EPIC v3.3 Crude Oil Machine Trade Software
March 28, 2022
Project History & Objective.
Our team set out over five years ago to develop sophisticated software architecture for the trade of crude oil futures.
The goal: to provide a stable yet high performance product achieving an increasingly higher ROI over time as the software processes market data, structure of trade action and order-flow.
The primary challenge until mid 2021 was “stability” vs. ROI objectives.
Until recently, some versions of the software achieved over 150% annual ROI and some as low as 20%. The size of the trade account was the most significant determining factor (the larger the account size the more stable the software is and the higher the return).
Over time the architecture of the software has been perfected, but the real game-changer has been the development of the EPIC IDENT™ Order Flow component of the code and more recently the Intra-Day High Frequency code that relies heavily on IDENT™.
Currently the Intra-Day High Frequency protocol of the software code is winning 97.3% of its trades on all account sizes. We had expected this to be 80-90% over time. However, the 97.3% win rate has now occurred over many hundreds of executions (nearing 1000) over a significant number of months. This development is obviously a considerable achievement.
In short, there are three primary protocols of code in the software;
- Swing Trading (average sequence duration is 11 weeks and has been as short as 3 weeks and as long as 16 weeks).
- Intra-Day High Frequency (average sequence duration is considerably less than 24 hours but can also be described at times as intra-week lasting up to 3 or 4 days).
- EPIC IDENT™ Order Flow (extremely high frequency for positioning alongside significant machine “entities” that have presented themselves in the intra-day order flow).
For the last number of months we have been running EPIC v3.1.5 software and more recently EPIC v3.3 (live trade real world accounts and internal beta versions) on three different account sizes. The software has proven to be very stable while consistently providing considerable returns.
To our knowledge the EPIC Oil Machine Trading Software is best in class.
EPIC Software Returns.
Note: Below are the summary results for our most recent v3.1.5 and v3.3 version of software that has been running since September 1, 2021. An addendum that includes extensive real world trade data, methodology of trade executions and trade performance is available by contacting our team.
The 80 account size version was returning a 43% per year (annualized) after first sequence of trade (September 1, 2021 – December 1, 2021). During 9 sequences of trade (approximately 27 months from launch of most recent v3.1.5 version) we expect the ROI to increase steadily to approximately 86% per annum.
More recently the 80 account size version, v3.3, has been added with the v3 generation now in the second large trade sequence (the war caused a significant break-out in crude oil in to 130s). The 80 contract size version is currently running a loss, (draw-down) SPECIFICALLY on sequence 2, of approximately -13% and hit a maximum draw-down in sequence of -24% (as of time of writing). Prior to this sequence it was trading +47.8% (as above and not included in the sequence 2 draw-downs noted). However, as this large break-out sequence continues even the 80 contract size protocol is slowly gaining “position” and the draw-down in the sequence is progressively smaller. At any moment the software is expected to be positive in this divergent break out sequence 2, which is quite an accomplishment for our team. The larger sized software versions are having no issue with the recent price break-out and are in fact in significant profit positions.
The 150 account size version was returning 67% per year (annualized) prior to the large war break-out sequence 2 and currently (at time of writing) is realizing 87% per year (annualized). We expect the ROI to increase over 9 sequences of trade to approximately 134% – 167% per annum.
The 300+ account size version was returning 108% per year (annualized) prior to the large war break-out sequence 2 and currently (at time of writing) is realizing 172% per year (annualized) – it is exceeding our expectations. We expect the ROI to increase over 9 sequences of trade to approximately 216%-247% per annum.
Over time, as the software runs through sequences of trade, the IDENT™ technology in the software gains more intel and as a result the ROI increases considerably.
The maximum return in a perfectly executed software protocol would be near 2000% per annum. However, we don’t expect ever to achieve consistently more than 300% per year trading a 300 account size.
EPIC Software Highlights.
- Lightning Fast Decisions. EPIC crude oil trading software executes trades through utilizing over 8700 weighted decisions instantly. The instructions provided within the architecture are growing daily. A human trader cannot make decisions as quickly, cannot process the data required for most intelligent trading probabilities and cannot execute trades as precisely.
- Algorithmic Chart Models. The EPIC software includes over thirty proprietary algorithmic chart models and the catalogue is growing. The algorithmic models have been designed, tested and refined in real-world trade for over 5 years by a team of day traders, each with over 20 years of experience. The oil trading models represent all time-frames from 15 second to monthly time-frames of trade. The algorithmic models have been back-tested to sixty months historically.
- Conventional Charting. The software includes conventional charting structures on all time-frames, also back-tested sixty months.
- Common Trade Set-Ups. Included in the software are common trade set-ups that oil day traders implement.
