In the past week, mainstream coins have repeatedly spiked at high levels, resulting in significant losses for short-term strategies. The CPI data on the 11th met expectations, and there will be PPI data released tonight!

In the face of the three highs of Bitcoin, please remain rational
New price highs, new open interest highs, new liquidation highs after a sharp drop

After Bitcoin broke the historical high of $100,000, it sharply dropped to $90,000, creating the largest daily liquidation volume in history, exceeding $500 million

The main reason for this sharp drop is that the open interest also reached a historical peak, with a large number of high-leverage speculators blindly chasing the rise, leading to a vicious cycle of forced liquidations, ultimately resulting in many speculators losing all their capital. High-leverage speculative behavior not only exacerbates market volatility but also highlights the importance of risk control in the market.

In such an extreme market environment, investors should always remain rational and avoid being driven by greed to blindly increase their positions. They can reasonably assess their positions based on market volatility and strictly control risks. Meanwhile, short-term fluctuations should not affect long-term planning. It is recommended that investors adopt quantitative strategies, focus on asset allocation and risk management to cope with the high volatility characteristics of the crypto market. Only with a stable mindset and scientific investment can one remain undefeated in the market.

In the past week, the prices of mainstream cryptocurrencies have remained in a high-level consolidation phase, with some wear on strategies during the volatile market. The implied volatility of mainstream cryptocurrencies has declined, and there has been a rotation of rising trends among different cryptocurrencies. Pay close attention to the non-farm payroll data release on December 6 at 21:30 (Hong Kong time);

These factors prompted me to decisively increase the weight of the SOL strategy
1. SOL market capitalization exceeds 100 billion
Market capitalization is a key indicator of cryptocurrency assets. When SOL's market capitalization exceeds 100 billion USD, it indicates that it has gained high recognition in the market and liquidity has improved. Based on this, I decisively increased the weight of the SOL strategy.

Market capitalization below 50 billion USD: weight allocation below 5%
Market capitalization in the range of 50 billion - 100 billion USD: weight allocation from 5% to 10%.
Market capitalization above 100 billion USD: weight limit up to 20%.
During this period, dynamically adjust positions to control risk based on signals such as volatility and trading volume.

2. Application of SOL implied volatility data
Implied volatility is a key parameter in options pricing, reflecting the market's expectations for future price fluctuations of SOL. On August 14, 2024, the SOL implied volatility index launched by Volmex Finance aids traders, and analyzing this data can optimize investment strategies.

3. Correlation of SOL with mainstream coins
In a portfolio, the correlation of varieties affects risk diversification. After SOL is included in the mainstream coin portfolio, the average correlation decreases. This change optimizes the portfolio and reduces portfolio risk.

4. Applicability of SOL's time series momentum strategy
The trend-following quantitative strategy of mainstream coins BTC and ETH is also applicable to SOL, with the time series momentum strategy being particularly representative. This strategy makes decisions based on SOL's historical price analysis of trend direction and intensity.

In summary, by comprehensively considering SOL's market capitalization, implied volatility, correlation, and time series momentum strategy, I decisively improved the strategy weight, explored SOL's potential while controlling risk, and achieved long-term stable asset appreciation.

This week's strategy profit mainly comes from ETH/ADA/AVAX, while BTC/Doge is consolidating at high levels. The market is showing a clear rotation trend, implied volatility continues to rise, and contract trading sentiment is high. It is necessary to continue to grasp the market热点动态, and a small portion of long-term bulls are still holding positions!

