Frequently Asked Questions

Our service provides subscribers with model portfolios (strategies) and timely rebalancing alerts for these strategies. These alerts are sent via private Telegram channels. Our strategies dynamically adjust portfolio allocations based on market conditions, aiming to enhance returns and limit risk. All our strategies have publicly accessible, detailed backtest performance reports that are updated on a regular basis.

Tactical asset allocation (TAA) is an active investment approach involving dynamic adjustments to a portfolio’s asset mix. The primary goal is to enhance risk-adjusted returns compared to passive management by actively shifting allocations based on market conditions.

Backtesting is the process of testing a trading or investment strategy using historical data. It involves applying the strategy’s rules to past market data to see how it would have performed during that period. By analyzing how a strategy would have played out historically, analysts and investors can estimate its potential profitability and feasibility. However, it should be noted that past performance is not a guarantee of future results.

Absolutely. You maintain complete control over your investments. You have the freedom to select the strategy that aligns with your investment goals and execute trades within your own brokerage account. We never have access to your financial information.

Our strategies aim to outperform passive market benchmarks through active, tactical portfolio adjustments. Using proprietary algorithms, they analyze market conditions to dynamically rebalance holdings, seeking to capitalize on favorable trends while mitigating risk during downturns. Some strategies may also employ leveraged, inverse, or volatility-based ETFs to manage risk and potentially enhance returns.

While we utilize AI to assist in data analysis, our strategies are ultimately developed and rigorously backtested by experienced human experts.

We employ several measures to mitigate overfitting, including:

• Keeping the rules and conditions of the strategies simple.
• Minimizing the number of parameters used in the algorithms.
• Testing the strategies across different time periods.
• Ensuring the strategies perform well in various market conditions (regimes).
• Including most fees and potential slippage in the backtest results.
• Using only the day’s closing prices to prevent look-ahead bias.

Yes, we are constantly working on new algorithms. As we create ones that show promise of being profitable while keeping the risk relatively low, we will add those to our catalog.

Occasionally, if we find a way to improve a strategy’s performance, we may modify it.

Our strategies primarily consist of well-known ETFs that have been trading on the stock exchange for at least 10 years. The specific holdings vary depending on the strategy. Please refer to each strategy’s page to see its specific holdings.

Our strategies do not engage in traditional short selling. However, to profit from or hedge against market declines, some strategies may take long positions in inverse ETFs (which are designed to move opposite to a benchmark index) or volatility-related ETFs.

Please see our Key Performance Metrics Glossary. If you have any questions, please do not hesitate to reach out to us.

Our performance reports factor in estimated regulatory fees and 0.05% slippage per trade. They do not include brokerage commissions, as many brokers now offer commission-free ETF trading. Potential internal ETF redemption fees (for holding periods shorter than specified, e.g., 30 days) are also not included, but these are typically minimal.

While our strategies have historically performed very well, it is highly unlikely that you will achieve the exact same returns as the performance reports. Actual results may vary due to factors such as:

• Changes in market conditions compared to the backtest period.
• Slight differences in execution timing and prices.
• Variations in individual brokerage capabilities (e.g., availability of fractional shares).
• Your personal implementation of the strategy signals.

Our backtests are subject to certain limitations, including:

• They assume trade execution at the day’s closing prices, which may not always be achievable in reality.
• They are limited to available historical data and may not account for all possible market conditions.
• They rely on historical data, and there is no guarantee that future market behavior will mirror past patterns.

Not necessarily. While our strategies aim to manage risk and limit drawdowns over the long term, there may be periods where a strategy experiences larger drawdowns than the broad market. Tactical adjustments may underperform during certain short-term market movements. Therefore, we recommend focusing on the strategy’s long-term risk-adjusted performance objectives rather than short-term volatility.

Drawdown recovery times vary significantly depending on the specific strategy and prevailing market conditions; there’s no fixed timeframe. You can review historical recovery performance for each strategy by examining metrics like ‘Longest Drawdown Days’ and ‘Recovery Factor’ in its performance report, but remember that past performance doesn’t guarantee future results.

