Stop believing those so-called Martin strategies with a 100% win rate—they’re a death sentence.
A lot of people in the crypto world like to use Martin strategies (doubling down against the trend). They look extremely profitable, but in extreme one-sided crash markets, this is suicide.
The bottomless pit of capital: every time the market drops $1\%$ you double your position. If you encounter even one chain of black swan sell-offs like the recent ones that don’t turn back, your position will expand exponentially and instantly fill up your risk exposure.
The core is strict drawdown control: the systems that truly survive are absolutely not blind averaging down, but hard-core maximum drawdown control (MaxDrawdown). The strategy locks in the drawdown limit from the start, and once the threshold is hit, it automatically executes risk control without fail.
Rather take a stop loss than hold a losing position.
$#quantitative models #risk control architecture #Martin strategy #Bitcoin
A lot of people in the crypto world like to use Martin strategies (doubling down against the trend). They look extremely profitable, but in extreme one-sided crash markets, this is suicide.
The bottomless pit of capital: every time the market drops $1\%$ you double your position. If you encounter even one chain of black swan sell-offs like the recent ones that don’t turn back, your position will expand exponentially and instantly fill up your risk exposure.
The core is strict drawdown control: the systems that truly survive are absolutely not blind averaging down, but hard-core maximum drawdown control (MaxDrawdown). The strategy locks in the drawdown limit from the start, and once the threshold is hit, it automatically executes risk control without fail.
Rather take a stop loss than hold a losing position.
$#quantitative models #risk control architecture #Martin strategy #Bitcoin