Frequently Asked Questions

General

Is QuantMage an investment adviser?

QuantMage is neither a broker-dealer nor an investment adviser. It’s a software-as-a-service tool you can use for your investment at your own discretion.

Is QuantMage free to use?

While QuantMage isn’t entirely free, we offer a 14-day trial that doesn’t require any credit card details. For a detailed breakdown of our pricing, please visit our pricing page.

Is QuantMage suitable for day trading?

QuantMage is designed for trading at most once per day, based on the spell’s When To Trade setting. And the resolution of data it uses for backtesting and trading is also daily. It’s not tailored for high-frequency day trading.

Are options or cryptocurrencies available for trading on QuantMage?

Currently, QuantMage doesn’t support trading in options or cryptocurrencies.

How does threshold trading function?

Threshold trading kicks in when the difference between an asset’s target and current allocation percentage exceeds a set threshold. For instance, with a 10% threshold, if the target allocation is 30% but the current allocation is 19%, the 11% difference triggers a trade.

What’s the schedule for weekly/monthly/quarterly/yearly trading?

Trades are initiated on the very first market day of each designated period, whether it’s a week, month, quarter, or year.

Absolutely! You can make your spell public and share its URL. While others can view and run backtests on your spell, they won’t be able to modify it unless they’re registered users who can clone the spell.

Concerned about keeping your trading logic confidential?

We totally understand! With Grimoire’s Export/Import feature, you can ensure your spell isn’t permanently stored in our database. However, do note that this means you won’t be able to utilize it for automated trading.

Can I access it from outside the US?

Absolutely! You can enjoy our services from anywhere in the world. Automated trading requires that the brokerage operates in your region. Plus, our trusted payment partner, Stripe, ensures seamless transactions from a wide range of countries.

What’s the best way to migrate from Composer?

It’s awesome that you’ve already started your systematic investment journey on Composer! For a smooth and easy migration to QuantMage, check out this guide. You’ll feel at home right away!

Backtesting (Grimoire)

How accurate is backtesting?

Our backtesting operates on the assumption that the spell logic uses the day’s closing asset prices, and trades are executed at these prices. Automated trading will happen each day (if the trade setting requires it) near the market close, so in most cases, the discrepancy will be minimal. Still it can introduce a noticeable difference in volatile markets (especially if the logic ends up in another branch due to the slight price differences). Simulated trading also assumes fractional shares (or that it starts with big enough capital that the fractionality of shares doesn’t matter.) So these can be a source of discrepancy. Other than these, the same evaluation engine is used for both backtesting and live trading.

Is historical data backtesting uses reliable?

Absolutely! We source our data from a top-notch provider, ensuring you get dividend- and split-adjusted historical prices.

My backtest shows impressive returns. Can I trust it?

With historical data and enough degrees of freedom (i.e. enough number of knobs you can tweak), you will be able to get an impressive result if you try long enough. As they say, past performance is not indicative of future results and if it seems too good to be true, it probably is. While it’s tempting to chase high returns, legendary investors are celebrated for consistent, modest annual gains. It’s wise to have a straightforward, easily understandable strategy rather than an overly complex one.

How far back can backtesting go?

Our engine backtests using all available historical data (from our source) for the underlying assets.

Trading (Cast Spells)

Which brokerages are compatible with QuantMage?

At the moment, we support Alpaca. Alpaca offers free paper trading in addition to live trading, allowing you to explore QuantMage’s capabilities risk-free.

Is there commission for trading with Alpaca?

Good news! When you trade U.S. equities with Alpaca, you won’t be charged any commissions. However, there might be other fees to consider. For a detailed breakdown, we recommend checking out this discussion on Alpaca’s official forum.

When are trades executed?

To align with our backtesting methodology, we aim to execute all trades close to the market end time of each trading day.

Are there instances when trades might not execute?

Yes, there can be unforeseen circumstances, from bugs on our end to trading issues at the brokerage level, like low-volume or stock delisting. Rest assured, we’ll keep you informed and maintain transparency at all times.

Can I mix my manual trading or trading from another app in the same brokerage account?

It’ll be like a couple dancing together, but to different tunes. They will keep stepping on each other’s toes. Therefore it’s strongely recommended that you use it only for QuantMage and do not allow trading from any other sources to avoid potential issues.

Can you explain paper trading?

Paper trading is similar to real trading but uses virtual money. However, certain aspects like stock dividends and splits might not be covered. For a comprehensive understanding, check out Alpaca’s documentation.

Why might there be a difference between live trading and backtested results?

The primary reason is the timing of trades. Market volatility can lead to significant price shifts near closing time. As backtesting assumes trades and logic evaluations use closing prices, real-time trading, which uses the latest prices at trading time, might yield different outcomes. If the spell involves non-fractional tickers and your capital contributed to it is not big enough, those non-fractional tickers won’t be able to closely track their target allocations. QuantMage’s warning about non-fractional ones with a cube icon will come in handy to mitigate this.

Why aren’t low-volume tickers recommended?

We source our real-time price data from the IEX Exchange, which doesn’t cover the entire market. For stocks with low trading volumes or liquidity, IEX might show very little or even no activity. This can lead to real-time prices that are inaccurate or outdated for those tickers. To ensure you’re getting reliable and up-to-date information, we recommend focusing on stocks with higher trading volumes.

What about dividend payouts?

If your spell remains active through the dividend payment date, any cash dividend you receive will be automatically reinvested to the same spell it was originated from. This default behavior can be turned off per spell, though. It’s all part of making your investment journey smoother.

If I invest in multiple spells, will I be labeled a pattern day trader?

No stress there! Our smart trading engine groups all the necessary actions, handling net sells before net buys each day. So, you won’t get tagged for day trading.

What’s the max number of tickers I can use in a spell?

Keep in mind, Alpaca has a rate limit of 200 requests per minute for each account. If your spell’s magic leads to more than 200 trades in a day, there might be a hiccup. So, choose wisely!

Is it a good idea to invest all the funds in my brokerage account into QuantMage spells?

I recommend leaving some extra cash as a buffer. Investing all your funds can cause issues with buying orders for shares that aren’t fractional due to last-minute price fluctuations and insufficient buying power. To avoid this, keep at least 0.1% of your funds as a buffer. If many of your spells can be in non-fractional positions simultaneously, consider keeping even more as a buffer. For example, if your account has around $10,000, leave at least $10 as extra cash. This ensures smoother transactions and better execution of your investment strategy.