HYDRA Strategy


  • INSTRUMENTS TRADED: Double Leverage Stock Indexes S&P500, Nasdaq100, Russell2000, Gov't Bond, Precious Metals Stocks Index, Energy Stocks Index. Implemented using frequent traded Profunds or Rydex mutual funds. Can also be traded with ETFs.
  • TRADING FREQUENCY: Signals generated daily approximately 15 minutes prior to market close.
Click to view independent third-party verification by TimerTrac. Note: Hydra began actual trading Jan 1st 2016 but TimerTrac began verification Feb 2016


HYDRA can be described as a highly active sector rotation strategy which provides long exposure to a variety of markets such as Broad Based US Indexes, Treasury Bonds, Metals and Mining Index, Energy Index, etc.

HYDRA can be considered an aggressive strategy - although it trades multiple asset classes, it invests in only one asset at a time resulting in concentrated exposures. The trading frequency is relatively high where it can switch between assets frequently. Holding periods of trades can range from 1 day to several days. It can also remain in cash for several days if no opportunities are detected.

Unlike traditional sector rotation strategies, HYDRA is not based on relative strength of price momentum among the assets. Instead, the system has a unique rule set for generating signals for each asset. The rule sets are based on economic forecasting models as well as price momentum and price reversion indicators. A 'meta-system' then evaluates the aggregate basket of assets and systems in order to establish a single daily position.

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This strategy is recommended for traders that can commit to being at their computers during the last 15 minutes of every US trading day. This is when the HYDRA trades are generated and you will implement in your account accordingly. Important note: because this is a daily trading active system, you will not receive email notifications of signal changes - you will need to log in every day in the last 15 minutes of the US session to check for new trades.

For those who are not able to trade at the close, the strategy can be traded at the market open of the following day. You would trade the ETF by simply placing a 'Market on Open' order at night. Here is a comparison of trading at the close versus trading at the next day open - while performance has been slightly lower trading at the open, it has had periods of outperformance and both methods may have similar performance when averaged over a longer time frame:

If you are unable to trade Hydra by yourself due to time limitations or lack of comfort level, it can be auto-traded in your own account by a professional money manager. For details please visit our Auto-Trading page for details.

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