I just read the comments. When it comes to strategies:
① They can overfit to a particular period. For example, my event contract strategy had 35 trades over the past three days, with 6 losses, and even a 12-win streak. This clearly shows that it overfit to choppy market conditions. During a steady grind up or down, or in periods of low volatility, you can indeed get consecutive losses.
② When the market is grinding up or down, or volatility is low, your actual win rate on event contracts is also low even if you trade manually without a strategy. That’s simply one of the issues with this product.
③ Strictly speaking, strategies include range-bound, bullish, and bearish strategies. But with event contracts, one-way upward or downward moves account for less time than choppy conditions. So you need to know exactly where your strategy is applicable, and make your own judgment when the market is grinding down or up, or when volatility is falling in a sideways market.
④ A strategy gives you a baseline win rate over the long term. A review of 320 trades currently shows a 60% win rate. This review wasn’t done with a one-click backtest—relying on one-click backtesting is just taking the easy way out. Strictly speaking, you won’t know which periods lost money. A proper review means manually examining each trade’s entry point, including trades made during choppy, one-way, and sideways markets, as well as periods of gradual rises and falls. The standout periods are choppy markets, with a 75%–85% win rate; the weakest are periods of low volatility when the market grinds up or down.
⑤ It’s crucial to understand why the strategy has a 60% win rate, where the other 40% goes, what its weaknesses are, and when it can be used. I have a quantitative system myself, and frankly, no quantitative strategy can perform well all year round. That’s when you need multiple strategies and a person to decide whether to use a strategy that shorts at highs, goes long at lows, or trades a range around the midpoint.
⑥ A strategy can overfit to a particular phase (ranging, pumping, or dumping), and its higher win rate depends on the user. The key is knowing whether to use a particular strategy in the current market. A rules-based strategy without emotions can give you a higher baseline win rate. It can get you 80% of the way there, but you still have to decide the remaining 20% yourself.
① They can overfit to a particular period. For example, my event contract strategy had 35 trades over the past three days, with 6 losses, and even a 12-win streak. This clearly shows that it overfit to choppy market conditions. During a steady grind up or down, or in periods of low volatility, you can indeed get consecutive losses.
② When the market is grinding up or down, or volatility is low, your actual win rate on event contracts is also low even if you trade manually without a strategy. That’s simply one of the issues with this product.
③ Strictly speaking, strategies include range-bound, bullish, and bearish strategies. But with event contracts, one-way upward or downward moves account for less time than choppy conditions. So you need to know exactly where your strategy is applicable, and make your own judgment when the market is grinding down or up, or when volatility is falling in a sideways market.
④ A strategy gives you a baseline win rate over the long term. A review of 320 trades currently shows a 60% win rate. This review wasn’t done with a one-click backtest—relying on one-click backtesting is just taking the easy way out. Strictly speaking, you won’t know which periods lost money. A proper review means manually examining each trade’s entry point, including trades made during choppy, one-way, and sideways markets, as well as periods of gradual rises and falls. The standout periods are choppy markets, with a 75%–85% win rate; the weakest are periods of low volatility when the market grinds up or down.
⑤ It’s crucial to understand why the strategy has a 60% win rate, where the other 40% goes, what its weaknesses are, and when it can be used. I have a quantitative system myself, and frankly, no quantitative strategy can perform well all year round. That’s when you need multiple strategies and a person to decide whether to use a strategy that shorts at highs, goes long at lows, or trades a range around the midpoint.
⑥ A strategy can overfit to a particular phase (ranging, pumping, or dumping), and its higher win rate depends on the user. The key is knowing whether to use a particular strategy in the current market. A rules-based strategy without emotions can give you a higher baseline win rate. It can get you 80% of the way there, but you still have to decide the remaining 20% yourself.