No. The ‘Maximum Drawdown’ listed in our performance reports represents the largest peak-to-trough decline observed during the historical backtest period based on daily closing prices. Future market conditions may differ, and it is possible that a strategy could experience larger drawdowns in the future than those indicated by the backtest. Backtesting has limitations, and past performance is not predictive of future results.

Tactical asset allocation (TAA) aims to improve returns by identifying and acting on genuine market trends (the ‘signal’) while navigating through random, short-term price fluctuations (‘noise’). However, perfectly separating signal from noise or predicting the market’s future with absolute certainty isn’t possible due to inherent market unpredictability.

Because TAA strategies operate in this environment of uncertainty and noise, periods where the portfolio value declines from its peak (drawdowns) are unavoidable when market movements temporarily go against the strategy. While TAA seeks to minimize these, eliminating them entirely would require perfect foresight. Therefore, it’s important to focus on a strategy’s long-term goals and its ability to capture the ‘big picture’ trend, rather than getting overly concerned with the inevitable short-term noise and temporary drawdowns.

Our backtests are limited by the inception dates of the holdings used in each strategy. The maximum backtest period is determined by the inception date of the newest holding in a given portfolio.

Getting started with Zehnlabs is simple. Follow these three easy steps:

Step 1: Choose a Strategy

• Familiarize yourself with our service through our comprehensive FAQ
• Optionally, use our Retirement Planner to plan your future
• Browse our selection of strategies and select one that suits your risk tolerance and other preferences

Step 2: Subscribe

• Subscribe to your chosen strategy and get added to a private Telegram channel
• Optionally execute trades in your brokerage account according to the latest allocations posted in your channel
• Add our Telegram Bot to your contacts and send a “/start” message

Step 3: Rebalance

• Receive notifications in your Telegram channel when your strategy rebalances (at most once a day)
• Alerts include precise allocation percentages for each holding
• Rebalance your portfolio according to the latest allocations

Automated Trade Execution

You can also choose to deploy an open source community supported script to execute trades in your Interactive Brokers account. Please see the FAQ on automating rebalancing to learn more.

Start by using our Retirement Planner to determine how much capital you need for retirement (or another financial goal) and what investment returns are required to reach your goals. This tool will help you assess which strategy’s historical CAGR aligns with your planning needs.

Consider both the performance metrics and the practical aspects of implementing a strategy in your own account. Each strategy has different characteristics that may make it more or less suitable for your specific situation.

It is highly recommended that you watch the “Getting Started With Tactical Allocation Strategies” video on our videos page. It will help you make an informed decision when selecting a strategy.

It must be noted that historical performance is not a guarantee of future results.

You will need:

• A margin account to avoid issues with the T+2 settlement rule, as rebalancing involves selling and buying assets on the same day.
• Ideally, fractional share trading enabled to minimize idle cash.
• Ideally, DRIP (Dividend Reinvestment Program) enabled. If your brokerage does not offer DRIP, you can manually reinvest dividends.

Yes, you can trade as many strategies as you like. In fact, trading a portfolio of strategies that have some degree of negative correlation can minimize drawdowns and enhance long-term returns. To simplify rebalancing, we recommend using a dedicated account for each strategy you want to trade.

While you can use any brokerage, our research indicates that Interactive Brokers is well-suited for our strategies due to:

• IBKR Lite offers $0 commission trading on most ETFs.
• They allow fractional shares.
• They have a simple dividend reinvestment feature.
• They offer one-click rebalancing with their TWS workstation.
• They are available in many countries.
• There is an open source community script to execute trades in your account.

