size is $20,000, though members can adjust this amount to suit their risk tolerance.

The introductory price of the system is $210 per month, or $1,135 per six months.

In summary, Invariant Energy is an active, focused and adaptive futures program that can play an important role in independent investors' efforts to meet their financial goals. If successful, members can let gains pile up in their accounts and add more contracts when appropriate, or skim off profits every month to use as income. Either way, we expect that members will find Invariant Energy a singular way to harness the power of global markets in any environment for a long time.

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CAVEATS

Futures trading can be a blast, but it is also often a grind. Mentally prepare for a ground war. Only around 60% of trades are expected to be successful. The system is expected to succeed because gains from wins should be larger than givebacks from losses.

Volatility rules in futures. When trading a $100,000 account encompassing all five programs, we have seen single day setbacks as great as $4,000 and single-day advances as large as $8,000.

There can be long stretches in which there is a lot of trading but no progress. This is normal. It's like fishing. You need to keep baiting your hook and casting into the river. Many bites will lead nowhere as fish wriggle away. But over time you should have the opportunity to potentially land a few big winners that provide most of the success. Be patient and don't give up.

Results can be very streaky. The system can log seven successful trades in a row followed by up to six straight losing trades. It's important not to get too elated when landing one winner after another or to get depressed if losing trades stack up.

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VALUE OF DIVERSIFICATION

Diversification is key to achieving the desired and tested results. Volatility swings around unpredictably among sectors and asset classes, and blesses certain contracts with strong trends for a few weeks or months, while others are stuck in a range – then reverse abruptly.

As a result, we strongly recommend that members subscribe to at least three Invariant programs, though it is best to take all five. We're not saying that because we want to sell more programs but because it is a better strategy for success. We never know which commodities will lead and which will trail, so diversification is critical.

Call us at (206) 651 4566 to discuss further, or click the buy button to sign up now. Subscriptions will be limited, and the introductory prices for charter members will rise later in the year.

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NOTICE

Past results are no guarantee of future returns. All accounts may not achieve comparable results. Futures trading involves the risk of substantial loss. Although Invariant is systematic, it is also leveraged and speculative so only use risk capital -- i.e., money you can afford to lose.

The system's decisions are largely governed by algorithms but human discretion may be applied. 

Invariant Energy results assume a model portfolio size of $20,000. Reported returns are gross of the cost of subscription and commissions and are not compounded.

Subscribers' accounts must be managed by approved professional brokers under letters of direction. This is an economical, hassle-free way to make sure trades are executed for you accurately and on time while also ensuring the integrity of the system. Ask for a referral.

The system only makes recommendations. You control the position at your brokerage. If a draw-down is larger than your risk tolerance, tell your broker to stop it out and wait for the next signal.

Algorithms and methods underlying Invariant Futures were created by Andrew Palashewsky, CMT, of Advance IQ Capital Research LLC and are exclusively licensed for distribution to Markman Capital Insight LLC.

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 IN 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 OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.