WHAT IS LOD TRADING?

A "Letter of Direction" (LOD) is a powerful and innovative approach to investing and trading, offering numerous benefits and possibilities for traders of all levels of experience.

With LOD trading, individuals authorize a trusted third-party, usually a professional money manager or broker, to execute trades on their behalf based on a predetermined set of rules and guidelines, or in our case, to follow the signals from a particular trading system.

This method empowers investors to take advantage of market opportunities even when they are unable or prefer not to actively participate in making day-to-day trading decisions.

Whether you are a beginner, an experienced trader looking to diversify your portfolio, or simply seeking an effective way to enhance your financial growth while minimizing the time commitment, LOD trading offers an exciting opportunity.

Join us on this journey and unlock the remarkable possibilities that "Letter of Direction" trading can bring to your investment endeavors.

BENEFITS OF LOD TRADING

Now, let’s delve into the numerous advantages of LOD Trading:

ADVANCED INVESTMENT STRATEGIES:

LOD trading offers the potential to access complex trading strategies that might otherwise be challenging for individual investors to understand or implement.

Sophisticated investment strategies, derivatives, or alternative investments may be employed to enhance portfolio performance.

CONTROL:

While investors delegate trading decisions to professionals in LOD trading, they still maintain a high level of control.

Your account at your brokerage. You can add or withdraw funds at any time. You can stop the trading and close the account if you want.

PROFESSIONAL GUIDANCE:

One of the significant benefits of LOD trading is having access to professional trading software executed on a professional platform. Emotions are removed… have a professional trade a pro strategy in your account, without paying hedge fund or money manager type fees!

By leasing an indicator used by professional traders and funds, you are able to use trading programs previously only available to large hedge funds.

Leveraging a professional trading tool with a reputable introducing broker or investment manager, you gain access to their economy of scale and pricing models, as well as expertise, aligned with your financial goals.

Did we mention that there is also no Pattern Day Trading restriction?

TIME-SAVING:

LOD trading is particularly advantageous for individuals or businesses lacking the time required for in-depth market research and analysis, or sitting in front of a computer and trading for themselves.

By entrusting your investment decisions to professionals, you can focus on other priorities without compromising your financial aspirations.

DIVERSIFICATION:

Skilled investment professionals can help you create a diversified portfolio tailored to your risk tolerance and investment objectives with more non-traditional assets!

That means spreading your investments across different - especially non-traditional - asset classes, reducing the impact of potential losses and enhancing potential returns.

RISK MANAGEMENT:

LOD trading allows investors to define their risk appetite in the Letter of Direction, enabling investors to construct portfolios that align with the desired level of risk.

Through monitoring and adjustment, investors can better protect your investments and optimize potential returns, and this is transparent and simple in an LOD program.

TRANSPARENCY AND FAIR:

All clients in the LOD program receive the same price execution for every order.

Regular reporting and communication ensure that investors are well-informed about their portfolio's performance, holdings, and any changes made on their behalf.

TAX SAVINGS:

Almost all of the LOD programs fall under the IRS Rule 1256 tax treatment, which is far more beneficial. For more details, speak to your tax professional about this.

RISKS OF LOD TRADING

While LOD trading can offer some benefits, it also carries certain inherent risks. Here are some key risks associated with "Letter of Direction" trading:

POTENTIAL FOR ABUSE:

In LOD trading, there is a risk of abuse by the designated trader. They may engage in unauthorized trading, excessive trading (churning), or commit fraud. In such cases, the investor may suffer significant financial losses without immediate awareness.

We work to mitigate this risk by carefully selecting the professional companies to work with that have a long history of success, but also compliance and integrity.

INFORMATION ASYMMETRY:

Investors may face challenges in obtaining complete and timely information about their investments since they rely on the designated trader for reporting. This lack of transparency may expose them to risks that they are not adequately aware of, such as hidden fees, excessive risk-taking, or poor performance.

REGULATORY COMPLIANCE:

LOD trading involves compliance with complex regulations governing the securities industry. If the designated trader fails to adhere to these regulations, both the investor and the trader may face legal and regulatory consequences, resulting in potential financial penalties, legal actions, or reputational damage.

OPERATIONAL RISKS:

LOD trading is subject to practical dangers associated with executing trades, such as technical glitches, errors, or delays in trade execution. These operational risks could result in unfavorable execution prices or missed investment opportunities.

LACK OF OVERSIGHT:

Since the investor generally delegates trading decisions to the designated trader, they may not actively monitor their investments, potentially overlooking irregularities or discrepancies. This absence of proactive oversight may lead to delayed identification of problems or missed opportunities to correct investment strategies.

To mitigate these risks, investors should thoroughly research and carefully select the designated trader, clearly communicate investment objectives, closely monitor investment activity, and maintain ongoing communication to ensure transparency. Regularly reviewing and verifying trade confirmations and account statements can also help identify any potential issues. Seeking independent advice and staying informed about regulatory changes are essential steps to safeguarding investments.

Want to learn more and get started with your LOD strategy?

Click the button and fill out the form to learn more and get started with the Letter of Direction programs available through Target Trading Academy!