- Order Flow. EPIC IDENT™ is data-driven order flow intelligence in real-time to achieve best outcomes. The software includes and executes to a proprietary order flow identification system that tracks behavior (specifically isolating other market machine liquidity) and weighs identified entities and historical trade patterns to its trade decisions (instructions). EPIC IDENT™ increases its intelligence as it gathers data intra-day specific to liquidity flow, historical patterns, time of day, volatility, various preferences, latency, rejects and more. The method is similar to back-testing charting. However, the process occurs in real-time. In short, the software is looking for “fingerprints” within market liquidity. We cannot back-test 60 months as with charting, but back-testing from date of software deployment has been achieved.
- Time Cycles. Time cycles are within all algorithmic and conventional trading model structures. Order flow also has identified time cycles and other time cycle events such as weekly reporting in oil markets (API, EIA and rig counts). Additionally there are time-of day market time cycles around the world. All of these different time-cycles are included in the software architecture.
Combined, these advantages enable the EPIC v3.3 Crude Oil Trading software to outperform conventional trading methods.
Introduction to Oil Market Trade and Machine Trading.
The world of public market trade is rapidly changing. It is estimated (depending on source) that over 80% of crude oil futures are not traded by humans and are now traded by machines.
Machine trade may be simple, bot style software, high-frequency software or more sophisticated architecture as with the EPIC v3 class of algorithm.
Our team commenced the oil trading software development journey nearly six years ago with algorithmic chart model development. From day one we employed computer scientists to work with us on a daily basis to build software that would emulate our trading methods.
Over time the software started to win more trades than our traders and today we rely almost solely on the software to execute trades. We simply “tweak” the software at each trade sequence to improve performance.
EPIC v3 software is our 3rd generation oil trading software. EPIC v1 tested returns at about 20% per annum, EPIC v2 at 40% per annum and EPIC v4 architecture was too aggressive for our risk threshold. We then chose to focus our efforts on EPIC v3 and have been refining its code trade by trade since.
Account Size – ROI and Draw-Down Volatility.
The smaller the account size traded, the more difficult it is for the software to limit downside risk and provide optimal returns.
An 80 account size will at times see at some volatility (draw-down risk). A 150 account size will rarely see volatility (draw-down risk) and a 300 account size is expected to almost never encounter volatility.
The software is designed to trade within a sequence of trade within structures or set-ups. As the oil market price changes, the software trading logic uses all the different data to update the decision tree utilizing the instruction rule-set.
You can imagine this as a dot plot process similar to the game “Go” – not exactly, but the concept helps to visualize how the software plots a sequence plan for trade.
The “ebb and flow” of regular oil market trade allows opportunity for the software to plot a plan of trade within a sequence. The larger the account, the more dots that can be plotted (trades can be “bite sized” entries within an “ebb and flow”).
To understand the trading methodology of the software in each “sequence” of trade requires a moderately in-depth conversation to review data with a member of our team.
In short, the software uses a positioning (swing trade) protocol for each sequence of trade and a high-frequency intra-day protocol via EPIC IDENT™ technology. On the positioning (swing trade) side of the architecture, this means that as crude oil price is rising the software is building a position short through-out the rally (and the opposite is true if the price of oil is falling). However, the average cost is off-set by the high-frequency component of trade via EPIC IDENT™ technology so that when the trend reverses the software achieves considerable returns.
API / Deployment Architecture.
EPIC v3 software is designed to be deployed remotely – accessing an account and executing trades. This provides the account holder with ultimate control. The account holder grants the software access and the software executes machine trades to the account. Architecture provides opportunity for decentralized platform integration.
This paper outlines the opportunities that can be presented by the growing influence of machine trade on global financial markets.
Competitors within the machine trade industry are becoming more and more refined and successful – the best in class are assumed to be winning a larger portion of proceeds.
The most significant immediate challenge developers face in machine trade is building a product that will perform within a prescribed threshold of downside limiting stability while outperforming conventional trading methods.
Soon thereafter the challenge becomes competing against “like-kind” machine trade peers and being best in class.
It is our expectation that fewer and fewer competitors will achieve more of the proceeds (as a whole of trade in public markets) at an exponential rate, which does provide urgency to development and deployment.
The EPIC v3 trading software achieves consistent, predictable and very adaptable architecture that provides exceptional best in class ROI.
For information about our subscription services that include; oil trade alerts, an oil trading room and oil trade newsletter reporting contact Compound Trading Group at [email protected] or www.compoundtrading.com.
For information about the data behind the trade (results) or utilizing our automated crude oil machine trading platform contact our agent representative Richard Regan:
Email [email protected]
Previous in this document series can be found here:
- January 7, 2021: EPIC v3.1.5 Crude Oil Machine Trade Software White Paper | Updated January 11, 2022 w/ Trade Execution Data
- June 4, 2020: EPIC V3.1.1 Crude Oil Machine Trade Software Update | June 4, 2020 White Paper #OOTT $CL_F $USO $USOIL
- April 19, 2020: EPIC V3.1 Crude Oil Machine Trade Software Update Details | White Paper #OOTT $CL_F $USO $USOIL
- December 29, 2019: How EPIC v3 Crude Oil Machine Trading Outperforms Conventional Trading