Strategy Runner Ltd.

156 N. Jefferson, Suite 301

Chicago, Ill. 60661

Phone: (312) 798-4425

E-mail: info@strategyrunner.com

OVERALL RATING: Good

LEVEL: Intermediate

COST: A per round turn fee is added to the brokerage transaction cost, ranging from $0.50 to $1. Some vendors charge for their strategies; charges vary considerably.

HARDWARE REQUIREMENTS: Internet access (DSL/cable).

If you've been to a trading conference in the past year, you no doubt have encountered the concept of automated trading. While having someone else make trades for your account or trading on the advice of a pre-programmed mechanical system is nothing new, full trading automation from analysis to execution is achieving another level of public acceptance, and vendors are stepping up to meet the demand.

Strategy Runner is one such vendor. It is, on one hand, a trade execution front-end in the same vein as Patsystems' J-Trader and Trading Technologies. However, while you certainly can trade discretionary using Strategy Runner, it has carved out a niche as an automated trading platform.

With Strategy Runner's fully automated trading platform, a trader can choose from a myriad of strategies to apply to foreign and domestic electronically traded markets. You can develop your own approaches, but the product is slightly tilted toward using the library of models already programmed into Strategy Runner.

By providing all the tools necessary from analysis to execution, Strategy Runner is a turn-key product that delivers fully automated trading similar to managed futures without the incentive and management fees. This is a product for retail traders interested in adding futures to their portfolio and distributing capital across various asset classes.

TECHNOLOGY SUPPORT Good

While a strong technological foundation is important for all electronic trading products, it's more vital for a product that handles several levels of your trading process.

A platform such as Strategy Runner should be able to ensure 100% uptime. This is a strong point for this product because the servers hosting the strategies are located in various clearing firm's headquarters and orders are routed directly to the electronic matching engines of the exchanges. In other words, the strategies and orders don't need to originate on your personal machine, and trades are routed directly from the broker to the exchange.

However, the software doesn't do everything. You still need to monitor the transactions as you would with any trading operation. It is necessary to check preliminary statements and reconcile any out-trades so errors do not become a liability. You still need to remember that trading is a business.

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While the support team's answers to inquiries are generally satisfactory, the speed can be an issue at times. However, there is an active online support forum, and the documentation is clean and easy to follow.

STRATEGY SELECTION Good

Are you a trend follower in physical commodities, or do you like day-trading stock indexes? Strategy Runner comes pre-packaged with techniques that fit both descriptions and some in between.

The bulk of Strategy Runner's approaches are based on logical rulebased tactics. The user needs to filter out the risk criteria of various models to reach a comfort level where he understands the exact possibility of losing vs. winning and what it takes to live with system trading. "Don't stop trading in a drawdown" is an important rule to remember as is protecting risk capital with aggressive money management.

Once you have confidence in the process, the next step is to open an account with a brokerage house that supports Strategy Runner. The brokerage will send you the login information and the pertinent server setup details--it is all very simple.

It's always good to weigh the pros and cons of an execution tool and the obvious benefits of the instant execution of orders. The approach means no more fumbling on getting in those orders. Another nice feature, thanks to the automation, is the precise accounting available within the software as well as the integration of various models that allow instant portfolio solutions.

One nuance to keep in mind is that if you stop a strategy, it will go into the market to offset your position. This is important to know because entering an offsetting trade and then stopping a strategy will result in duplicated orders.

Strategy Runner also offers system development tools--it doesn't force users to adopt a plug-and-play approach. A backtesting and optimization module called Strategy Tuner is available for the software. It provides an interface for both trading rule development and advanced order definitions. Testing is supported down to the tick level. For those with advanced programming knowledge an API is available for system development in C++.

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SUMMARY

While there certainly is debate about turning on an automated strategy and letting it run in the markets with little interference, that's a question to answer before you consider Strategy Runner. If you have already answered that question for yourself in the affirmative, then Strategy Runner offers a quality product for your auto-execution needs and the pre-programmed strategies add to the package.

REVIEWED BY ROB KEENER