Technical documentation

How AQ Agent works, under the hood

This is the technical side of the product, separated from the marketing landing. Here live the architecture, the rules behind each engine, the risk controls, and how to reproduce the backtests. Order execution and risk management are fully deterministic and rule-based. The one AI-assisted step is the Active Growth engine's monthly stock list — proposed by an AI model, frozen with its rationale for audit, and validated forward in paper trading before it can earn more weight.

Architecture

Each client runs their own agent on their own brokerage account — never a shared pool. The system has three pieces:

  • The agent runner evaluates each engine's signals every cycle (roughly every market hour) and submits orders to the broker.
  • The scheduler fires the cycles and reconciles capital against your portfolio's target.
  • The dashboard shows live positions, P&L, decisions and costs — read-only over the broker's state.

Broker credentials are stored encrypted (Vault), scoped to trading only. The agent has no fund-withdrawal connection.

Engines & signals

AQ Agent groups rule-based strategies into five engines. Your portfolio decides which are available; you choose which run.

Growth engine — regime-gated equity growth
Holds SPY (or a SPY + QQQ split in the higher portfolios) while the S&P 500 sits above its 200-day moving average. When the index drops below, it rotates 100% into 1-3 month T-bills (BIL) and waits. The primary return engine.
Active Growth engine — AI-selected stock basket
A concentrated basket of individual growth stocks, from AQ Income up. An AI model proposes the monthly list from a broad liquid universe; each pick is frozen with a one-line thesis, fully auditable. A deterministic 9-signal engine manages entries/exits daily under a crash guard and correlation pruning. By design it carries no backtested return claim — an AI-assisted selection cannot be honestly backtested — so every list is validated forward in paper against the S&P 500.
Defensive engine — multi-asset trend (Faber GTAA)
Holds each asset class (US and international equities, bonds, REITs, commodities, gold) only while its long-term trend is positive; rotates to cash when it breaks. Built to sidestep prolonged bear markets.
Income engine — wheel + iron condor + cash-secured puts
Sells option premium with bounded risk: cash-secured puts that roll into covered calls (the wheel), defined-risk iron condors on index ETFs, and cash-secured puts for discounted entry. These trades pay minimal regulatory/clearing fees per contract.
Crypto engine — BTC/ETH momentum
A BTC + ETH allocation gated by a 100-day moving average, volatility-targeted so it never dominates portfolio risk. Steps aside (cash) when the trend breaks.

Risk controls

  • Per-position loss cap: every position defines its maximum loss before it opens (wing width on spreads, ATR stop on equity).
  • Drawdown circuit breaker: if portfolio drawdown crosses your portfolio's budget, the agent flattens everything.
  • Volatility target: the crypto engine is sized so it can't dominate the book's risk.
  • Regime filter: the growth and defensive engines step into cash when their long-term moving average turns over.
  • Paper-first gate: the Active Growth engine's AI-selected lists must build a positive live paper track record before their allocation can grow.

Backtests & reproducibility

Per-strategy backtests (wheel, iron condor, cash-secured put, multi-asset trend, crypto momentum) and per-portfolio compositions are versioned in the product repository, with their methodology and caveats:

  • services/core/backtests/ — per-strategy backtests
  • docs/validation/bundles/ — per-portfolio compositions

Per-portfolio target returns are forward-looking, not realized returns. They are calibrated against SPY's 2015-2024 baseline and assume the 200-day regime filter behaves consistently with that calibration. Higher growth potential means higher volatility. Past performance does not guarantee future results.

Custody & security

  • Your money never leaves your broker. All trading happens in your own account.
  • API with no withdrawal access. Broker keys are trade-only; they cannot move or withdraw funds.
  • Encrypted credentials. Stored in Vault, rotatable from the dashboard.
  • Paper-first. 60 days of simulation before you can activate real capital.

Source code

The engine, the strategies and the backtests live in the product repository. If you'd like to audit the methodology or run the backtests yourself, reach us at hello@alphaquantagent.com.

AQ Agent is a software service, not a registered investment adviser, broker-dealer, or fund manager. All trading happens in client-owned brokerage accounts. Historical backtest results are hypothetical and do not guarantee future results. Investing carries risk, including possible loss of principal. AQ Agent is not affiliated with Alpaca Securities LLC.