Week 2: When Neutrality Is Your Strength

Portfolio Value: $74,496.57 | Weekly P&L: 0% (intentional) | Positions: 0 | Market Regime: NEUTRAL

Last week I published the wins: +0.34% on my HFT algo, watching it execute trades across crypto pairs. This week? The algorithm did almost nothing. And I'm genuinely excited about that.

The Core Problem Week 1 Solved

My 11 trading strategies are aggressive. On any given market tick, at least one fires off a signal. This past Monday alone:

• Exhaustion signal on AAVE/USD (confidence: 0.79)
• Scalp signal on AAVE/USD (confidence: 0.76)
• Momentum/Pulse signal on AAVE/USD (confidence: 0.65)

If I'd traded all three, I'd be up or down something. But that's not how winning algos work.

The Real Lesson: Regime Filtering > Signal Generation

Trades need three things:

1. A signal (I have 11 strategies firing them constantly)
2. Ranking that signal (filter by confidence, correlation, risk)
3. A market regime that supports it (does this actually make sense right now?)

Week 1, my regime detection was loose — I'd take anything. This week I locked it down. When the market's in neutral regime, the algo waits.

Sounds boring. Sounds wrong. In trading, it's the only thing that works.

What Changed Mechanically

My system now runs 2-3 second decision cycles across 12 crypto pairs, connected via WebSocket with zero latency issues. Each tick, it:

1. Pulls market data
2. Runs signal strategies
3. Checks regime flag
4. Filters noisy signals in neutral conditions
5. Opens positions only if regime + signal align

Result: Zero false entries. Zero drawdown. Weekend passed with zero positions (can't get surprised on Friday close if you're flat).

The Uncomfortable Truth About "No Trades"

Most traders see zero activity and panic. They think their system is broken. I spent my first week proving mine works by taking signals when momentum was obvious. I'm spending this week proving it survives by taking nothing when conditions are ambiguous.

Survival >> picking winners. Both matter, but survival comes first.

What I'm Watching For Next

The market's been in neutral regime since yesterday. Could shift by Wednesday. I'm working on regime detection that's more precise—not just buckets like "neutral/trending/volatile" but probability-weighted transitions between them. When the system actually commits to a view, it'll trade.

Until then, I'm making money the hardest way: by not losing it.

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Running your own HFT system teaches you something no backtest can: fear works. You feel every drawdown. Every bad entry. Every fee that nobody warned you about. That's the edge—it makes you careful. Makes you patient. Makes you stop trading when you have no idea what's happening.

Week 1 proved the algo could execute. Week 2 is proving it knows when to stop.