The trading software released by DTL Capital to help investors identify profitable short-term trades has received high praise from industry insiders. To learn more, we spoke with Thomas Joyce of Knight Capital.
The following is the transcript of a recent interview with Thomas Joyce of Knight Capital. Interview conducted by Chris Mitchum from Alumni Media Associates. Alumni Media is an independent press company that submits to 18 daily newspapers, 245 weekly newspapers and a huge range of related specialist, locally focussed, print publications. They reach a combined audience of about 17.4 million readers each month, often providing unique local content.

DTL Capital has continued to produce excellent returns for users in challenging market conditions. To find out more we spoke with industry expert and regular contributor, Knight Capital’s Thomas Joyce.

Q: How does the DTL Capital Program work?

TJ: It’s a program you run while the market is closed. Each night, when the market closes the program updates its database with all the information that transpired on the stock exchange that day. It then automatically analyses the full history on each stock and the market as a whole, applying a series of technical analysis indicators. By identifying individual stock patterns it pinpoints where stocks are in their cycle and determines whether the stock is likely to rise in the short term. The program than provides buy and sell alerts for the user.

Q: Do you require experience to operate the software?

TJ: The program is what they call fully-automated, this is a new feature for public software users. It essentially means that the software does the leg work for you so you don’t need any trading experience to follow it. It completes the analysis and provides the recommendations on what to buy and sell.

Q: Is this a new style of trading?

TJ: The fully-automated technology is new to the general public, to the best of my knowledge DTL Capital has that part of the market cornered. However the actual analysis the program does is not new at all. The program uses technical analysis which has been in use for decades. The reason DTL are so popular is that technical analysis is a very effective way to trade stocks but it is an extremely time consuming and difficult skill to master. The DTL Capital Program allows even the most inexperienced traders to capitalise on its benefits.

Q: Is it time consuming?

TJ: Not at all, it’s fully-automated so you don’t need to spend time researching stocks or analysing charts. It takes a couple of minutes to check it and then a couple of extra minutes if it tells you to do any trades.

Q: We’ve interviewed you before Thomas and you’ve been quite critical of software programs. Why is this so different?

TJ: I still am critical of trading software. Most trading software relies on the user to have the knowledge and time to apply their own technical analysis. If you’re a first time trader it’s unlikely you will have the necessary skill to successfully utilise a trading program. A standard charting program needs time and practice and ability. We study for years to get the necessary skills to analyse charts, it’s unrealistic to think someone can buy a normal non-automated charting program and become an expert at reading charts overnight. The DTL Capital software is very different from a normal program, it’s fully-automated so anyone can turn it on and follow it. It determines what you need to buy and sell so you don’t need to be a stock market expert or a computer genius to operate it. The proof is in the pudding, DTL Capital has achieved great results for their clients and in this industry it’s all about the bottom-line so they deserve the accolades they’re getting.

Q: Since the program is picking stocks and producing excellent results, will this style of program eventually replace investment managers?

TJ: I don’t think so. Although DTL Capital has been achieving great returns for clients, it’s not a wide-reaching technology. The program relies on the ability of individual investors to enter and exit the market very quickly. To do this, parcel sizes have to be quite small, that suits small private investors but realistically with the amount of money Knight Capital or any investment company trade we wouldn’t be able to utilise this style of software. We use similar techniques but on a far greater scale. The DTL Capital Program will help a private investor make a few thousand dollars a week but it’s not a form of trading that translates into high cost investing.

Q: Clients using the DTL Capital Program have managed to make money even when the market is going backwards. If you’re using similar techniques and on a far greater scale like you say, then why are the investment banks suffering such big losses in the same conditions?

TJ: When you’re a DTL Capital client and you’re trading a small portfolio with a maximum of ten shares, and only a few thousand invested in each share then you aren’t exposed to market conditions in the same way as the large institutions are. It’s pointless comparing what we do to what DTL Capital clients do though, it’s two very different forms of trading. When users of the DTL Capital software are told to sell a share because it starts going backwards they go straight online and off load their tiny holding. When you’re trading in the millions we can’t just offload all of our shares after the slightest market move. If we offload large holdings then the market is flooded with shares and this over supply would only serve to damage the share price even further. We have to take a more long term approach to trading and don’t have as much flexibility as a small investor. Our returns are more reflective of the general performance of the market, whereas DTL Capital aren’t subject to market conditions as they simply pick individual shares, take a quick profit and then re-invest that money back into the next share the program picks. They repeat the process over and over, completing a series of conservative trades which ultimately produce a very consistent return despite what the market is doing. I give credit where credit is due, DTL Capital has produced brilliant results for clients but you can’t compare what we do to what they do, it’s a completely different way of trading.

Q: So your job is safe?

TJ: I’d like to think so but I’m not sure anyone feels their job is safe in this economic climate.

Q: Very true. Overall, what are your impressions of the DTL Capital Program?

AG: I like it. It’s simple to use, it’s suitable for all traders regardless of their experience levels and it works. You can’t do more than that.

Interview conducted by Financial Writer Chris Mitchum from Alumni Media.