Announcement: New Improvements to the Model!
Bear Markets or shall we say Pre-Bull Markets (iykyk) is a good time to learn & build.
But before we get to what's changing it's important to get some context on what worked and what areas needed enhancements.
So what's worked? These will continue to be the Focus.
W3Q was started with a core philosophy
Build a product you would personally use. Sell the way you Buy.
FOCUS on Big Moves
W3Q is suited for someone who needs an unbiased EDGE but does not have the time nor wishes to trade 24/7. It's designed for positional trade and captures the bulk of the trending move.
After more than a decade of trading/investing something I have observed over and over again.
Buy & Hold > HTF Trading > LTF Trading.
B&H works only if you choose the right assets otherwise, it's a recipe for disaster. Risk-adjusted returns are also very poor.
For example, B&H Ethereum classic vs. Ethereum would have resulted in a very different outcome.
The next best thing is HTF Trades. W3Q will continue to focus on that.
NO Bias
If you notice majority of Twitter "traders" only post bullish stuff. Never bearish (apart from perpetual doom-porn lovers).
Why? Coz Bear posting is bad for influencer business. They tend to lose followers/engagement.
Engagement, deal flows, and preferential allotments in projects are the main sources of profitability, not actual trading for many of them.
W3Q has and will be focused on being objective and without any bullish or bearish bias. When the data changes so does the position and opinion.
Will continue to call it as I see it.
NO Noise
Speak only when the words outperform silence - Taleb
Quality over quantity. That's why you don't see 100's of tweets littering the timeline or posts hitting your inboxes. That also leads to alpha getting lost in the process as users get desensitized.
Even the weekly posts are kept under 4 min read with just actionable insights.
I value your time and attention.
Transparency & Consistency
All posts (not just selected winning ones) are made public after a few days so everyone can see what is sent to subscribers and when.
Rain or shine you get the model's position every week.
You are not getting hedged "opinions" or If it crosses this level then it can touch that level kinda cryptic analysis, which doesn't add any value.
Communication
It's important to set the right expectations. Hence all FAQs are published citing what to and NOT to expect.
All insights are data-driven from the model. There is no subjective analysis.
Everything is and will be written in ELI5 format.
It's easy to sound smart with the fancy Quant mumbo jumbo such as Cointegration, Lagged Variables Regularization etc, etc. but the idea always is to keep it simple, provide value, and abstract the complexity.
Ultimately You're either long, short, or in cash. Everything else is noise.
What were the current limitations that led to needing refinements?
Perception of LAG
Models are designed to tolerate volatility, humans are not.
Any crypto being a hyper-volatile 24/7 trading asset, one needs to have monk-like emotional control to trade them.
The current model is based on a weekly timeframe. While it's great for eliminating noise and capturing the meat of the move, it feels too slow.
As a consequence, many subscribers try to preempt it by exiting midweek only to see the positions go up again by the end of the week and they are unable to re-enter.
Also as a creator, communicating LTF vs HTF calls is hard. Regardless of how many FAQs or guidelines you issue.
Lastly, systems are designed and are useful when you follow them in their entirety (unless you have your own LTF system and you use HTF as confluence).
So when one is selectively picking signals and doesn't capture the full move of a successful call, they don't get the full benefit either.
TOO MANY COINS
Currently, the maximum number of open positions is capped at 30.
The reason for this was that many don't have access to All Altcoins and Exchanges. Some cannot participate in smaller Alts due to their portfolio size and liquidity constraints.
But for those who do not have constraints, it felt too much.
There's always FOMO among subscribers as they feel, 30 is too many longs to focus on when the markets get heated. It inhibits them from optimal allocation.
They end up picking only a few coins to go long among the list and end up missing winners at times.
What are the changes?
There are 2 parts to both the Crypto and TradFi model.
WHAT to Buy/Sell and WHEN to BUY/SELL.
Both have been refreshed.
- WHEN
A more responsive HTF Model based on the Daily time frame.
Anyone who developed/traded a trend momentum model would know generating signals is the easy part (even a simple EMA crossover could do that). But they are not profitable due to false alarms, whipsaws, and lags.
The hard part is generating cleaner fewer signals
If you try to make the signal too clean then you introduce a significant lag,
bunch of the move is over by the time the signal is generated.
Also, you can't just switch time-frames from weekly to daily of the same model without significant rework, backtesting, and forward testing.
All of those have been done extensively just like it was done for the previous model before launching.
As a subscriber, nothing changes for you except you will receive more frequent updates.
Now you won't have to wait till the weekend to go long or exit.
NOTE: Daily time frame does NOT mean Daily updates. It means there will be more frequent updates throughout the week as needed.
If there are no changes to model positions then you will receive a weekly update as usual summarizing the insights. - WHAT
The newer version will focus on 20 coins at a maximum. Ranging from majors with liquidity to explosive moving Alts.
This should help in optimal allocation and focus.
Lastly, Many of you have been asking for LTF signals. I will be tweeting them periodically on Twitter. Follow @Web3Quant and Turn on the notifications.
This is NOT part of the paid subscription. If you are interested in HTF positional trades then just follow the newsletter updates.
#LTFplays are based on very low time frames and are only suited for nimble positioning and quick entry/exits. If the trade doesn't play out then one needs to be able to cut it out. If that's not you then do not get into #LTFplays.
Also, there won't be any hand-holding. Just use it as an idea reference.
I'll be using #LTFplay as a hashtag just so there's no confusion.
#LTFplays would mostly be on BTC/ETH and some high-volume coins and Stocks etc. And NOT all Model picks. This will ensure they don't dilute the value for the paid subscribers.
If you have any questions, Twitter DMs are open. I will update the FAQs within a couple of days based on the questions received.
See you in the next post!
-W3Q