The Turkey Problem: Followers Lose Everything!
The "Turkey Problem" was introduced by Nassim Nicholas Taleb in his bestselling book "The Black Swan". It tells the story of a turkey that, at first, is fed every morning by a farmer who brings a bowl of corn. Over time, the turkey becomes accustomed to this routine, and every morning, upon hearing the farmer approach, it knows it’s time to eat. Gradually, the turkey concludes a pattern: whenever the farmer approaches, it’s time for a feast, and this is the happiest moment of its day.
On Thanksgiving Day, the farmer approaches the turkey coop as usual, and the turkey rejoices as always. However, what the turkey doesn’t realize is that the farmer is not carrying corn, but an axe. Because it’s Thanksgiving, the farmer has come to kill the turkey for dinner. The poor turkey, facing its imminent death, may not understand why the pattern it deduced - “the farmer comes, there’s corn to eat” - no longer holds true.
The essence of the Turkey Problem is that we forcefully seek patterns in events that have no patterns, or we generalize from a limited small sample to draw conclusions. In financial investment, this behavior is commonly seen.
In the investment field, we often encounter strategies or models that perform excellently in normal market conditions, but when a trend emerges, the losses can be catastrophic. This phenomenon is vividly referred to as the “Turkey Strategy”, like fattening a turkey only to slaughter it later.

Crypto Quant Channel: Don’t wait until the trend arrives to start understanding the trend; the trend is your long-term friend.

Subjectively, I and my fellow coin friends all think that ETH is not doing well. Fortunately, the trend tracking strategy does not have subjective opinions. I look forward to a new high in net value!

The layout is broader; the money lost now will be insignificant to you in the future.

Potential Client: An annualized 90%+ sounds like a scheme to exploit investors?

Crypto Quant Channel Brother: Historical performance is objective, but it does not guarantee future results.

Potential Client: So if I invest 20,000 can I make 10,000?

Crypto Quant Channel Brother: The amount of profit is unpredictable, but I can assure you that the strategy is optimized and enhanced every year. My suggestion is to allocate a small portion of idle funds long-term into reliable growth-oriented quantitative trend-following strategies to avoid investing a disproportionately high amount.

In the past week, the prices of mainstream currencies continued to rise and entered a high consolidation phase. CPI was in line with expectations, while PPI was slightly higher than expected. The chairman of the Federal Reserve said that the US economy is strong, so there is no need to rush to cut interest rates. The market implied volatility has decreased, investor sentiment has cooled down, and there has been a rotation market among different currencies.

When asked about the biggest challenge in life, Musk thought about it and replied that it was how to use time effectively and always maintain a corrective feedback loop.
This also applies to quantitative trend-following strategies.
The reason for choosing to invest in the crypto market was its high volatility and all-weather trading characteristics, which allowed us to use time efficiently and quickly obtain and correct incorrect feedback. As the market continues to evolve and change cyclically, maintaining an effective corrective feedback loop is the key to refining excellent strategies. If you only set the goal to make money, you may be caught off guard when you encounter extremely unfavorable market conditions. Therefore, paying attention to the feedback loop not only helps the strategy to iterate and optimize, but also makes it easier to cope with market changes.
In the trend-following quantitative system, the corrective feedback loop is a continuous optimization process designed to adjust according to market changes and strategy performance:
1. Data collection and analysis: obtain market data, analyze trends and strategy performance.
2. Signal generation: Generate buy and sell signals using algorithms.
3. Strategy execution: Execute transactions to ensure compliance with risk management goals.
4. Performance evaluation: Regularly evaluate strategy effects and analyze returns and risks.
5. Feedback analysis: Identify factors that affect performance.
6. Strategy optimization: Adjust strategy based on feedback.
7. Loop iteration: Apply optimized strategy and continue monitoring.
This loop helps the system continuously improve strategy profitability and risk control capabilities in a dynamic market.

The US election and the Federal Reserve's interest rate meeting triggered market sentiment fluctuations, causing historical volatility to rise sharply, while implied volatility rebounded after an initial rise. This wave of market is mainly BTC and MEME. After the sentiment subsides, the market volatility is still large, and it is not suitable to enter the market with a heavy position at this time. Investors are advised to keep their greed, avoid wasting time, and wait for the next opportunity. The price has rebounded from a high level, and most of the positions of the single-order strategy have been closed.

Crypto Quant Channel Brother: Through the trend tracking quantitative system, it helps 500 investors capture market volatility opportunities in the long term.

