| markets have been extremely news driven and hyper volatile. in the last update 'Potential Breakout' I covered the potential breakout we are seeing now and the big picture thoughts around the cycle.
heres how the systems have been doing recently. but before that i get asked a lot about how to evaluate systems when even a simple moving average systems give a buy/sell.
lot of folks rely on some form of backtesting.
they want a theoretical backtest from the beginning of time like they are some HFT quant firm shaving of nano-seconds from their model.
its mostly useless coz crypto is a relatively new asset class compared to bonds stocks or commodities.
so the data is limited. also as adoption increase the personality of how it trades also change.
btc used to casually put in 30% up and down days last cycle for random reasons. now even a 1% moves causes CT meltdown.
since its a 24h trading asset, system would have taken trades during random hours which you would not be able to. and those could wrongly skew the results significantly. so what can be done? - select a timeframe HTF/LTF
that aligns with our personality.. good scalper trader is not necessarily a good thesis or swing trader and vice versa. - select a asset you are comfortable trading
old saying in wall street is if you dont know the personality of the stock you are trading then you are at a disadvantage.
some memes will trade differently to alts. some are inherently mean reverting some trending.
- now run your system and only check for
HOW SOON it catches the reversals on both bullish and bearish sides.
HOW CLEAN the signals are. that allows you to not only get in sooner but stay in the trade.
its always lag or chop that kills returns.
good systems stay consistent and universal across timeframes and assets.
lot of folks have different MA crossovers or vwaps or adx or RSI or supertrends or combinations on different settings on different timeframes.
most work on paper but if you have so many moving parts before taking a trade
then execution becomes difficult if not impossible.
the only judgement you should rely on is for sizing your trades else you are likely to be in analysis paralysis mode.
Here are the recent result on 4H (i like this for catching big moves) across the board.
everyone's talking about GOLD. by march it become consensus.
so then do you enter seeing all the capital flight leaving us asset thesis all over?
or are you buying the top?
both thoughts have merit but its easier to follow the market.  GOLD below is S&P500. area marked in circle is when Trump began his tariff tantrum. second one is yesterday
when he calmed the markets saying no intension of firing Powell nor tariffs will be as high on china.
now you can read this anyway you want but from a systems perspective it was early on both sides.  US500 BTC strongest of the lot considering everything else around was crumbling (except GOLD) was going through its own thesis shift.
is it beta to stocks or gold or something else? system catching the last reversal on crypto on extreme bad news was good.  BTC  SOL  DOGE  PEPE
see you in the next one. | 
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