Keep in mind that if you choose to deploy the community script mentioned above:

• The script is an open source community script without any implicit or explicit warranty.
• Zehnlabs does not provide any support for the community script.
• You will need an IBKR Pro account which is not commission free.
• You will also require a paid subscription to an IBKR data feed.
• Fractional shares are not supported through the IBKR TWS API, and therefore not supported by the script.
• Due to the lack of fractional shares support, the automatic dividend reinvestment feature should also be disabled in your account.
• Only market sell orders and limit buy orders are supported.

For more information on the community script, please refer to the documentation on the script’s GitHub page.

In general our strategies do not dictate a minimum capital requirement. The amount you invest is your personal decision. However, you should make sure to have enough capital to purchase at least one share of each ETF in your chosen strategy.

Yes, our strategies can generally be traded in retirement accounts. Trading these strategies within retirement accounts typically provides tax advantages. Please consult with a tax professional regarding your specific situation.

These strategies may involve frequent rebalancing, which can lead to short-term capital gains that are typically taxed at higher rates than long-term gains. Please consult with a tax professional regarding your specific situation.

Your primary responsibility will be to rebalance your portfolio according to the allocations provided in the Telegram alerts. It is also recommended that you compare your actual trading results with the backtest metrics on a monthly basis to ensure they remain reasonably consistent.

Upon subscribing to a strategy, you will be invited to a private Telegram channel. All rebalancing alerts are posted to this channel, typically 5-10 minutes before market close. You will receive at most one alert per day per strategy.

You can immediately place the necessary orders with your brokerage to rebalance your portfolio according to the latest allocations in the alert. If not possible, you can place your orders in your brokerage account after hours for execution the following morning.

Our backtests assume execution at market close. For best results, we recommend following the same timing. However, if it’s not possible, you can place orders after market hours for execution the next morning.

Ideally, you should use limit orders. If the order does not fill within 20-30 seconds, you can adjust your limit price. However, market orders generally provide quicker execution. Ultimately, which order type you use is a personal decision.

No, our strategies do not use stop-loss orders.

You can choose to deploy the open source community script which rebalances your Interactive Brokers account whenever a strategy rebalance event occurs.

Keep in mind that:

• The script is an open source community script without any implicit or explicit warranty.
• Zehnlabs does not provide any support for the community script.
• You will need an IBKR Pro account which is not commission free.
• You will also require a paid subscription to an IBKR data feed.
• Fractional shares are not supported through the IBKR TWS API, and therefore not supported by the script.
• Due to the lack of fractional shares support, the automatic dividend reinvestment feature should also be disabled in your account.
• Only market sell orders and limit buy orders are supported.

For more information on the community script, please refer to the documentation on the script’s GitHub page.

PDT is a regulatory designation by FINRA in the U.S. for traders who execute a high frequency of day trades, subjecting them to specific margin account requirements. PDT rules do not apply to our strategies because they hold trades overnight and are not considered day trades. With that said, if you manually execute trades in your account outside of a given strategy’s rules, you may be subjected to the PDT rule.

Some brokerages and certain account types may have restrictions on trading certain ETFs used in our strategies. Before starting to trade any strategy, we strongly recommend testing your account by temporarily purchasing 1 share of each symbol that the strategy trades to ensure your account doesn’t have any restrictions.

If you encounter trading restrictions for a given symbol, the following replacement symbols may be used:

Original Symbol	Replacement Symbol(s)	Notes
DBC	PDBC	Direct replacement
UUP	USDU	Direct replacement
VIXY	VXX	Direct replacement
VIXM	VXZ	Direct replacement
UVXY	VXX	Use 1.5x of the allocation
SVXY	USMV	Not an exact replacement

No, there is no long-term commitment. You can cancel your subscription at any time.

Yes, you can switch to a different strategy whenever you wish.

Yes, you can subscribe to any number of strategies. However, we recommend starting with a single strategy until you gain experience. Once you are comfortable, you can diversify using multiple strategies.

After subscribing, you can use the /manage command within our Telegram Bot to cancel or change your subscription.

Please use the /support command within our Telegram Bot or visit our support page.