When the market is good, making money is a natural result, and when the market is not good, it is a good opportunity to enhance understanding. This includes strengthening the strategy's risk control capabilities and gaining a deep understanding of market dynamics. Only through continuous attribution iteration and strategy optimization can we truly achieve the mission of helping investors profit in the long term. When the focus is on creating value for investors, what you start to accumulate is wealth that cannot be easily replaced. This wealth is not only reflected in financial returns but also in the enhancement of professional skills and market insight.

The significant rise in Bitcoin has brought substantial benefits to both followers and leaders, mainly reflected in the following aspects:
1. Expansion of market capitalization and enhanced liquidity: The rise in Bitcoin prices drives the expansion of market capitalization, enhancing market liquidity, which increases the capacity of strategies, making it easier for more people to effectively track.
2. Strategy screening and evaluation: Extreme volatility provides a testing ground for strategies, helping to identify and eliminate strategies that exhibit weakness during critical periods, screening quantitative leaders.
3. Increase in trading opportunities: The increase in volatility brings more trading opportunities in the upcoming cycles, allowing for the selection of excellent quantitative investment strategies to better achieve capital appreciation.
By focusing on these aspects, both followers and leaders can better select and allocate quantitative investment strategies, achieving more robust growth.

In the past week, the prices of mainstream cryptocurrencies have risen significantly and continuously. Trump has been elected, the Federal Reserve continues to cut interest rates, and market bullish sentiment is high. Trend-following strategies have reaped substantial rewards this week, and short-term strategies have already taken profits. Long-term strategies continue to hold some bullish positions.

Pay attention to the CPI on Wednesday, November 13, and the PPI on Thursday, November 14. The United States has entered daylight saving time, with the announcement at 21:30 Hong Kong time!

Harris's victory depends on swing states, Trump has many low-probability ways to turn blue to red, Musk posts dozens of X tweets a day, it's a bit exciting, go Trump

If you want to understand trend following, the most effective way is neither to learn the rules of the strategy nor to study behavioral economics theory, but to review every detail in investment practice. - From Trend Following

Focus on the details of how to reduce losses, and let the strategy run free when there are profit opportunities!

In the past week, mainstream cryptocurrency prices have declined from recent highs, with long positions taking profits and then retracing. As the U.S. elections on November 5th and the Federal Reserve's interest rate decision on November 8th approach, market uncertainty is increasing, and open interest remains high. Implied volatility is starting to rise, so we will reduce positions for now and wait for new events.

There was a significant difference between last night's non-farm payrolls data and the forecast value. The actual value was only 1.20,000 people. This may trigger market expectations for Fed policy adjustments, especially the possibility of interest rate cuts. This difference in data could be interpreted as the economy needs more support, prompting the Fed to adopt more aggressive monetary policy.

In the crypto market, we have observed price trends rising and then falling following the release of data. This volatility may reflect the market's initial reaction to the data and subsequent rational pullback. In the current environment of high uncertainty, especially before the results of the U.S. election on November 5 are known, it is wise to adopt a cautious trading strategy.

Although Trump's chances of winning are significantly ahead emotionally, this is more a reflection of the psychology of market participants rather than objective reality. Many participants in the Polymarket are crypto advocates from around the world who are concerned about Trump but have no actual voting influence. Early voting data indicates that in the key swing state of Pennsylvania, Harris has a significant lead, making it difficult for Trump to turn the tide.
Upcoming Major Events
• November 1, 20:30 (Hong Kong Time): Release of US Non-Farm Payroll Data
• November 5: US Presidential Election
• November 8, 02:00 (Hong Kong Time): Federal Reserve Interest Rate Decision
In light of the upcoming major events, maintaining a non-predictive principle and focusing on trend following is key. For major events, it is recommended to appropriately reduce positions with a short-term strategy, prioritizing risk control to avoid exposure to risks caused by emotional fluctuations.
Although I also hope Trump wins, I only trade based on trends.