US Fleet Tracking CEO plans hedge fund based on algorithm he created

The hedge fund works using the concept of momentum-based algorithmic trading.

“This is black box trading with a computer,” McGuire said. “It takes the emotion out of your decisions and bases everything on mathematical programs.”

The algorithm makes rapid trades based on predictions whether a stock price will rise or fall.

“We're not staying in a stock for six months,” Hunter said. “We're staying in there for a few hours and waiting for it to make the turn and then we're getting back out.”

The hedge fund will only be open by invitation to wealthy individuals with a net worth of $1 million or more — not including the value of an investor's home.

Hunter and McGuire will collect a percentage of the profits from the hedge fund as management fees. They have retained Ernst & Young to monitor accounting and compliance for their company.

Hunter said that while his algorithm may appear complicated, it's actually pretty simple. As a computer programmer, Hunter is trained to look at data and analyze it.

“I'm just a computer programmer — a math guy,” Hunter said. “Everything is usually simpler that it appears. You write a series of instructions. It's all based on logic.”